Parliamentary watchdog says billions in infrastructure spending missing

OTTAWA — The parliamentary budget watchdog says it can’t find billions in new infrastructure spending that is supposed to be in key federal spending projections released earlier this month.

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

The March 9 report lists multiple reasons for the missing $2.5 billion, including that the Liberals may defer some intended spending to future years. It also notes that the spending estimates are presented in such a complicated way that Frechette’s office couldn’t find the money.

The report is the latest in a series of studies from the PBO that have raised critical questions about an 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 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. But the spending figures 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 making it difficult to track the money.

As one example, 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.

The Liberals have vowed to clean up the process and the PBO report presses the government to do so quickly and release one budget document outlining all spending for the year.