Honourable senators, I want to thank Senator LaBoucane-Benson very much for her remarks. I could follow along with the dollar amounts, so thanks very much for your comments.

Bill C-60 is the fourth appropriation bill for this year. It is requesting an additional $20.7 billion and, when approved, will increase funding — through appropriation bills this year — to $239 billion.

Before I continue, and for the benefit of our new senators, the appropriation bill — Bill C-60 — is supported by the Supplementary Estimates (B) document, and I think that confuses people a lot of times. Additional detailed information on Bill C-60 may be found in Supplementary Estimates (B).

The $239 billion, along with the statutory spending of $240 billion, accounts for $479 billion in spending so far this year.

Appropriation bills do not include all of the government’s spending. Other legislation also gives authority to the government to spend money. Spending approved by other legislation includes Old Age Security payments, which are authorized by the Old Age Security Act; Canada health payments, which are authorized by the Federal-Provincial Fiscal Arrangements Act; and interest on unmatured debt, which is authorized by the Financial Administration Act.

The amount of spending authorized by legislation other than appropriation bills is called statutory spending. Almost half of all spending is statutory. For example, 48% of spending in 2020-21 was statutory, while it was 45% in 2021-22 and 46% in 2022-23.

It’s of benefit to the government to include as much spending as possible in other legislation — as statutory spending — rather than including it in appropriation bills. Spending included in appropriation bills is studied by parliamentary committees on an ongoing basis, while statutory spending does not receive the same level of scrutiny.

Of the $20 billion being requested in this bill, the Department of Crown-Indigenous Relations and Northern Affairs is requesting the largest amount, which is $9 billion. The Treasury Board Secretariat is requesting $2.5 billion, which is the second‑highest request, while the Department of National Defence is third with their request of $1.4 billion.

Altogether, these three organizations are requesting $13 billion of the $20 billion, which is almost two thirds of the funding request.

This bill also includes $2.8 billion for 74 Budget 2023 initiatives. Along with the Budget 2023 initiatives that were included in Supplementary Estimates (A), the government will have $10 billion to implement its Budget 2023 initiatives. However, analysis carried out by the Parliamentary Budget Officer indicates that this is only 60% of the Budget 2023 initiatives, and about $6 billion has yet to be funded this year as planned. If these initiatives do not go ahead this year, the deficit should be reduced by that $6 billion.

Last year at this time, 90% of the Budget 2022 initiatives had been funded, which raises the question as to why the government is so slow in requesting the money for the Budget 2023 initiatives. Last March, Budget 2023 forecasted a deficit of $40.1 billion, while the fiscal update — released last week — is forecasting a deficit of $40 billion. It’s $40.1 billion compared to $40 billion. In other words, the forecasted deficit is unchanged.

By slowing down the implementation of budget initiatives, the government can control the bottom line — that is, its deficit — so that it hits its deficit right on the nose.

Of course, there are other reasons for the delay in requesting funding for the Budget 2023 initiatives, and we will receive an update on unfunded initiatives when Supplementary Estimates (C) is tabled in February or March.

One initiative in Budget 2023 is spending reductions of $14 billion over five years. This includes targeted reductions of $500 million in consulting, professional services and travel this year, along with reductions of $1.65 billion in each of the following four years for a total of $7 billion.

The government has published online the frozen allotments of $500 million for this fiscal year by organization.

Minister Anand, in her recent press conference on Supplementary Estimates (B), told us that $350 million of this $500 million will reduce professional services, while the remaining $150 million will reduce travel. So, my following comments relate to the reduction of $350 million this year only in professional services because detailed data is not available for travel.

A comparison of last year’s Supplementary Estimates (B) and this year’s Supplementary Estimates (B) indicates that the budget for professional services has actually increased from $20.5 billion last year to $21.6 billion this year, an increase of more than $1 billion. The $350-million reduction, which Minister Anand spoke about in professional services, is being imposed on the increased funding of $1 billion. The budget for professional services is not being reduced. Rather, it is being increased by over $700 million. And this is before the next appropriation bill, which will provide even more money for professional services.

The Parliamentary Budget Officer, or PBO, testifying at our National Finance Committee, said that it is very surprising to see the budget for professional services increase significantly when the government has clearly stated its intention to reduce the use of professional and special services.

For this year, the Department of National Defence has been allocated the highest reduction in professional services in the amount of $211 million. The second-highest reduction of $34.5 million has been allocated to the Department of Public Works and Government Services.

The Department of Crown-Indigenous Relations is requesting $9 billion of the $20 billion in this bill, primarily for specific claims, settlements and litigation. Many of the discussions at our Finance Committee meetings centred around this funding request. Of the $9 billion, $5 billion is for the Restoule settlement agreement. The governments of Canada and Ontario have reached an agreement in principle with 21 First Nations related to past annual payments under the 1850 Robinson-Huron Treaty.

The treaty includes a clause indicating that annuities would be increased as long as the wealth generated from the territories could support such an increase. Since there has been no increase in the payments since 1875, in 2018 the Ontario Superior Court ruled that the Crown had a duty to increase annual payments to treaty beneficiaries. Once the agreement is finalized, the $5 billion will be paid into a trust established by the First Nations.

Another $1.6 billion of the $9 billion requested by the department is for the settlement of land-related claims and litigation, and this money will be used to fund negotiated settlements should agreements be reached. And $651 million of the $9 billion being requested is for the Federal Indian Day Schools settlement. It includes compensation for persons who attended a federally established, funded, controlled and operated Indian day school from January 1, 1920, until its closure or transfer from Canada’s control.

Several issues were discussed during our committee meetings relating to these claims. The Parliamentary Budget Officer, during testimony, said that it is a bit concerning that specific claims and liabilities have increased so much. He said that it raises the question as to how firmly in control the government is with respect to these claims if we keep discovering new claims, which are supposed to be based on historical facts. He went on to say it is a bit disconcerting to see these liabilities increasing so much when we’ve had so much time to figure them out.

Of particular concern to me is the way in which these claims are disclosed in the accounts of the government. While $5 billion is identified in Supplementary Estimates (B) this year as funding for the Restoule settlement agreement, it is not possible to identify where it is recorded in the public accounts and in which year. This is a serious problem because $5 billion is a significant amount, and we should know in which year it is being recorded as an expenditure in the Public Accounts of Canada.

Last year, $2.8 billion was approved by the Federal Court of Canada for the Gottfriedson Band class settlement agreement. The funding for this $2.8 billion was included in the second appropriation bill for 2023-24, and the expenditure was actually recorded the previous year in the 2022-23 public accounts.

It is a large transaction, with funding provided in one year and the expenditure recorded in the public accounts the previous year. While it was possible to extract information on the $2.8‑billion Gottfriedson Band class settlement agreement to determine when the money was provided, which is this year, and when the expenditure was recorded, which was last year, this is not always the case.

Last year’s public accounts, which were released in October, indicate that $26 billion related to Indigenous claims were recorded last year. The specific claims and related dollar amounts are not disclosed, and officials, during testimony, committed to providing details on the $26 billion to our Finance Committee.

It is important to recognize that the deficit for last year was $35 billion, and if this $26 billion had not been recorded, the deficit would have been reduced by $26 billion to $9 billion. So, we could have had a $9-billion deficit. This is clearly pointed out on page 12 of volume 1 of last year’s public accounts. But it’s increasingly difficult for parliamentarians and especially for members of the Finance Committee to track claims and settlement agreements. During committee meetings earlier this year, officials from the Department of Crown-Indigenous Relations told us that there were about 500 of these claims, so parliamentary oversight is difficult, if not impossible.

The government has disclosed more precise numbers. There are 83 comprehensive land claims under negotiation, accepted for negotiation or under review. In addition, there are also 698 specific claims under negotiation, accepted for negotiation or under review. And these are in addition to general litigation claims and special claims.

Estimates for the Department of Crown-Indigenous Relations have seen a significant increase over the past four years. Estimates for the past four years commencing in 2021 amounted to $6.8 billion. It went to $7 billion in 2021-22, $13.7 billion last year, and $26 billion so far this year. Parliamentary oversight is imperative.

Of the $2.5 billion requested by the Treasury Board Secretariat, $2 billion is to compensate departments and agencies for the costs of collective bargaining agreements and other related adjustments to the terms and conditions of employment. These costs arise from agreements concluded from April to June of this year, increases for unrepresented employees and adjustments related to some previously signed agreements. Compare these amounts for Supplementary Estimates (B), requesting $4.2 billion, to last year, when the request was $2.3 billion. It’s quite a significant increase. That will increase personnel costs so far this year to $58.2 billion.

Updated information on personnel costs for this year will be available when Supplementary Estimates (C) are released in February or March of next year.

The Department of National Defence is requesting $1.375 billion, which is the third-highest amount requested after Crown‑Indigenous Relations and the Treasury Board Secretariat.

Of the $1.375 billion, $583 million is for compensation and benefits for the Canadian Armed Forces; $500 million is for military aid to Ukraine; $118 million is for the expanded contributions to NATO; and $50 million is for Operation UNIFIER, which is Canada’s support for Ukraine.

There’s $4 million being transferred from the capital account of the Department of National Defence to other departments. While the $4-million transfer is explained, there is no information provided on the remaining capital budget of $6 billion, including which capital projects are being funded by the $6 billion. This has been an ongoing problem.

The 2017 defence policy did indicate capital funding by year, but not the capital projects that were to be funded. In any event, the limited information provided in the 2017 defence policy is now outdated and has been for some time. In fact, the Parliamentary Budget Officer released a report last year on the $164 billion earmarked for capital projects in the 2017 defence policy over a 20-year time period for 348 capital projects. That report indicated that the government underspent in the first four years of the defence policy and has significantly shifted expenditures to future fiscal years beginning in 2025 through to 2037. For example, the initial 2017 estimate for capital spending in that department for 2027-28 was $12.6 billion, but according to revised projections, it is now $16.3 billion, indicating a shifting forward of $3.7 billion.

The Parliamentary Budget Officer’s report from last year indicated that planned spending under the 2017 defence policy would be $11 billion during this year. It remains at $11 billion under the updated 2022 profile. However, according to Supplementary Estimates (B), funding for capital expenditures for this year is only $6 billion, not $11 billion, an underfunding of $5 billion.

We do not know what projects are included in the list of the 348 projects, nor do we know which projects are included in the estimated $11 billion in the defence policy for this year, nor do we know the projects included in the $6 billion indicated in Supplementary Estimates (B). Given the lack of information on National Defence funding requirements, it is obvious there is a lack of transparency in the information provided by the Department of National Defence.

The Department of Finance is requesting $3.4 million, of which $2.8 million is for a Budget 2022 initiative entitled “The financial sector legislative review.” This review is to focus on the digitalization of money and the stability and security of the financial sector, with the first phase of the review to be directed at digital currencies, including crypto-currencies and stablecoins.

Budget 2022 indicated the cost would be $17.7 million starting last year. There’s no explanation why commencement of the project was delayed until this year.

Supplementary Estimates (B) also discloses statutory payments of $2 billion to provinces and territories in accordance with the Federal-Provincial Fiscal Arrangements Act. The $2 billion is included in Budget 2023 and was further announced in June. The $2 billion is to address urgent pressures in emergency rooms, operating rooms and pediatric hospitals.

While the $2 billion in funding is disclosed in supplementary estimates for this year, it is recorded in the government’s accounts for last year, that is, the 2022-23 public accounts. It’s just another transaction which demonstrates that the estimates documents do not align with the public accounts, thus confusing readers.

Public debt servicing costs continue to be a concern, but these are statutory payments, so government already has the authority under the Financial Administration Act to make these payments. Updates are provided in supplementary estimates documents for information purposes only. There is no updated information in Supplementary Estimates (B) on public debt servicing costs. However, the Fall Economic Statement indicates that debt servicing costs continue to increase significantly, from $35 billion last year to an estimated $46.5 billion this year. Next year, we will see another significant increase from the $46.5 billion to $52.4 billion, with continuing increases over the next several years to $60.7 billion in 2028-29.

I will have additional comments on these debt servicing costs when we resume sitting in the new year.

Honourable senators, as I indicated in my opening remarks, this bill is the fourth appropriation bill for this year. We expect a fifth appropriation bill in February or March of next year.

Accordingly, this bill summarizes government’s request for money so far this year. Additional money will be requested again in the next appropriation bill.

This concludes my comments on the government’s fourth appropriation bill. In closing, I extend my appreciation to our Finance Committee chair, Senator Mockler, our deputy chair, Senator Forest, as well as all my committee colleagues for their insightful questions and discussions during our meetings. I also extend my appreciation to our staff who ensure our meetings are productive and run smoothing.

Thank you, colleagues.