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Three-fifths of total federal, provincial, territorial and local spending went to social protection, health care and education in 2019

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Released: 2020-11-27

Governments in Canada spent an estimated $798.5 billion in 2019, the majority (61.0%) of which was directed towards social protection, health care and education. Spending on education (+3.7%) grew at the fastest pace in 2019, followed by spending on social protection (+3.4%) and health care (+2.9%).

Impacts of COVID-19 on the 2019 reference year

The 2019 reference year corresponds to the fiscal year ending March 31, 2020, for the federal, provincial and territorial governments. The current estimates include, among other things, retroactive payments for the Canada Emergency Wage Subsidy.

The marked decline in economic activity in the 2020 reference year, coupled with broad fiscal measures implemented in response to the COVID-19 pandemic, will lead to record spending, especially for the federal government.

Social protection remains the largest expense of the Canadian general government

The consolidated Canadian general government—that is, the federal, provincial, territorial, local and other government entities combined—increased spending on social protection by 3.4% in 2019 to $190.6 billion. This accounted for almost one-quarter (23.9%) of total government spending.

Social protection includes programs such as Old Age Security, family benefits, disability payments and unemployment benefits. The increase in 2019 (+3.4%) was primarily driven by higher spending on Old Age Security (+$4.9 billion) and family and children benefits (+$3.1 billion).

Health care spending rose 2.9% to $186.5 billion, accounting for 23.4% of total government spending. This was equivalent to $4,910 per Canadian. The increase was largely attributable to higher spending on hospital services, which rose 3.5% to $123.4 billion.

Spending on education rose 3.7% from 2018 to $109.9 billion. Excluding public debt transactions, which are considered a general public service, education was the third largest expense in 2019, accounting for 13.8% of total government spending. Although spending was up for every level of education, primary and secondary education contributed the most to the increase, rising 3.4% to $67.2 billion.

Chart 1  Chart 1: Share of consolidated Canadian general government expenses by function, 2008 to 2019
Share of consolidated Canadian general government expenses by function, 2008 to 2019

Canadian general government increases economic affairs spending in response to COVID-19 pandemic

The Canadian general government increased its spending on economic affairs by 12.8% in 2019 to $75.7 billion, accounting for 9.5% of total expenditures. Economic affairs refers to economic activities such as agriculture, energy, mining or transport.

The most notable increases in economic affairs spending were in general economic, commercial, and labour affairs (+$4.2 billion) and fuel and energy (+$2.2 billion). Federal government spending on the Canada Emergency Wage Subsidy was the main reason for the increase in the former, while provincial, territorial, and local governments drove the increase in the latter.

Health remains largest expense of provincial, territorial and local governments

Health (32.7%) remained the largest expense among provincial, territorial and local governments combined, accounting for nearly one-third of their total spending in 2019.

On a per capita basis, health expenses were the highest provincially in Newfoundland and Labrador ($6,449), Nova Scotia ($5,577) and New Brunswick ($5,566). The lowest health expenses per capita were in Ontario ($4,440), Prince Edward Island ($4,622) and British Columbia ($4,648).

Based on the average of the provinces, hospital services accounted for the largest proportion of health expenses at over two-thirds (69.9%), followed by outpatient services (13.0%) and medical products, appliances and equipment (6.1%).

Chart 2  Chart 2: Share of consolidated provincial, territorial and local government expenses by function, 2019
Share of consolidated provincial, territorial and local government expenses by function, 2019

Primary and secondary education dominate provincial educational spending

Spending on primary and secondary education was the largest educational expense for every province. On average, primary and secondary education accounted for almost two-thirds (63.2%) of provincial education spending, university education accounted for almost one-quarter (24.4%) and college education accounted for 10.5%.

Saskatchewan ($3,331), Alberta ($3,145), and Prince Edward Island ($2,939) spent the most on education on a per capita basis, while British Columbia ($2,283), Quebec ($2,344) and Nova Scotia ($2,628) spent the least.

Manitoba had the highest per capita increase on education spending (+6.4%) compared with 2018, while Ontario (-0.3%) had the lone decline, partly attributable to labour actions by Ontario teachers.

British Columbia increases social protection spending for second consecutive year

Among provincial and local governments, spending on social protection on a per capita basis was highest in Saskatchewan ($2,479) and Quebec ($2,384), and lowest in Prince Edward Island ($1,187) and Nova Scotia ($1,336).

British Columbia reported the highest growth in social protection spending for the second year in a row, up 12.1% to $9.1 billion ($1,776 per capita). The increase in social protection spending was mainly attributable to housing and social development as well as children and family development programs.

Alberta shows strong growth in economic affairs

Total provincial, territorial and local government spending on economic affairs rose 6.7% to $58.4 billion in 2019. This increase was largely attributable to higher spending on energy (+$2.2 billion) and transport (+$0.9 billion).

The increase in spending on energy was led by Alberta (+$1.3 billion) and Ontario (+$0.9 billion). For the second consecutive year, the increase in Ontario was mainly due to the Electricity Price Mitigation program. Alberta's increase was mainly due to expenses from the province's crude-by-rail program.

On a per capita basis, provincial spending on economic affairs was highest in Alberta ($2,611), Prince Edward Island ($1,934) and Quebec ($1,578), and was lowest in British Columbia ($790), Manitoba ($823) and Nova Scotia ($1,170).

Western Canada wildfires impact spending on agriculture, forestry, fishing, and hunting

Alberta and British Columbia experienced divergent wildfire seasons in 2019, and wildfires had a significant impact on their agriculture, forestry, fishing, and hunting expenses.

Alberta's spending on agriculture, forestry, fishing, and hunting in 2019 increased by almost one-third (+32.6%) to $1.6 billion, mainly attributable to wildfire expenses. According to media reports, in 2019, wildfires burned more land in Alberta than any year in the past four decades.

Conversely, British Columbia's spending fell by over one-fifth (-22.7%) to $1.0 billion, largely due to a decrease in wildfire expenses. The 2019 wildfire season in British Columbia was the second-least-active since 2011.


  Note to readers

The COVID-19 outbreak, declared a pandemic on March 11, 2020, has led to economic disruptions across the globe. The Canadian federal, provincial, territorial and local governments took unprecedented economic measures to help limit the spread of the virus. The most recent Canadian Classification of Functions of Government (CCOFOG) data for the 2019 reference year includes annual data for the fiscal year ended March 31, 2020. Although the COVID-19 pandemic impacted government expenditures at the end of this period, the impacts being felt in the current fiscal year, ending March 31, 2021 (2020 reference year), will be much more significant.

The CCOFOG organizes government expenses into their main socioeconomic functions. This information provides an important picture of how governments spend money, and the role governments play in delivering services.

CCOFOG is a variant of the international functional expenditure classification that was developed by the Organisation for Economic Co-operation and Development. CCOFOG replaced the Financial Management System that was used by Statistics Canada until 2008.

Currently, CCOFOG data exclude the acquisitions of non-financial assets and consumption of fixed capital expenses. Future data improvements may include the functionalization of capital expenditures and the consumption of fixed capital.

The consolidated provincial, territorial and local government (PTLG) estimates are often used for provincial and territorial comparisons since there can be different delineations of responsibilities between levels of government in various jurisdictions. These estimates combine provincial and territorial governments, health and social service institutions, universities and colleges, municipalities and other local public administrations, and school boards, while removing interparty transactions. The consolidated Canadian general government estimates combine the federal government with PTLG data. They exclude data for the Canada Pension Plan and the Quebec Pension Plan, and for federal and provincial government business enterprises.

The constitutional framework of PTLGs in the territories differs from the framework in the provinces. This leads to differences in the roles and financial authorities of government. These differences, as well as other geographic, demographic and socioeconomic dissimilarities between the North and the rest of Canada, give rise to marked disparities in government finance statistics.

Since the size of PTLG estimates varies significantly across jurisdictions because of different population sizes, per capita data are used for expense comparisons. Per capita data are based on population estimates for Canada, the provinces and the territories, available in table 17-10-0009-01.

Annual data correspond to the end of the fiscal year closest to December 31. For example, data for the federal government fiscal year ending on March 31, 2020 (fiscal year 2019/2020) are reported as the 2019 reference year.

Products

The Canadian Classification of Functions of Government classification structure and descriptions are now available under the related information module of our website.

Additional information can be found in the Latest Developments in the Canadian Economic Accounts (Catalogue number13-605-X). The User Guide: Canadian System of Macroeconomic Accounts (Catalogue number13-606-G) is also available. This publication has been updated with Chapter 9. Government sector accounts in the Canadian System of Macroeconomic Accounts.

Contact information

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