OTTAWA — The federal government held on to more than $10 billion it was expected to spend in 2012-13, with almost half coming from two departments, according to recently-published financial documents.
These were funds Parliament approved and Canadians were told they could expect through a slew of programs in dozens of departments, including the Senate Ethics Officer, disability and death compensation at Veterans Affairs, and weather and environmental services for Canadians at Environment Canada.
The total amount lapsed is almost $560 million more than Ottawa left on the table the year before, although it is down from a recent peak of $11.2 billion in 2010-11, according to annual Public Accounts of Canada financial statements.
When departments don’t spend all their money, Ottawa lets them keep some, allowing them another shot at funding the programs they were expected to.
The rest is dumped into the government’s general bank account, where it can contribute to paying down the deficit.
Read more: Goods stolen from Canadian federal government included weapons: public accounts
The Opposition says the constant under-spending signals the government is not being forthcoming when it comes to finances.
“They are not being transparent with Canadians,” New Democrat finance critic Peggy Nash said in an interview.
“They are not being transparent with Canadians,” – Peggy Nash
The government often announces new programs to great fanfare, but has never made a habit of telling Canadians when departments don’t deliver on the promised funding.
At a time when federal departments and agencies are already grappling with budget cuts, it can become difficult to keep track, Nash said.
“You have a tough time getting a clear picture of exactly how the government is spending money … Significant amounts—in some cases, 10 or 15 per cent of budgets—are not being spent. So these are cuts on top of the announced cuts the government has already made,” she said.
Transport and Defence
Just under half of the federal government’s 2012-13 overall lapsed budget came from two departments: Transport Canada, which stalled in getting more than $2.5 billion out the door, and National Defence, which is sitting on almost $1.5 billion.
Both departments constantly have trouble spending what’s approved and expected. In 2010-11, those departments were responsible for more than half of the government’s overall lapse—a combined $6.3 billion out of an overall $11 billion lapse federally.
The following year, Defence and Transport together sat on close to $4 billion, while the government overall lapsed $9.6 billion.
National Defence did not respond to request for comment sent Tuesday.
A 2011 internal report from retired Lt-Gen. Andrew Leslie was critical of under-spending at the department.
Leslie wrote that managerial incoherence, aversion to taking risks and a confusing interdepartmental process all contributed to “a disturbing and increasing trend” of hundreds of millions of dollars being approved, but not spent.
Read more: Ottawa expects $3.7-billion surplus in 2015
The 2012-13 lapse at Defence decreased minimally from the year before—to $1.45 billion from $1.52 billion—but has ballooned since 2008-09, when the department left only $672 million on the table.
According to the Public Accounts published earlier this month, Defence spent less than what Parliament approved on an abundance of programs, including: environmental protection and stewardship, maritime readiness, land readiness, aerospace readiness, recruiting of personnel and initial training, and complaints resolution at the Military Police Complaints Commission.
At Transport, it is Infrastructure Canada that has the most trouble spending its budget. In 2012-13, that department was responsible for almost $1.6 billion of Transport’s overall $2.5 billion lapse, according to the Public Accounts.
Officials at Infrastructure Canada have said one reason spending gets backlogged is because Ottawa usually refunds costs only after provinces have incurred them. Sometimes, provinces don’t claim the expenses before the end of the fiscal year as anticipated.
“Forecasting expenses for large and complex infrastructure projects is challenging,” department spokeswoman Jen Powroz wrote in an email. “These projects can take years to plan and complete and frequent delays are common, especially given the shorter construction season in Canada.”
Within Infrastructure Canada, a large chunk of the lapse in 2012-13 came from the Building Canada Fund, an $8.8-billion project announced in 2007. The project was set up to support national, regional and municipal projects related to public transit, green energy and drinking water, among other priorities.
Last year, the two components of the funds—the “major infrastructure” and “community” components—were together slated to spend more than $2.2 billion. Only $1.1 billion made it out the door.
Powroz said the stalling on that program is due to projects that have not yet begun to incur costs, or that have incurred lower costs than anticipated. The department intends to ask for the funding to be rolled over to other years in order to cover future costs of the projects, she said.
The spokeswoman did not directly answer why spending forecasts don’t reflect the fact that the department doesn’t spend what’s approved.
Comments