Feds failed to spend record $38 billion in 'promised' programs, services last fiscal year

The Canadian Press / Sean Kilpatrick

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Federal departments are lambasting the Trudeau Liberals over its failure to spend tens of billions on promised programs and services. They had a record $38 billion in funding lapse in 2021/22 for new military equipment and support for veterans.

The unspent funds represent a smaller-than-expected deficit in the year ending March 31, 2022. Canada rang up a $90.2 billion deficit — $23.6 billion less than had been projected in the budget.

According to a report on federal revenues and spending by every department and agency, the $38.2 billion reported as lapsed in the last fiscal year marks a new record over the previous year of $32.2 billion.

Health Canada and the Public Health Agency of Canada reported the largest lapse, with nearly $11.2 billion of their combined $28.2 billion budgets going unspent.

Health Canada spokeswoman Tammy Jarbeau claimed much of their funding had been set aside for COVID initiatives the feds did not end up needing, including vaccines, personal protective equipment, and rapid tests.

"Both Health Canada and the Public Health Agency of Canada have rigorous internal financial management controls designed to prevent, detect and minimize errors and financial losses, and ensure the funding is spent in the best interests of Canadians," she wrote in an email.

However, Canada's auditor general uncovered that an estimated $1 billion in COVID vaccines would expire by the end of December 2022 owing to distribution and tracking issues caused by government negligence. 

Since December 2020, Ottawa has purchased approximately 169 million doses for nearly $5 billion.

With Canadians receiving 84.1 million doses since the vaccine became available for distribution, Auditor General Karen Hogan said that as of May 2022, 32.5 million doses remain unused, and another 13.6 million doses have already expired.

But Jarbeau figures the delays caused by the government response to the COVID pandemic are to blame.

Additionally, the Defence Department reported a lapse of $2.5 billion last fiscal year. They didn't spend much money due to delays in delivering new military equipment, such as Arctic patrol vessels and upgrades to armoured vehicles.

Defence Department spokeswoman Jessica Lamirande attributes significant delays on military infrastructure projects, including upgrading and rebuilding two jetties for the Navy in Esquimalt, BC, and a new armoury in New Brunswick.

In late January, National Defence Minister Anita Anand said extending and modernizing an airstrip in Inuvik, Northwest Territories, would exceed the $150 million price tag by $80 million. She attributed higher prices for materials and faltering supply chains caused by the COVID pandemic.

First announced in 2019, officials estimate that the completion of the arctic airport upgrades will take place in 2027. 

"The COVID-19 pandemic has [significantly] impacted many of our business lines," said Lamirande. "The impacts of the pandemic on supply chain and industrial capacity are causing manufacturing backlogs and delays."

Defence analyst David Perry of the Canadian Global Affairs Institute said the department's lapse continues to grow, especially in recent years. He attributes this as a symptom of Ottawa's continued difficulties purchasing new military equipment.

Perry added that inflation hiked the cost of military equipment and the defence sector and that Canada would pay more for the same gear and services later.

Veterans Affairs Canada also reported a nearly $1 billion lapse last year, which the department blamed on fewer ill and injured ex-soldiers applying for assistance than expected.

However, critics said the lapsed funding exemplifies veterans' challenges in accessing benefits and services. In 2014, the Royal Canadian Legion demanded the Harper Conservatives explain why $1.1 billion went unspent over seven years.

Under Stephen Harper's Conservative government, political opponents and experts accused them of using significant lapses to make stealthy budget cuts nearing $10 billion a decade ago.

However, the Trudeau Liberals had $14 billion in unspent funds for promised programs and services in the 2019/20 fiscal year.

"If we're not getting those procurement projects through, we're not getting new equipment into the inventory, so we don't have the gear for our troops," said Perry, noting many of the delayed projects were launched with Harper as prime minister.