OTTAWA – The federal government failed to spend $38 billion, last fiscal year, intended for promised programs and services, including broadband Internet, new military equipment, affordable housing, veterans support and services to the Natives. The “excuse” is that of delays and interruptions due to the Covid-19 pandemic, but the reality is that unspent funds have played an important role in lowering the deficit: in the year ending March 31, 2022, in fact, Canada ran a deficit of $90.2 billion, $23.6 billion less than budgeted for. 

The $38.2 billion (to be precise) declared “overdue” in the last fiscal year (much of which was returned to the federal treasury) marks a new record from a year earlier, when unspent money was $32.2 billion. Astronomical figures compared to the previous record of $14 billion in 2019-20.

The unspent money falls on various federal departments, starting with that of Health.

Health Canada and the Public Health Agency of Canada reported the largest “spending shortfall” of all other departments combined, with nearly $11.2 billion of their budgets (amounting to $28.2 billion) not spent. The money had been set aside for unnecessary anti-Covid initiatives, Health Canada spokeswoman Tammy Jarbeau said, including vaccines, personal protective equipment and rapid tests. “Both Health Canada and the Public Health Agency of Canada have stringent internal financial management controls designed to prevent, detect and minimize errors and financial losses and ensure that funds are spent in the best interests of Canadians” explained Jarbeau, as reports CP24.

The pandemic also features in the justifications of other departments, such as that of Defense which reported a delay of $ 2.5 billion in the last fiscal year. Much of the money was not spent due to delays in delivering new military equipment such as Arctic patrol vessels and upgrades to Army armored vehicles.

There have also been delays on major infrastructure projects for the military, according to Defense Department spokeswoman Jessica Lamirande, including the upgrade and reconstruction of two Navy piers in Esquimalt (B.C.) and a new armory in New Brunswick. “The pandemic has significantly impacted many of our lines of business” Lamirande said. “Supply chain slowdowns have caused production backlogs and delays”. But Lamirande herself has ensured that most unspent funds should be available in future years through a process called refiling, where schedules are revised to reflect planned spending in future years due to such delays.

The Department of Infrastructure, the Canadian Mortgage and Housing Corp. and the Department of Fisheries, which includes the Canadian Coast Guard, have also reported delays, including affordable housing and broadband internet and even in this case the “fault” lies with Covid-19. “Due to unprecedented circumstances in recent years, such as the pandemic, it is expected that it will take longer to disburse funds to project supporters” said CMHC spokeswoman Claudie Chabot.

Other federal entities with large gaps include Indigenous Services Canada ($3.4 billion unspent) and Crown-Indigenous Relations and Northern Affairs Canada ($2.2 billion unspent). However, spokesman Vincent Gauthier, responsible for providing federal services to First Nations, Inuit and Métis, guaranteed that most of the money was reprofiled “so that it is available when the recipients need it”.

Veterans Affairs Canada has in turn reported a delay of almost 1 billion dollars: in this case, the department explained the non-spending by claiming that the number of ex-soldiers, sick and wounded, who have requested assistance has dropped. Due to Covid-19?

In the pic above, Federal Finance Minister Chrystia Freeland (from her Twitter page – @cafreeland)