Hon. Marc Gold (Government Representative in the Senate): Thank you for the question. It’s important to note the significant challenges and the issues involved in the decisions to renew the agreement with the U.S. We need to ensure that this can be applied to the entire border, and not just official border crossings.

Canada has definitely done its part, as it always has, by welcoming those seeking asylum through official channels. As you know, Quebec alone has accepted more than 40,000 migrants who tried their luck and managed to get to Canada by irregular means.

We have a 9,000-kilometre border, more or less, and we have to admit that it would be impossible for officers to monitor it. We do not have the resources and neither does the United States. The government is aware of the existing issues and knows that would be even more difficult come winter. The government is working with the provinces and our American counterparts to ensure that we can manage the situation in a compassionate and responsible manner.

What the government wants from this agreement is to enable those wishing to come to Canada to do so through recognized and official channels, because that is how they can access services we can manage and monitor. They have the right to remain in Canada by making an application. Otherwise, they must return to the United States, as required by the rules.

Senator Miville-Dechêne: Precisely, for this return to the United States, the Americans are grappling with an even bigger wave of migrants than we are. Some of the asylum seekers trying to enter Canada have already been turned back to the United States since Sunday.

Senator Gold, does the government know how the U.S. authorities are going to deal with these people and what will happen to them in this country that is already overflowing with migrants?

Hon. Chantal Petitclerc: My question is for the Government Representative in the Senate.

Senator Gold, my question is once again on forced adoptions. I hope this is the last time I will have to ask this question.

Senator Gold, you have surely heard that last week, Scotland officially apologized to thousands of its citizens whose babies were taken from them and put up for forced adoption between 1950 and 1970.

We know, and it has been often said, that official apologies cannot fix the mistakes of the past, but everyone agrees that they are the first steps in a healing process for the women struggling with lifelong trauma.

Last week, I was talking to one of these victims, and she said the following:

[English]

“Tell them to hurry up. I’m not getting any younger.”

[Translation]

I have asked this question many times and I will not stop asking it. Like these women, I will never accept the response that adoption is a provincial jurisdiction, when the report of the Standing Senate Committee on Social Affairs, Science and Technology was very clear in 2018 and outlined the responsibility of the federal government.

Will Canada finally follow the example of other Commonwealth countries such as Australia and Ireland, and now Scotland, and officially apologize to the more than 300,000 Canadian women and their children for the way they were treated for years and years?

Hon. Marc Gold (Government Representative in the Senate): Thank you for the question, senator, and thank you for reminding us of the situation. As you said so well, unfortunately we cannot change the past.

I will take this message and the request of those who experienced this tragedy and contact the government. I will do everything I can to get a response.

[English]

Hon. Marc Gold (Government Representative in the Senate): Thank you for your question.

Tragically, and regrettably, Canada has seen an alarming increase in hate crimes and other examples of Islamophobia. In this country, it is the position of the government, which it has stated publicly, that Islamophobia is real and is a troubling fact that needs to be addressed.

To address it, the government has taken very concrete actions. They include the hosting of a National Summit on Islamophobia, the appointment of Canada’s first ever Special Representative on Combatting Islamophobia, officially recognizing January 29 as a National Day of Remembrance of the Québec City Mosque Attack and Action against Islamophobia and, in concrete terms, investing $5.6 million over five years with $1.2 million ongoing to support the new Special Representative on Combatting Islamophobia.

The government will continue to support organizations and community organizations that work in this area, and we’ll work closely with the many Muslim communities in the country to end — as is our hope — Islamophobia in this country.

[Translation]

Hon. Raymonde Gagné (Legislative Deputy to the Government Representative in the Senate) moved third reading of Bill C-43, An Act for granting to His Majesty certain sums of money for the federal public administration for the fiscal year ending March 31, 2023.

She said: Honourable senators, I rise today to speak to the appropriation bill for the 2022-23 Supplementary Estimates (C). The government is seeking Parliament’s approval of the planned voted spending detailed in the Supplementary Estimates (C) through this appropriation bill. As you know, colleagues, appropriation bills are the mechanisms for Parliament to authorize payments from the Consolidated Revenue Fund to provide government programs and services.

It is our responsibility as parliamentarians to authorize government spending through the estimates and associated appropriation bills. Indeed, this is one of the most important responsibilities we have in this chamber. The Main Estimates and Supplementary Estimates, together with the public accounts, Departmental Plans and Departmental Results Reports, play an important role and provide information that helps parliamentarians and Canadians scrutinize government spending.

Colleagues, this scrutiny is essential to a well-functioning democracy. Canadians expect their government to be transparent and have a right to know how their tax dollars are being spent. Not only do the estimates provide the taxpayers of this country with a detailed and transparent breakdown of where their money is going, but they also provide an opportunity to hold the government to account.

[English]

With that said, colleagues, let me now turn to these Supplementary Estimates (C). These estimates provide information on incremental spending requirements that were either not sufficiently developed in time to include in the Main Estimates or have been refined to account for recent developments.

This year’s Supplementary Estimates (C) present a total of $10.3 billion across 58 organizations, of which $4.7 billion is to be voted on. If approved, honourable senators, voted budgetary spending for this fiscal year would increase by 2.1% to a total of $224.6 billion. These estimates also show, for information purposes, changes in planned statutory expenditures. Those expenditures are forecast to rise $5.6 billion to a total of $218.7 billion. This increase is attributed to a $6.6-billion increase in interest on unmatured debt due to higher short-term interest rates and the impact of higher inflation on real return bonds; a $1.1‑billion increase to Old Age Security payments based on updated forecasts of the average monthly rate, number of beneficiaries and benefit repayment amounts; and a $1.1-billion increase for the one-time rental housing benefit and the administration and enforcement of the Rental Housing Benefit Act.

Honourable colleagues, these estimates also include $381.7 million in funding announced in Budget 2022, including $49.2 million for the implementation of the regional educational agreement with the First Nations Education Council in Quebec; $45.5 million for Canada’s military mission in Ukraine; and $24.4 million for the Supporting Black Canadian Communities Initiative. This brings the total of Budget 2022 funding in the 2023-24 estimates to $10.9 billion.

[Translation]

With these estimates, the government continues to invest in areas that are important to Canadians. Allow me to explain some of the key items in more detail.

Let me start with the government’s support for Indigenous peoples and their communities. I would like to remind the chamber that this government is deeply committed to a renewed nation-to-nation relationship with Indigenous peoples, a relationship that is based on recognition of rights, respect, truth, cooperation and partnership. Indigenous peoples have the right to self-determination and self-government and rightfully aspire to restoring strong and healthy communities.

The government has made historic investments to support Indigenous priorities. As part of Canada’s journey towards reconciliation, the government continues to invest in Indigenous peoples and their communities. In these supplementary estimates, the Department of Indigenous Services is requesting an additional $764.1 million in funding, and the Department of Crown-Indigenous Relations and Northern Affairs is requesting $100.7 million in funding.

The proposed funding would be allocated to essential programs and supports. It will be used to reimburse Indigenous communities for expenditures incurred on reserves in emergencies, including natural disasters. It will provide First Nations children with social services and supports in health and education. It will support efforts to increase food security in remote communities in the north. It will help support adult education.

Honourable senators, I believe that you will agree that all these programs and services are essential. These investments will help support infrastructure and services that are critically important to the physical, mental, social and economic health and well-being of Indigenous communities.

[English]

Honourable colleagues, we also know that many Canadians are struggling to find affordable housing. That is why the government has committed to taking concrete action to ensure that Canadians have safe and affordable places to live and raise a family. In addition to the planned statutory expenditures of $1.1 billion to provide an estimated 1.8 million low-income families and individuals with a one-time $500 rental housing benefit, the Supplementary Estimates (C) also include an additional $9.3 million to help owners of rental properties make their buildings more energy efficient.

Honourable senators, I would be remiss if I didn’t mention the Tax-Free First Home Savings Account, which will give prospective buyers the ability to save up to $40,000 tax free toward their first home. Just like an RRSP, contributions will be tax deductible and withdrawals to purchase a first home, including investment income, will be non-taxable like a tax-free savings account. And, colleagues, to provide Canadians with greater transparency and fairness in the home-buying process, the government is working with provinces and territories to develop a home buyers’ bill of rights.

The government is also committed to providing more supports for families. Many Canadians have family members in their household who are elderly or disabled, but many homes aren’t properly equipped to meet the needs of these individuals.

In response, the government has introduced a tax credit to cover some of the costs when renovations are needed to meet the needs of elderly or disabled family members. Canadians will be able to apply for a tax credit to cover some of those costs beginning this year. Because, at the end of the day, colleagues, every Canadian deserves a safe, accessible and affordable place to live and raise their family.

[Translation]

Finally, colleagues, I would like to provide a breakdown of how these supplementary estimates will strengthen Canada’s support to Ukraine.

Canada is home to 1.3 million Canadians of Ukrainian origin. Canada and Ukraine have been steadfast allies for decades.

In fact, Canada was the first western country to recognize Ukraine’s independence over 30 years ago. Since then, our two countries have enjoyed a close relationship, which has only been strengthened by Russia’s illegal invasion.

Honourable senators, let me be very clear. Canada remains committed to supporting Ukraine. We continue to provide the military training and equipment that Ukraine needs to defend its sovereignty, freedom and independence.

That is why the government has committed more than $1 billion in military aid to Ukraine since February 2022.

In accordance with the Prime Minister’s announcement last November, the supplementary estimates therefore allocate $500 million to the Department of National Defence to assist the Armed Forces of Ukraine.

There are also plans to allocate $115 million in grant assistance that will allow the Department of Finance to contribute to the World Bank’s multi-donor trust fund for Ukraine.

These funds will help the government of Ukraine maintain its administrative and service delivery capacity, conduct relief operations, and establish and implement a reconstruction and reform program.

The Department of National Defence is also asking for $56.5 million for Operation UNIFIER, the Canadian Armed Forces’ training and capacity building mission in support of the Armed Forces of Ukraine.

Since the start of Operation UNIFIER in 2015, the CAF has trained over 35,000 Ukrainian military and security personnel in battlefield tactics and advanced military skills.

[English]

The government is also committed to those who have been forced to flee their homeland to escape Russian aggression. In response, the government has introduced special programs to help thousands of Ukrainian nationals and their family members find safety in Canada. Supplementary Estimates (C) include $170 million for Immigration, Refugees and Citizenship Canada to provide transitional financial assistance to help these families take care of their basic needs while they get settled in Canada. Through the Canada-Ukraine Authorization for Emergency Travel, Ukrainian nationals and their family members can apply for a temporary resident visa to travel to and stay in Canada temporarily — and, colleagues, Canadians can be rightly proud of the fact that over half a million temporary Ukrainian resident applications have been approved.

[Translation]

In addition, as I mentioned yesterday in my speech at second reading, the voted expenditures will make it possible to inject $370 million to help developing countries address the impact of climate change, $227.5 million to write off unrecoverable student and apprenticeship loans, and $213.8 million to preserve current capacity and service levels at the Canada Revenue Agency call centres.

[English]

Honourable senators, the proposed funding in these estimates is a tangible example of the government’s commitments to priorities at home and abroad, from investing in Indigenous communities to providing military assistance to Ukraine and providing affordable housing.

The estimates family of documents provides important insight into how public funds will be used to advance priorities for Canadians. The estimates show that the government is responding to immediate needs while continuing to make long‑term investments that benefit everyone.

I urge all honourable senators to pass this bill without delay so we can continue to deliver results for Canadians and for the future of this country. Thank you. Meegwetch.

Hon. Elizabeth Marshall: Honourable senators, I would like to thank Senator Gagné for her remarks. Some of mine will be repetitive, but not all of them.

This bill that we are looking at today, Bill C-43, is requesting an additional $4.7 billion for this fiscal year, which ends this Friday, March 31. This will increase estimated spending to $472 billion for this fiscal year, which is $50 billion higher than the $422 billion outlined in Supplementary Estimates (C) last year.

The Senate Finance Committee has studied the government’s request for the $4.7 billion as detailed in the document Supplementary Estimates (C). One meeting was held on March 8, during which three departments appeared: National Defence, Global Affairs Canada and Indigenous Services Canada.

However, I would like to point out that not all of the government’s total spending is studied by the Senate Finance Committee. Of the $472 billion in spending this year, the Senate Finance Committee has studied $225 billion, which is less than half. The remaining amounts include, among other programs, Employment Insurance benefits, the Canada Child Benefit and statutory expenditures which have already been approved by existing legislation other than an appropriation bill. These statutory payments include Old Age Security, which is approved by the Old Age Security Act; interest on debt, which is approved by the Financial Administration Act; the Canada Health Transfer, which is approved by the Federal-Provincial Fiscal Arrangements Act; and payments approved by the Farm Income Protection Act.

Since these “statutory” and other expenses are significant, I cannot impress upon my colleagues the need to review all government spending, not just half of it.

One of the problems in reviewing the Main Estimates and supplementary estimates is the challenge of aligning them with the government’s budget and the government’s fall fiscal update. Parliamentarians, and indeed all Canadians, must find it very confusing to follow the government’s spending plan throughout the year because it keeps changing. Actually, the spending increases with some of the documents that are tabled subsequent to the Main Estimates. First, we get the Main Estimates, followed by the budget and Supplementary Estimates (A) and (B). Then we get the fall fiscal update that’s followed by Supplementary Estimates (C), which we’re studying here today.

The Senate Finance Committee is presently studying the government’s spending plan in the Main Estimates for the 2023-24 fiscal year, which were tabled in February. However, this spending plan is already outdated because Budget 2023 was tabled yesterday, and it outlines additional spending not included in the Main Estimates.

Of the departments requesting additional funding in Bill C-43, the Department of National Defence is requesting the highest amount. My comments are directed primarily to this department.

The Department of National Defence is requesting $898 million, which is 20% of the $8.7 billion being requested in this bill. The $898 million includes an additional $500 million for military aid to Ukraine — specifically, a loan — as well as $56 million for Operation UNIFIER, which is Canada’s military mission in Ukraine. The $56 million was included in last year’s budget. There is also $170 million being requested by Immigration, Refugees and Citizenship Canada for Ukrainian immigration. And $115 million is requested by the Department of Finance for payments to the World Bank relating to the Ukraine multi-donor trust fund. And $18 million is being requested by the Department of Foreign Affairs, Trade and Development for the provision of non-lethal military equipment to Ukraine. Canada’s support to Ukraine as of March 15, 2023, is $5.4 billion.

This bill will increase funding to the Department of National Defence for this fiscal year to $28 billion. The bill is not requesting any additional funding for capital projects, so capital funding for this year remains at $5.9 billion.

When the government announced its defence policy in 2017, it estimated that total defence spending over the next 20 years would be $553 billion, of which $164 billion was earmarked for capital projects. Actual spending on capital projects during the first five years — up to 2022 — has been significantly less than the commitment in the defence policy and, as a result, the department’s spending profile for capital projects shows a significant increase in spending in future years. In other words, capital spending which did not occur over the past six years, according to the 2017 defence policy, has now been pushed forward to future years.

The updated profile shows greater capital spending beginning in 2025-26. Given that the department has been unable to deliver on capital projects in the past, it will be challenged to deliver on the more ambitious future capital plan.

Honourable senators may recall that I asked Senator Gold last week what changes the government has made to successfully implement Canada’s defence policy and, specifically, their capital plan.

In addition to budgetary allocations being less than the 2017 defence policy, actual spending has also been less than the amount budgeted. In last year’s budget, the government made a commitment to update its 2017 defence policy, including its investment plan for capital projects. That was one year ago, and we are still waiting.

Given that the Department of National Defence has already published its departmental plan for the new fiscal year, the Main Estimates for next year are being studied by the Senate Finance Committee, and a new budget was released yesterday, the new defence policy, when it is released, should be aligned with these financial documents.

The war in Ukraine, as well as Canada’s changing relationship with China and Russia, has led to a shifting in priorities. Priority capital projects in 2017 are not the same as projects which would be considered priorities now, and cost estimates have most certainly increased.

Officials testifying at our Finance Committee assured us that the new defence policy and investment plan will be released “pretty soon.” However, given recent announcements of increased funding for the Department of National Defence, such as the recent commitment to purchase 88 F-35 fighter jets, it is important to realize there are significant expenditures not identified in the government’s fiscal framework, and therefore we do not know the impact on the deficit. When I say it’s not identified, it may be there, but I haven’t been able to find it. I do want to point out that there is funding in the government’s fiscal framework in the amount of billions of dollars that just shows up as a line item, and there is no description what the money will be used for. That was the problem when we reviewed the fiscal update in December.

Now, Canada has been part of the North Atlantic Treaty Organization, or NATO, as we call it, since 1949. Its objective is to guarantee the freedom and security of its members through political and military means. In 2006, NATO members agreed with the goal of setting their annual defence spending to at least 2% of GDP. Since making this commitment, Canada has never achieved the goal.

While this bill will increase funding to the Department of National Defence to over $18 billion this year, the additional monies, along with other expenses which NATO allows, such as veterans’ benefits, will not reach the 2% NATO target.

During President Biden’s visit to Canada last week, several issues related to the Department of National Defence were discussed, including the modernization of NORAD, the purchase of the F-35 aircraft and a possible military intervention in Haiti. We do not know the details surrounding these initiatives, but they will have a significant impact on the department and the additional funding that would be required to support these initiatives.

There has been much discussion around the amount of money being spent on professional and special services. In 2017-18, the government spent $13 billion on professional and special services, and this bill will increase the budget significantly from that $13 billion in 2017-18 to $21.4 billion this year.

In this bill, the government is requesting an additional $817 million for professional and special services, which will increase the annual budget for the program to the $21.4 billion. Of the $817 million being requested for professional and special services, $373 million is being requested by the Department of National Defence. This will increase that department’s budget for professional and special services to $4.9 billion of the $21.4 billion budgeted for this year for all organizations. So the Department of National Defence has the biggest budget for professional and special services for the year, and they are also asking for the most in the Supplementary Estimates (C) document.

Revenues estimated to be collected by the government this year are not sufficient to pay for the expenditures outlined in this bill, along with other expenditures approved in this fiscal year. As a result, the government borrows the shortfall. The government has a legislated debt ceiling, which is $1.831 trillion. The government cannot exceed this ceiling except in very exceptional circumstances, as permitted by legislation.

The debt ceiling applies to two components of debt: the debt of Crown corporations and the debt of government. Crown corporation debt increased from $253 billion in 2015 to $305 billion in 2022, and these numbers are taken from the audited public accounts. However, the government’s borrowings have doubled since 2015. In 2015, government debt was $650 billion, which has now increased to $1,233 billion as of March 31, 2022. Yesterday’s budget is forecasting additional new borrowings of $63 billion in the new fiscal year.

A comparison of government revenues and expenditures in 2019-20, the last year before the pandemic, to the estimated revenues and expenditures in 2022-23 indicates the following: Revenues are expected to increase 31%, from $334 billion to $437 billion, with corporate taxes experiencing the biggest increase. Program expenses are expected to increase 30%, from $363 billion to $470 billion. So the numbers are only going one way: up. They are getting bigger. Public debt charges are expected to increase 42% — that’s using the 2019-20 as a base — from $24.4 billion to $34.5 billion. And yesterday’s budget is forecasting public debt charges next year to be $43.9 billion. So our public debt interest program is now one of the government’s largest programs.

A recent study by the Fraser Institute indicates that in 2020, at the height of COVID-19, federal government spending reached just over $19,000 per person. That $19,000 per person represents the highest per-person spending level, adjusted for inflation, in Canadian history, but we have to remember the COVID expenditures are in there. If you take out the COVID expenditures, the non-COVID-related spending per person was $12,752 in 2020, and it still represents the highest level of per‑person spending in Canadian history.

The analysis for 2021, the following year, shows that federal per-person spending was $13,576, which is the second-highest per-person spending level in Canadian history, adjusted for inflation, but we have to remember that also includes COVID expenditures.

If we excluded the COVID-related spending in 2021, per‑person spending was still $11,750, which is the second-highest level of per-person spending in Canadian history. In other words, the highest level of federal per-person spending occurred in 2020 and 2021, and it was not the COVID-related spending that caused it.

We still have to do the calculations on the 2022 per-person spending levels. I don’t know what that will show, but I am sure I will be reporting that later.

I want to go back to interest costs. Two years ago, government estimated that interest costs for this year would be $22.4 billion. Yesterday’s budget indicates that it’s actually going to be $34.5 billion, which is a 54% increase over the estimate of two years ago. Public debt charges as a share of total government expenses has now increased from 3.2% in 2020-21 to 4.9% in 2021-22. This year, according to yesterday’s budget, public debt charges are expected to be 7.3% of total government expenses. Next year, it’s expected to be 9% of total government expenses. Again, the numbers are going one way: They’re getting bigger.

While government debt has increased significantly in recent years, there is an opportunity to decrease borrowing via the enforcement of tax policy and the repayment of amounts owed to the government. Last December, Auditor General Karen Hogan released a report on the COVID-19 emergency programs. She indicated that expenditures totalling $210 billion were paid for six COVID-19 programs. Her audit took into consideration the issuance of payments based on personal attestation, with the intent of reviewing eligibility after payments were issued and recovering the amounts paid to ineligible recipients.

Given the limited prepayment controls and the decision to focus on post-payment verifications, the Auditor General expected the department and the agency to carry out extensive post-payment verifications to identify payments made to ineligible recipients. However, the Auditor General reported that the Canada Revenue Agency and Employment and Social Development Canada did not develop rigorous and comprehensive plans to verify the eligibility of recipients. The audit identified $4.6 billion in overpayments to ineligible recipients, but it also identified just over $27 billion that was paid to recipients who have an indicator of ineligibility and should be investigated further. Of this $27 billion, $12 billion are related to individual benefit programs while $15 billion are related to the wage subsidy program.

The Canada Revenue Agency has pushed back on the Auditor General’s conclusions about the $27 billion. During hearings by the House of Commons Public Accounts Committee, a Canada Revenue Agency document provided additional information on pandemic benefits. The Canada Revenue Agency reviewed just over $5 billion in benefits and determined that over $3 billion were deemed ineligible, which means about 65% of those benefits were deemed ineligible.

The Canada Revenue Agency has a responsibility to investigate the $27 billion identified by the Auditor General and determine whether the recipients were entitled to the benefits. If so, it has a responsibility to collect the amounts owing from ineligible recipients.

In other cases, significant amounts of tax revenues are not being collected. Last month, Statistics Canada released its annual estimate of the underground economy in Canada in 2021. It estimated that the gross domestic product at market prices for underground economic activity in Canada in 2021 was $68 billion. Even if we assume a tax rate of 30%, the federal, provincial and territorial governments are losing about $23 billion in tax revenues.

Last year, the Canada Revenue Agency estimated that the federal tax gap was $40 billion. If the Canada Revenue Agency could collect even a portion of that tax gap, it would significantly reduce government’s deficit.

It’s not fair to the taxpayers who comply with the tax system while others can evade paying taxes.

At this point, I want to acknowledge that Senator Downe just tabled a bill relating to the Canada Revenue Agency. It’s going to require the Canada Revenue Agency to list all convictions for tax evasion, including international tax evasion, and also sets out that the Minister of National Revenue has to include statistics on the tax gap once every three years in the annual report. The enactment specifies that the minister is to provide data on the tax gap to the Parliamentary Budget Officer.

I must say, I will support that bill. That is an excellent idea.

While the government has approved billions of dollars in additional funding for the Canada Revenue Agency, there is little progress in collecting taxes from tax evaders. Instead, the perception left is that the Canada Revenue Agency is simply increasing its audits of honest taxpayers.

A poll from Leger, commissioned by the Fraser Institute in early 2023, surveyed 1,554 Canadians about their opinions on the tax burden imposed on families. I found this very interesting. Here are some of the findings: 74% of those surveyed said that the average family is being overtaxed by all three levels of government — federal, provincial and municipal; and 80% of those surveyed support the average family paying 40% or less of their income in total taxes to all levels of government. That is interesting because the average Canadian family paid 45.2% of its income to the three levels of government in 2022. You can compare this to 1981, the earliest year tracked in the study, when that number was 40.8% of its income.

So 44% of the people who participated in the survey — or almost half — feel they receive poor or very poor value from their governments in health care, education, police, roads and national defence. I’m sure many of us have spoken to Canadians who have expressed those points of view.

Supplementary Estimates (C), which supports Bill C-43, discloses budgetary expenditures of $1.1 billion for the one-time rental housing benefit authorized by the Rental Housing Benefit Act, which was approved by Parliament last November. This benefit was intended to assist renters who met certain criteria. Vacancy rates in Canada dropped to their lowest level since 2001. According to the Canada Mortgage and Housing Corporation, rents in purpose-built rental buildings rose by an average of 5.6%, which includes renters who stayed in the same apartment. However, the price of rent for new tenants increased 18.2%, and in Toronto, the increase was 29%.

Renters are not the only ones being challenged to pay for the cost of shelter. This is an issue I’ve brought up several times. Mortgage holders are also feeling the impacts of inflation and higher interest rates. Last month, the Canadian Imperial Bank of Commerce disclosed that 20% of their $263 billion residential loan portfolio, or $52 billion of mortgages, were in a position where the borrower’s monthly payment was not enough to cover the interest portion of their mortgage. In some cases, banks allow the borrower to add the unpaid interest to the principal of the loan balance, and the amortization period is often extended.

I read somewhere recently that another 20% of mortgage holders will renew their mortgages this year. I must say it’s really a concern and vulnerability for the Canadian economy.

You may recall that both the Minister of Finance and the Governor of the Bank of Canada assured homeowners that interest rates would remain low well into the future. As more and more borrowers renew their mortgages at higher interest rates, we can expect a higher number of borrowers being unable to pay the interest on their mortgages.

My final comments are on the Early Learning and Child Care Plan because this program interests me very much. I do support an early learning and child care plan, but not necessarily this one.

Two years ago, in its 2021 budget, the government announced a Canada-wide early learning and child care plan at an estimated cost of $30 billion. It committed to three objectives, which are actually outlined in the minister’s mandate letter.

The first is a 50% reduction in average fees by the end of 2022. The government has said it has already met that commitment. Then there is an average of $10-a-day child care by 2025-26 for all regulated child care spaces. The third objective is ongoing annual growth in spaces: Agreements with the provinces and territories have committed to 250,000 new child care spaces and 40,000 new early childhood educators by the end of 2025-26.

The Early Learning and Child Care Plan is being implemented jointly by the federal, provincial and territorial governments, and agreements have been reached with all 13 provinces and territories. The government has put those agreements on its website.

The federal government has already announced that the child care fees across Canada for regulated spaces have, on average, been reduced by 50%. However, many provinces are reporting a shortage of child care spaces and long waiting lists. For example, in Prince Edward Island, an estimated 2,000 families are waiting for a child care space.

In my home province of Newfoundland and Labrador, media reports refer to the shortage of child care spaces as a “crisis.” In Newfoundland, CBC carried an article over a few days about the shortage of child care spaces and interviewed some parents. It was very interesting. They spoke to one parent who didn’t have a child care space. She was a doctor, and there is a shortage of doctors in Newfoundland and Labrador. If you read what’s in the media, there are 140,000 Newfoundlanders — there are only 500,000 of us in total — who have no family doctor. Here was a doctor who wanted to return to work but couldn’t because she couldn’t get a child care space for her child.

In Saskatchewan, $10-a-day child care is appreciated by those who have a space, but the wait-lists for child care spaces are long, and the issue needs to be addressed.

In Ontario, reports are that thousands more child care educators are needed.

Other provinces across Canada are experiencing the same problem. Even in talking to parents in Alberta, B.C. and Ontario, there is a serious shortage of child care spaces.

The objective of the child care plan was to reduce the cost of child care and improve the accessibility of spaces so parents could participate in the workforce. However, many parents are unable to return to or join the workforce because child care spaces are just not available. This was the overarching objective of the $30‑billion program, and without access to child care, parents cannot fully participate in the economy.

The 2021 announcement of the $30-billion Early Learning and Child Care Plan was announced and received with much optimism and enthusiasm. However, in its second year, it is encountering serious problems in the availability of spaces and child care professionals.

The federal government must meet with its provincial and territorial partners to resolve these problems. If these problems are not resolved, the entire $30-billion child care program is in jeopardy.

That concludes my comments. I would like to close by saying thank you to my colleagues on the National Finance Committee for your great questions; to Senator Mockler, our chair; Senator Forest, our vice-chair, and all the staff who worked so hard to make our meetings successful. Thank you.

Senator Marshall: My first response is I wish I knew as much as everyone thinks I know, but by all means, I have offered. I have actually met with one of my colleagues who is still sitting in the Senate — not from our side, from the other side — to explain the process. Of course, I’m always available to tell what I know, but I can tell you, Senator Lankin, I don’t know everything. It’s a multitude of financial documents, and you’re just going from document to document. If anybody is interested, I am definitely available.

Senator Marshall: The government cherry-picks the statistics that make them look better. But you have to look at other statistics too, and what concerns me is the amount of money that is going into debt repayment. It’s now one of our biggest spending programs, and the debt is growing at an alarming rate. This is the reason I’ve decided that I’m not going to support any more spending bills by the government because, in my opinion, they have lost control. Everything is on this very upward trend — quite a steep trend.

They cherry-pick certain things that they rely on, but you have to remember that the debt of the government has doubled since this government came to power. Up to a couple of years ago, they were borrowing and saying that interest is low and they can’t afford not to borrow. That’s what they said. However, it’s a risk. Now interest rates have gone up, and now interest is 10% of government expenditures. It’s a big program. There is no curtailing of the expenditures. They just keep spending, and the debt keeps increasing.

I looked at the budget yesterday. We’re going to borrow another $63 billion this year, interest is going to go up further, and there seems to be no initiative to look at the revenue side — other than to increase taxes. Taxes on corporations have gone up quite a bit, but personal income tax has also gone up. For people who owe the government money — there are those offshore accounts that Senator Downe is always talking about. There’s the tax gap — the underground economy. It seems like there is no initiative on the government’s part to get in there and do something. The Canada Revenue Agency is leaving the impression that they are doing nothing or next to nothing, even though they received billions of dollars since 2015 to improve the collection of taxes.

I’m very concerned because the debt is just being added to. There is no debt being paid down. Most people in this chamber are older. This is what we’re going to leave our children. We’re going to leave our children all that debt. We look at the Canada child benefit — which is a great program — and the child care program, but the money is going to help those children now, and they are going to be the ones who will have to pay it back and also pay the debt servicing cost.

Government likes to cherry-pick what shows them in a favourable light, but I think, as legislators, we have to look at the whole package.

I will leave it at that.

Senator D. Patterson: I was also shocked but not surprised at the information you gave — the shocking information that 65% of COVID payments, if I understood you correctly, were deemed ineligible. I remember talking in this chamber about how every person in the men’s shelter in my community was able to get the Canada Emergency Response Benefit, or CERB, payments without having to prove the $5,000 income that was required by the program. Many folks in jail got CERB payments as well. So I’m not surprised by the information you have given us.

You hear from ministers and officials. I’m wondering if you think there have been lessons learned about this approach of having testimonial applications for government programs. Is there any sign that this practice will be corrected in the future?

Senator Marshall: I doubt it. I say that because we just approved the dental benefits for the children. Really, that’s just issuing paycheques. There doesn’t have to be any proof that the child actually receives dental services. I don’t know what the details will be on other programs, but I feel that this is the way the government is going — mail out the cheques and rely on the post-verification.

About the example you cited and that I gave, I was just trying to demonstrate something about the Canada Revenue Agency and Employment and Social Development Canada. The Auditor General identified $27 billion in payments, and there was some sign there that the recipients should not have received the money. So the Auditor General felt that the department and the Canada Revenue Agency should do some additional work. They’ve been pushing back. I was just trying to show that of $5 billion, $3 billion wasn’t eligible. That’s a sure sign they should look at the $27 billion.

That issue was addressed by the Public Accounts Committee over in the House of Commons, and they have not released their report yet on that topic. I expect they will shortly. I’m expecting that they will recommend that the Canada Revenue Agency and the department pursue it, but I don’t know. I’m waiting to see what they say.

Hon. Clément Gignac: I will try to be quick.

First, I just want to thank you for the time you gave to me when I arrived at the Senate to explain how this procedure and this system works.

Even I used net public debt-to-GDP to mention that this is the lowest in the G7. But they have other approaches in terms of debt. The other one, which is the gross public debt, is a pretty different story when compared to the Organisation for Economic Co-operation and Development, or OECD.

I am curious to see if you have any opinion on that. The net debt is the lowest, but it is much higher than in 2015. It is now 43% rather than 31%, and is declining slower than my expectation. I’m curious: Is gross debt the best indicator? Or is it the net debt?

Hon. Raymonde Gagné (Legislative Deputy to the Government Representative in the Senate) moved third reading of Bill C-44, An Act for granting to His Majesty certain sums of money for the federal public administration for the fiscal year ending March 31, 2024.

She said: Honourable senators, I rise today to speak to Appropriation Bill No. 1 for 2023-24, the interim supply bill for the 2023-24 Main Estimates.

With this appropriation bill, the government is asking Parliament to approve an advance on the funds requested in the Main Estimates to cover the needs of the public service from the start of the new fiscal year to the date on which the appropriation act based on the Main Estimates for 2023-24 is passed. This advance is known as the “interim supply.”

Therefore, it is up to us, parliamentarians, to authorize payments from the Consolidated Revenue Fund through the Main Estimates and the associated appropriation bills. This is actually one of our most important responsibilities in this chamber.

The Main Estimates and supplementary estimates, together with the public accounts, Departmental Plans and Departmental Results Reports, play an important role and provide information that helps parliamentarians and Canadians scrutinize government spending.

This scrutiny is fundamental to a healthy democracy. Canadians expect their government to be transparent, and they have a right to know how public money is being spent.

Not only do the estimates provide Canadian taxpayers with a detailed and transparent breakdown of where their money is going, but they also provide an opportunity to hold the government to account.

Honourable senators, allow me to spend a little time on the process of interim supply.

To spend money, the government must request Parliament’s authorization through the supply bill review and approval process.

Interim supply provides the government with access to the funding required until the full amount of funding provided in the Main Estimates is approved later in the year.

Given that the fiscal year begins on April 1 and that the normal supply cycle requires the House to vote on the Main Estimates only in June, Parliament approves interim supply before the start of the fiscal year.

We should note that the Standing Orders provide that the House of Commons has until the month of June to study and approve the Main Estimates. However, federal organizations need funding from the start of the fiscal year, or April 1. Because of this gap, the government has to table an interim supply bill in March.

[English]

A bill for interim supply, like the one before us today, provides funding for operations for the first three months of the fiscal year. A full supply bill for the balance of voted expenditures set out in the Main Estimates is introduced in June. But it is important to be clear, colleagues, that the interim supply bill does not, in fact, propose new spending. That’s because the expenditures found in the bill are already included in the Main Estimates.

For most departmental votes, it represents three twelfths of the total voted authorities set out in the Main Estimates for the fiscal year, but in some cases a department may ask for more than the standard three twelfths. However, in order to receive more than the standard amount, the department must provide justification to the Treasury Board of Canada Secretariat for additional twelfths to be included in the interim supply bill for parliamentary approval. Once the justification is reviewed and accepted, additional twelfths are included in the interim supply bill for parliamentary approval.

So when exactly would a department require more funding? It could be for projects launched in the spring, such as Canada Summer Jobs, or to make payments to provinces and territories for programs like Home and Community Care, mental health and addiction services and virtual care and long-term care. Or it could be for legal obligations to Indigenous communities, such as the Indian Day Schools (McLean) agreement or self-government agreements. Also, for example on Vote 10, it could be for additional supply for payments of military aid to Ukraine.

These are just some examples, colleagues, but they demonstrate the critical role interim supply plays in providing services to Canadians.

[Translation]

Dear colleagues, this year, the process is following the normal supply cycle. The President of the Treasury Board tabled the main estimates in the House of Commons on February 15, 2023 and the interim supply bill, Bill C-44, was tabled in that same chamber on March 22.

[English]

Through this interim supply bill, appropriation act no. 1, the government is seeking Parliament’s approval of $89.7 billion to ensure that funding continues to be secure for the programs that are important to Canadians.

Just as a reminder, the Main Estimates for 2023-24 provide information on $432.9 billion in proposed spending for 129 organizations, including $198.2 billion in voted expenditures and $234.8 billion in statutory expenditures.

Honourable senators, these estimates address issues that are important to Canadians. Not only do they provide important insight into how public funds will be used, but they also show that the government is responding to immediate needs while continuing to make long-term investments that benefit all Canadians. I urge all senators to pass the bill without delay. Thank you, meegwetch.

Hon. Elizabeth Marshall: Honourable senators, my remarks will also be brief. I rise to speak to Bill C-44, the first appropriation bill for the new fiscal year, which begins on April 1.

The government’s fiscal year runs from April 1 to March 31, so the old year ends at midnight on Friday, March 31. If we don’t approve this bill, the government will not have the money it needs to continue operating the following day, on April 1.

This bill will approve some funding for the new fiscal year — just under $90 billion. It is called the interim supply bill. The Main Estimates have yet to be approved by the House of Commons and the Senate, so the government needs money to continue operating until the Main Estimates are approved. The $89 billion in this bill represents what we call an advance on the money requested in Main Estimates. That will be achieved by Bill C-44, which details the sums of money that the government requires to operate until June 30, when they expect the Main Estimates will be approved.

If you look at the bill itself, it’s quite lengthy. You’ll see that the funding is requested in twelfths of the amount requested in the Main Estimates because there are 12 months in the year. There are schedules in the bill, and it starts off by saying that all departments and organizations are requesting three months of funding, or three twelfths, which will bring them to the end of June.

Then there are exceptions: Certain votes are requesting four twelfths, some are requesting five twelfths and so on up to twelve twelfths. On average, in this bill, the government is requesting just over 45%. Last year, the government requested just around 40%, and in the year previous to that, they requested 42% of the Main Estimates. So the government is a little on the high side but in the ballpark.

Our Senate Finance Committee does not study the interim estimates, but the Main Estimates upon which interim estimates are based are currently being studied in committee.

As I indicated in my previous speech, it’s important to realize that the funding being approved in appropriation bills, including this bill, is actually less than half of the money being spent by government. Government also has approval in many pieces of government legislation to spend money. As I have said earlier, those other bills include the Financial Administration Act, the social security act, the budget implementation acts and so on.

This bill is requesting just over $89 billion of the $198 billion outlined in the Main Estimates for 2023-24. That concludes my comments.

The Hon. the Speaker: Honourable senators, when shall this bill be read the second time?

(On motion of Senator Loffreda, bill placed on the Orders of the Day for second reading two days hence.)