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An Act for granting to His Majesty certain sums of money for the federal public administration for the fiscal year ending March 31, 2026
Short title: Appropriation Act No. 2, 2025-26
Bill type: House Government Bill Appropriation
Sponsor: President of the Treasury Board
This Bill received royal assent on Thursday, June 26, 2025
BILL C-7 — SUMMARY Appropriation Act No. 2, 2025–26
Bill C-7 authorizes $8.58 billion in supplementary federal spending from the Consolidated Revenue Fund for the fiscal year ending March 31, 2026. It covers expenses not included in the primary appropriation (Bill C-6). It received Royal Assent on June 26, 2025, but was deemed effective April 1, 2025 — retroactively authorizing spending already committed. Nearly all of the funding — $8.21 billion — goes to National Defence.
WHO GAINS POWER
The Minister of National Defence gains authority over $8.21 billion in supplementary spending across three votes — operating expenditures, capital expenditures and grants and contributions — with a total multi-year commitment authority of $86.76 billion, of which $52.95 billion is payable in future years.
The Communications Security Establishment gains $370 million in program expenditures plus authority to use revenues from its own operations to offset its costs — a self-funding mechanism that reduces parliamentary visibility into its actual spending levels.
The Governor in Council retains authority under the Defence Appropriation Act, 1950 to approve the provision of defence supplies and facilities — an authorization rooted in legislation that is over 75 years old.
Treasury Board retains authority to make accounting adjustments to departmental accounts after the fiscal year ends but before Public Accounts are tabled in Parliament — meaning the final numbers can be adjusted outside the parliamentary calendar.
WHO LOSES POWER
Parliament votes yes or no on the full $8.58 billion as a single block — no ability to scrutinize, amend or redirect individual line items within the Defence or CSE allocations.
The retroactive effective date of April 1, 2025 means spending was already committed before Parliament voted — the same structure as Bill C-6.
WHO GAINS MONEY
National Defence — $8.21 billion:
- Operating expenditures: $3.97 billion (including pension, insurance and social security for employees abroad)
- Capital expenditures: $804.6 million (defence infrastructure and equipment)
- Grants and contributions: $3.44 billion (may be paid as cash or delivered as goods, services or facilities)
Defence contractors, equipment manufacturers and service providers receive funding through the grants and contributions vote — which explicitly includes defence equipment transfers and defence services provision.
Communications Security Establishment — $370 million: CSE gains both direct program funding and authority to generate and retain revenue from operations — reducing dependence on annual parliamentary appropriations for a portion of its budget.
WHO LOSES MONEY
Taxpayers authorize $8.58 billion in a single vote with no line-item review available to Parliament.
Future taxpayers bear the cost of $52.95 billion in defence commitments already payable in future years — authorized through multi-year commitment authority that extends well beyond the current fiscal year.
THE SUPPLEMENTARY STRUCTURE
Bill C-7 is the second appropriation bill for the same fiscal year — layered on top of Bill C-6's $149.7 billion. Key structural points:
- ❌ No requirement to explain why these expenses were not included in the primary appropriation
- ❌ Grants and contributions vote allows payment in goods, services or facilities — not just cash — reducing the transparency of what is actually transferred and to whom
- ❌ CSE's revenue offset authority reduces parliamentary visibility into its true operating cost
- ❌ Post-year-end accounting adjustments can be made before Public Accounts are tabled — outside the parliamentary review window
WHO HOLDS THE SYSTEM ACCOUNTABLE?
- ❌ Parliament — single yes or no vote on $8.58 billion; no line-item review
- ❌ Independent oversight of CSE — revenue offset authority reduces the portion of CSE spending subject to annual appropriation scrutiny
- ❌ Future Parliament — $52.95 billion in future-year defence commitments are already authorized; future Parliaments inherit the obligation
- ❌ Public Accounts review — post-year-end accounting adjustments occur before tabling, outside the parliamentary calendar
[Source: Bill C-7 — Appropriation Act No. 2, 2025–26, Royal Assent June 26, 2025]