03. Memorandum to the Minister - Main Estimates

Memorandum to the Minister of Transport 
2025-2026 Main Estimates  

Summary 

The purpose of this note is to seek your approval of the 2025-2026 Main Estimates for Transport Canada and the other organizations within the Transport portfolio. 

The Main Estimates represent the proposed budgets for the upcoming fiscal year. Under normal procedures, Parliament approves the Main Estimates before the government proceeds with its spending plans on April 1. This year, due to the prorogation of Parliament on January 6, 2025, and the dissolution of the government on March 23, 2025, the Main Estimates has not been tabled, resulting in the need to seek funding via Governor General Special Warrants. These Special Warrants are the only mechanism to secure funding for government operations when Parliament is dissolved. They are expected to be used for the first 90 days of the fiscal year, until Parliament can convene, and table and approve the 2025-2026 Main Estimates and related supply.   

The 2025-2026 Main Estimates for Transport Canada totals $3,176.9 million; this is a decrease of $474.9 million from the 2024-2025 Main Estimates mainly due to the sunsetting of the Incentives for Zero-Emission Vehicles Program (iZEV) and for decreased costs pertaining to the High-Speed Rail (HSR) project. [ Redacted ]

The 2025-2026 Main Estimates for the Crown Corporations, including their change since the 2024-2025 Main Estimates are as follows: 

1. VIA Rail Inc. totals $1,337.8 million, an increase of $178.4 million  

2. Canadian Air Transport Security Authority totals $1,201.9 million, an increase of $7.6 million  

3. VIA HFR Inc. totals $597.0 million, an increase of $551.8 million  

4. Marine Atlantic Inc. totals $182.5 million, an increase of $23.5 million  

5. Federal Bridge Corporation Limited is zero, a decrease of $17.9 million  

Recommendation: It is recommended that you approve the 2025-26 Main Estimates for Transport Canada and the Crown Corporations in the Transport portfolio as outlined in Annex B.  

____________________________	____________________________
Deputy Minister of Transport	Associate Deputy Minister of Transport
	Date: _________________
_____I approve    _____ I do not approve		____I approve with conditions
_________________________________		Date: _________________
Minister of Transport and Internal Trade

Background and Considerations 

The Main Estimates support the Appropriation Act which provides expenditure authorities to Departments, Agencies, and Crown Corporations. They are customarily tabled in Parliament before the start of each fiscal year, by the President of the Treasury Board on behalf of all Departments, Agencies and Crown Corporations. 

The Main Estimates present the proposed budgets for the upcoming fiscal year, by organization and Vote. The spending authority by vote represents how the funding will be included in subsequent Appropriation Bills. Parliament must approve these votes before government can proceed with its spending plans. 

Financial information provided in the Main Estimates is also reflected in the Departmental Plan, which provides a multi-year overview of financial resources, departmental priorities and expected results. 

Analysis and Considerations:  

Transport Canada 

The Department’s 2025-2026 Main Estimates totals $3,176.9 million ($2,862.2 million in voted funding and $314.7 million in statutory funding).  

Overall, the Department’s total authorities for 2025-26 have decreased by $474.9 million over previous year’s Main Estimates of $3,651.8 million, as follows:  

• $54.7 million decrease in voted Operating funding 

• $37.7 million decrease in voted Capital funding 

• $420.5 million decrease in voted Grants and Contributions  

• $38.0 million increase in statutory funding 

The overall decrease in TC’s Main Estimates is mostly attributed to decreases in Voted funding for the Incentives for Zero-Emission Vehicles Program and the High-Speed Rail project (2024-2025 was higher because it included funding for private sectors to develop and submit their design bids). Details on funding variances can be found in Annex A. 

Crown Corporations 

VIA Rail Inc.: $1,337.8 million in 2025-2026 

• $178.4 million increase in funding compared to last year is mostly due to the Budget 2024 decision to offset increased operating costs and to allow the corporation to undertake renewal of its long-distance regional and remote fleet of trains. 

Canadian Air Transport Security Authority (CATSA): $1,201.9 million in 2025-2026 

• $7.6 million increase in funding compared to last year is mostly due to a realignment of funding from previous years to support CATSA’s operations including Explosives Detection Systems (EDS). 

VIA HFR Inc.: $597.0 million in 2025-2026 

• $551.8 million increase in funding compared to last year is due to additional funding from Budget 2024 and a 2025 off-cycle to continue the HSR project. This funding will support the Crown’s core and enabling activities and allow the project to complete the procurement phase and undertake its next phase: co-development.      

Marine Atlantic Inc. (MAI): $182.5 million in 2025-2026 

• $23.5 million increase in funding compared to last year is due to Budget 2024 top up funding to support operations and to allow the corporation to maintain fares at current levels on the Port aux Basques route until the end of fiscal year 2025-26. 

The Federal Bridge Corporation Limited (FBCL): $0 million in 2025-2026 

• $17.9 million decrease in funding compared to last year is due to the sunsetting of funding from a 2022 off-cycle decision for critical infrastructure projects. FBCL is currently drafting its submission for the recent sunsetter approval, for access in the first available Supplementary Estimates in 2025-26. In the meantime, FBCL has access to revenue outside of voted authorities to continue operations. 

Communications 

TC’s Main Estimates for 2025-26 will be tabled in Parliament and then published online.  This publication does not represent a proactive communications opportunity. Should the Department receive a media call, existing media lines would be updated to respond to specific questions.  

Media enquiries concerning funding requests for Crown Corporations (CATSA, FBCL, MAI, Via Rail, Via HFR) will be directed to those organizations, as they operate at arm’s-length from government and are responsible for their spending decisions. 

Next Steps 

The Chief Financial Officer and I are available to brief you at your convenience. 

Attached are TC’s and the Crown Corporations’ most recent 2025-26 Main Estimates page proofs. Tabling in Parliament is expected to occur as early as the end of May 2025. 

After tabling of the Main Estimates, it is expected that the Minister and departmental officials will be invited to appear before a parliamentary committee. Briefings and supporting materials are being prepared to support these appearances. 

Attachments 

1. Annex A – Detail of the year-over-year variances for TC’s Main Estimates 

2. Annex B – Page proofs for TC, CATSA, FBCL, MAI, VIA Rail, VIA HFR. 

Approver: 

	_____________________	_____________
	Jaime Caceres  Chief Financial Officer and Assistant Deputy Minister, Finance and Management Services	Date

Financial Assessment: I have reviewed the financial implications, performance and risk management strategies, accountability and control frameworks. Based on the results of my examination, I can confirm that the proposal is fairly presented and that the proper resource analysis has been carried out to support the recommendation to proceed with this proposal.
	_____________________	_____________
	Jaime Caceres  Chief Financial Officer and Assistant Deputy Minister, Finance and Management Services	Date

ANNEX A 

TC – Detail of the year-over-year variances for Main Estimates (in $ millions) 

	Operating	Capital	G&C	Reason for Variance
Incentives for Zero-Emission Vehicles Program			(323)	The decrease is due to the winddown of the Incentive for the Light Duty Zero Emission Vehicles program.  The program was officially paused on January 10, 2025.
Airport Critical Infrastructure Program (ACIP)			(86)	The decrease is due to the winddown of the Airport Critical Infrastructure Program which was established to address critical needs during the COVID-19 pandemic.
Rail Safety Improvement Program			(22)	The decrease is due to the winddown of the Budget 2019 funding for the Rail Safety Improvement Program.
Eastern Canada Ferry Services Program   Ferry Services Contribution Program		9	(11)	The increase in Capital is due to realignment of funding to meet various capital project needs of the Eastern Canada Ferry Services Program.  The decrease in Contribution is due to the winddown of the Budget 2023 funding which addressed funding pressures associated with the Ferry Services Contribution Program and allowed the charter of the MV Saaremaa for the 2023 and 2024 peak seasons after the MV Holiday Island was removed service due to an onboard fire in 2022.
High Speed Rail	(100)		1	The decrease is because the 2024-25 funding included design bid fee.
National Trade Corridors Fund*	(12)		(49)	The decrease in Operating funding is due to the winddown of Budget 2021 funding.  The decrease in Contribution funding is predominately to match recipient cash requirements.
Federal Contaminated Sites Action Plan	22			The increase in funding is due to Budget 2024 decision to support remediation activities, site assessments and program management activities.
Renewed Collective Agreements	10			The increase in funding reflects the higher rate of pay in collective agreements renewals.
Transportation Security Clearances	8			The increase in funding is due to Budget 2024 decision to support the increase in the number of complex applications received by the Transportation Security Clearance Program.
Funding to freeze tolls for the Confederation Bridge	7			The increase in funding is due to Budget 2024 decision to maintain tolls for the Confederation Bridge at the current levels until the end of 2026 to provide financial relief to Bridge users.
Funding to establish the National Supply Chain Office, support Supply Chain Analytics, Data and Visibility and enhance air sector performance data	6			The increase in funding is due to Budget 2023 decision to establish a National Supply Chain Office, a single window platform for industry and other stakeholders and the federal focal point to advance industry and government-wide efforts to strengthen the performance, efficiency, resiliency and reliability of Canada’s transportation and logistics supply chains.
Lac Mégantic Rail ByPass Project	4		(10)	The variance in funding is to realign with the project needs and deliverables to construction of the bypass and dismantling and remediating the existing corridor.
Renewal of the Port Asset Transfer Program	4		29	The increase in funding is due to Budget 2024 decision to further reduce the inventory of local ports held by TC by transferring and/or, demolishing along with ensuring the safe operation of port facilities that remain with TC.
Implementation of the Oceans Protection Plan	3	(49)	10	The increase in Operating as per Budget 2022 decision to renew and expand the Oceans Protection Plan.  The decrease in Capital is to realign with the project needs of the new aircraft hangar for the National Aerial Surveillance Program in Iqaluit, part of the Government of Canada’s Oceans Protection Plan.  The increase in Contribution funding under the Program to Protect Canada’s Coastline and Waterways is to realign with the resource requirements of the recipients.
Incentives for Medium- and Heavy-Duty Zero-Emission Vehicles Initiative		(10)		The decrease is due to the winddown of Budget 2022 funding for the design and build of the Medium Heavy Duty Zero Emission Vehicle program at the Commercial Vehicle Laboratory at the Motor Vehicle Test Centre.
Funding for Aviation Security		(3)		The decrease is due to the winddown for the funding to support the modernization of the Transportation Security Clearance program.
Funding for Explosives Detection Dog and Handler Team		(2)		The decrease is due to the winddown of Budget 2023 funding to expand and enhance the Explosives Detection Dog and Handler Teams at TC.
Fisherman’s Wharf at Cap-aux-Meules		17		The increase is due to realignment of funding to meet the capital project needs of the reconstruction of the fisherman’s wharf to ensure the safety of users and enable operations to continue.
Remote Passenger Rail Program			22	The increase in funding is due to Budget 2024 decision to support two remote passenger rail services owned by Indigenous communities, which provide an essential and affordable means of transportation to and from Indigenous communities that are otherwise isolated from the national transportation system.
Green Shipping Corridor Program			21	The increase in funding is due to Budget 2023 decision to support the development of marine green shipping corridors. Projects funded under this program will further the decarbonization of Canada’s marine sector and Canada’s international commitments, such as the Clydebank Declaration signed at the 2021 United Nations Climate Change Conference.
Budget 2023 Refocusing Government Spending Initiative*	(7)		(2)	Ramp up of Budget 2023 Refocusing Government Spending initiative.
Total Change	(55)	(38)	(420)

Note: For Gs&Cs, Budget 2023 Refocusing Government Spending reductions is $22M more in 2025-2026 Main Estimates compared to the 2024-2025 Main Estimates.  Most of the increase is for the National Trade Corridors Fund (NTCF) and, in the table above, is reflected in the NTCF line rather than the RGS line.