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The three levels of government provide Canadians with services that cannot be easily offered by private companies. The federal government is responsible for national defence and international diplomacy, the provinces and territories ensure that Canadians have access to health care and education, and local governments keep our streets clean and our communities safe.

The Constitution Act spells out the responsibilities of each level of government, but their accounting books show where their priorities lie and where they spend tax dollars. In 2009, the three levels of government, plus the Canada and Quebec pension plans, spent a total of $631.3 billion providing services.

All told, the federal, provincial, territorial and local governments, as well as the Canada and Quebec pension plans, closed out fiscal 2008/2009—the fiscal year ended March 31, 2009—with a surplus of $2.4 billion. Revenues for all levels of government combined were down 2.1% from the previous fiscal year; spending rose 2.5%.

Where the money goes

Provincial, territorial and local governments spent $12,517 for every man, woman and child in the country in 2009, but these averages vary widely among the provinces and territories. The costs of providing services in the North are higher; Nunavut spent $44,476 per capita. Among the provinces, per capita spending ranged from $11,372 in Ontario to $14,032 in Saskatchewan.

Social services, health and education are perennially governments’ largest expenditures. In 2009, services such as social security payments, family allowances and income maintenance programs cost $190.3 billion. Health services spending totalled $121.6 billion, and education spending amounted to $95.7 billion. These three areas accounted for about 65% of total government spending; combined with debt charges, they accounted for nearly three-quarters (71%) of all spending.

From 2005 to 2009, government spending on health grew 29%; spending on social services, 21%; and spending on education, 24%.

Spending on foreign affairs and international assistance totalled $6.5 billion in 2009, up 4.8% from the previous year.

Debt charges have been generally declining since 2001. In 2009, they accounted for 6.9% of spending, compared with 9.3% in 2004.

Where the revenue comes from

Government spending has grown 25.8% since 2004, while consolidated government revenues have kept pace, growing 25.4%.

Income tax revenues grew 31.8% from 2004 to 2009; consumption taxes, 8.3%; and contributions to social security plans, 18.4%. Combined, these three revenue sources accounted for almost 70% of total government revenues in 2009.

Before 2009, the government sector posted combined surpluses of more than $20 billion for four consecutive years. The government sector has not posted a deficit since 1999.