Statement made on 26 February 2009 by Senator Joseph Day
Hon. Joseph A. Day:
Honourable senators, the report we are dealing with is the second report of the Standing Senate Committee on National Finance. All senators have been provided with a copy of Supplementary Estimates (B) for 2008-09. Your committee has studied these supplementary estimates and now reports to the chamber. The report has been circulated, and I will be referring to certain portions of it. I will not, of course, go through the entire report, but I do recommend that you read it at your leisure.
Honourable senators, one item I wish to turn your attention to is at page 4 of the French version of the report.
On page 4 of the French version of the report, there are three paragraphs at the bottom of the page, beginning with ''nouvelles prévisions de Finances relatives''. The way the amount is indicated is unclear. On the second line, it says, ''1 255,9 millions de dollars''. Writing it as ''1 milliard 225,9'' would be better, so that should be changed.
The same goes for the last line, where the amount should be written as ''2,174 milliards de dollars'' instead of ''2 174 millions''. We discussed this change yesterday evening with the other committee members, but unfortunately, the change was not made.
Honourable senators, with that slight change I will briefly outline what is in this report so that you have an understanding of what your committee did in studying the matter.
The first point that I wanted to make relates to the purpose for supplementary estimates, which is outlined in precise wording here. However, in general terms, supplementary estimates are used after the time when the Main Estimates come forward for a year, which begins in April, although the Main Estimates will typically come out in March, or maybe even today for the Main Estimates for next year. The Main Estimates for the fiscal year that is ending in March came out in March of 2008. A number of items were not fully developed by the government at that time, including a number of budget items that were not reflected in the Main Estimates.
Supplementary estimates are brought forward in the course of the fiscal cycle. They represent a request by the government to Parliament to allow the government to spend additional funds related to the amount that was predicted at the beginning, but funds that were not specifically enough developed at the time that the Main Estimates were issued.
We saw Main Estimates in April, May, June of last year. The first supplementary estimate was Supplementary Estimates (A), which reflected much of the budget for February and March of 2008.
This is the second of three supplementary estimates during this fiscal year. These Supplementary Estimates (B) began to be developed last summer but were delayed due to the election. They were actually made available to Parliament in November 2008, but Parliament then prorogued. They were reintroduced in the same fashion, unchanged, on January 29, 2009.
Another supplementary estimate will finish out the year, and that is Supplementary Estimates (C).
Honourable senators, none of these supplementary estimates deal with the items that are probably in your minds at this time, namely the stimulus package and the most recent budget by the Minister of Finance. We will be getting to those, but this is, in effect, catch-up. I want honourable senators to understand that these supplementary estimates deal with items related to the last budget, not the current budget.
Now that the items have been developed fully, the government is asking for permission to spend an additional $2.8 billion, in rounded numbers. They are voted appropriations. There is also some comment on funds that have been saved, almost half a billion dollars, and I will mention those because it is important to understand where those funds originated.
That is the document with which we are dealing, honourable senators. If you are following the report that we filed, to give some perspective, the total estimate was $227 billion. Supplementary Estimates (A) was $4.1 billion, and this Supplementary Estimates (B) is $2.8 billion. That puts into perspective the small percentage Supplementary Estimates (B) represent of the overall annual budget for those items that I have indicated.
It would be helpful for honourable senators to know what is included in this $2.8 billion, beginning with $331 million in funding for National Defence for our military mission in Afghanistan.
Next is $326 million in funding for the Office of Infrastructure Canada for the Provincial-Territorial Infrastructure Base Funding Program to provide long-term, predictable and flexible funding to provinces and territories. The amounts had not been developed earlier, partly because many of the funding agreements had not been completed between the federal government and the provinces when the Main Estimates came out.
Next is $170 million in funding for the Treasury Board Secretariat in respect of compensation for salary adjustments.
There is funding for the operation of the Canadian Air Transport Security Authority, which is an ongoing authority. I suspect that they needed another $156 million because, as this chamber will be aware, we expanded their role to do work for passengers at not only the front end but also in relation to the back end at airports. We asked CATSA to come before us on short notice. They were not able to have anybody come and explain this funding, but the good thing about the Senate is we do not forget such things. We will be after them again to appear before our committee to provide the precise reason. It is best not to speculate when we are talking about $156 million.
Next is an increase in pay and allowances for the Armed Forces in the amount of $90 million.
We are all interested in ensuring that the Royal Canadian Mounted Police are properly funded. The RCMP have multi-year real property projects, namely, the acquisition and replacement of air, land and marine assets. That funding is in the amount of $73.4 million.
With respect to funding to Foreign Affairs, it is in regard to the ongoing programs where Canada helps other nations to destroy stockpiles of chemical weapons. Many of the smaller nations, of which I believe Vietnam is one, will enter into an agreement to destroy some of that stockpile of weapons, some of which are close to being weapons of mass destruction, if we help them with the cost.
Funding for Public Works and Government Services is for increased costs of property, which is not difficult to follow.
Next is funding for the Indian Residential Schools Truth and Reconciliation Commission Secretariat in the amount of $58 million, but the money is not for a settlement with respect to individuals who were violated; rather, the $58 million is to establish and maintain the secretariat. It would be helpful for our committee to bring in the representative of the secretariat and find out how they plan to spend $58 million, and we will do that on your behalf in the future.
We again have funding for the Office of Infrastructure Canada, and it is a transfer out. Infrastructure Canada is housed in Transport Canada. They run most of their infrastructure programs through that department and sub-department, but they also provide border infrastructure funding to reduce border congestion. That money has been transferred to the Canada Border Services Agency. Therefore, a significant amount of funds were transferred.
Honourable senators, I have not touched on all of the items included in the Supplementary Estimates (B), that make up the $2.8 billion the government is requesting. Most seem reasonable under the circumstances.
Regarding statutory budget spending, it is the vote that I just talked about. We have to vote either today or later on these items. Until both houses give approval through a vote, there is no authority for the executive branch to spend the money, unless the executive branch has been given authority through a statute. Sometimes statutes have a Royal Recommendation, and it provides for funding for a particular initiative. They are the statutory aspects. The government has the authority to spend that money through a statute as opposed to through the estimate process. It works out to roughly a 50-50 split between statutory authority and voted authority through the estimate process and appropriation bills. Some years, it is 60-40, but it is roughly half and half.
We do, however, ask for and receive information in our supplementary estimates for information purposes only. It is important for us to understand the overall government purse and where the money comes from.
There is a significant saving in the supplementary estimates. This is not an annual occurrence; it is just for this particular period. Regarding the revised forecast from the Department of Finance for transfer payments to provincial and territorial governments. Transfer payments are made in the areas of health and social services and equalization payments. There is a saving of $1.2 billion.
The Hon. the Speaker: I am sorry to interrupt, but the honourable senator's 15 minutes have elapsed.
Senator Day: I would request an additional five minutes, Your Honour.
The Hon. the Speaker: Is it agreed?
Hon. Senators: Agreed.
Senator Day: Thank you. I promise not to speak much on the bill that comes later, if honourable senators would let me explain a little, but I could hold some of the information for Bill C-12, which perhaps is a way of balancing my remarks.
Honourable senators, provinces were anticipating $1.2 billion more than they will be getting this year. This is money that has never gone out from the federal government. It is important for us to pursue this issue.
There is also a saving in relation to the Softwood Lumber Products Export Charge Act, which is the money that was going to communities that were hard done by in the softwood lumber dispute with the United States. Half a billion dollars was not disbursed to the communities.
Finally, there is the revised forecast from the Department of Finance with respect to public debt charges. That is the amount of money we owe as public debt. Given reduced interest rates and our ability, until this year, to reduce our accumulated debt significantly over the years, there is a saving of $2.1 billion in debt charges that we did not have to pay. Honourable senators can put that into perspective when they think in terms of the increase in debt that the stimulus package will create. One of the long-term effects of that will be an increase in debt service charges. Right now, part of the saving is as a result of low interest rates, but if interest rates were to ever increase significantly, they would create an extremely heavy burden by taking away money that could be used for other purposes.
Honourable senators, I also want to speak about Treasury Board vote 5. It is a matter of ongoing work of our committee that was raised in the hearings we held and by the activity that took place with respect to this. I will speak about that later when we deal with the bill that goes along with this.
Honourable senators will know that this report forms the support for the supply bill, or the appropriations bill, in this instance Bill C-12, that we will be asked to deal with. We will not send Bill C-12 to committee in the normal course here because we have already studied it.
The bill has two schedules attached to it. Those schedules are in the Supplementary Estimates (B), and they have been studied.
Honourable senators, I thank all members of the committee for their hard work. We recognize that an important aspect of the machinery and business of government is to have supply.