Liberal spending estimates short $2.5B on infrastructure: budget office

Parliamentary Budget Officer Jean-Denis Frechette on Parliament Hill in Ottawa, on April 19, 2016. (Adrian Wyld / THE CANADIAN PRESS)

OTTAWA -- The parliamentary budget office and the Liberals clashed again Thursday over the government's infrastructure spending program, with the watchdog saying billions were missing from planned spending and the government arguing the watchdog didn't read the numbers correctly.

Underlying the dispute was a point both sides wanted to make: the way the federal government reports on its spending plans for the year is so opaque that it is difficult to know where the money is going.

The spending figures in the estimates don't line up nicely with the budget, which will be released on March 22, meaning that parliamentarians don't get the full picture on government spending.

As one example, Jean-Denis Frechette's report cites the end of the universal child care benefit, which was replaced in last year's budget by the new Canada child benefit. The new benefit is more expensive than the one it replaced, but the department overseeing the program is nonetheless seeing its spending drop by $4.2 billion from the last year.

A spokesman for Treasury Board President Scott Brison, who oversees the release of the spending estimates, said the government understands the difficulty of easily identifying funding specifics in the estimate documents. Referring to the PBO report, Jean-Luc Ferland said it "is emblematic of the confusion the main estimates create year after year."

Ferland said the Liberals hope to clean up the process soon, and the PBO report presses the government to do so quickly and release one budget document outlining all spending for the year.

The parliamentary budget officer reported the main spending estimates for the next 12 months were supposed to include some $8 billion in new infrastructure spending, but Jean-Denis Frechette said the documents only show $5.5 billion in infrastructure allocations.

The $8 billion figure included an extra $700 million the government added in the fall into the infrastructure pot for the next 12 months -- an amount the Liberals said wasn't in the estimates.

Even then, Frechette said, the government promoted the spending plans as including more than $7 billion in new infrastructure funding. "However, it is challenging to reconcile this statement with the figures presented in the document," the report said.

Frechette's report lists multiple reasons for the missing $2.5 billion, including that the Liberals may defer some intended spending to future years, or that the spending estimates themselves are presented in such a complicated way that Frechette's office couldn't find the money.

The Liberals disputed some of the PBO's findings. For instance, Ferland said the estimates contained $1.2 billion in allocations for social infrastructure, while the PBO found $251 million.

Thursday's report was the latest in a series of studies from the PBO that have raised critical questions about the Liberals new infrastructure program that is supposed to be a pillar of the government's economic growth strategy.

The report predicts that the Liberals will only be able to spend half of their planned federal infrastructure money this fiscal year.

The lack of federal spending doesn't mean money isn't being spent on projects. The federal government only reimburses cities and provinces for work once receipts are submitted, meaning there is usually a delay between construction work and funding flowing from the federal treasury.

Just how much has been spent to date is unclear.

Conservative infrastructure critic Dianne Watts blamed the spending problems on an overly complex application process for municipalities.

"It is no surprise that the government will fail to deliver half of the allocated infrastructure dollars this year and that billions have vanished from the government's spending projections for next year," Watts said.

"The Liberals need to come up with an open and transparent plan that makes it easy for municipalities to access infrastructure dollars."

The main spending estimates for the coming fiscal year outline $257.9 billion in spending, an increase of $7.8 billion from last year, the PBO said.

The watchdog reported the government expects spending on individuals like seniors' and children's benefits to increase by $4.7 billion from last year, hitting $95.9 billion, while payments to provinces for things like health care will rise by $1.6 billion to $70 billion.