Chapter 5
The government sector: non-market producers

View the most recent version.

5.1 The government sector
5.2 Federal government sub-sector
5.3 Pension plans
5.4 Provincial and territorial government sub-sector
5.5 Local government sub-sector
5.6 First Nations and other Aboriginal government sub-sector

5.1 The government sector

The government sector is composed of all governments as well as all non-profit entities created by public administrations to deliver goods and/or services for the benefit of society. In statistical terms, they are collectively referred to as non-market producing units. They are classified within the Canadian System of National Accounts (CSNA) – Classification of Institutional Units by Sector according to economic activity and government of control.

The government sector contains all

• federal, provincial and territorial government ministries and departments
• municipalities
• First Nations and other Aboriginal governments
• non-autonomous funds and organizations
• autonomous funds and organizations
• public universities and colleges
• public school boards
• public health and social service institutions
• non-autonomous government pension funds
• Canada and Quebec Pension Plans (CPP/QPP).

The government sector does not include supranational bodies such as the United Nations (UN) or other international organizations that may exist and operate within Canada. They are treated as non resident units that are outside the public sector universe.

The government sector is divided into sub-sectors that group units by their government of control. This partitioning facilitates the study of activities at finer levels of detail and allows for comparisons among governments. The Canada and Quebec Pension Plans (CPP/QPP) are unique services. They are positioned at the sub-sector level to form their own distinct grouping.

Entities in the federal sub-sector are classified in the Canadian System of National Accounts – Classification of Institutional Units by Sector system within this structure:

• federal government sub-sector
• Canada Pension Plan (CPP) and the Quebec Pension Plan (QPP) sub-sector
• provincial and territorial government sub-sector
• local government sub-sector
• First Nations and other Aboriginal governments sub-sector.

5.2 Federal government sub-sector

The federal government sub-sector contains the federal government and all non-market producing units under its control. These entities are engaged in the creation and implementation of federal government policy and the delivery of services such as justice, civil order and the regulation of economic and social actions. They are classified in the Canadian System of National Accounts (CSNA) – Classification of Institutional Units by Sector within this structure:

• federal government sub-sector
  • federal general government component
    • federal ministries and departments sub-component
    • federal non-autonomous funds and organizations sub-component
    • federal autonomous funds and organizations sub-component
  • federal non-autonomous pension plans component.

5.2.1 Federal general government component

The federal general government component contains all federal non-market producing units that operate as ministries, departments, non-autonomous and autonomous government funds and organizations.

5.2.1.1 Federal ministries and departments sub-component

This sub-component contains all federal ministries and departments that provide goods and services for the benefit of society such as justice, civil order and the regulation of economic and social actions. These units are not institutional units. They are sub-units which are listed in the public sector universe to delineate the elements of consolidation that constitute the federal government entity.

5.2.1.2 Federal non-autonomous general government funds and organizations sub-component

The federal government creates entities that do not have the legal or the financial autonomy to function on their own. They are generically referred to as non-autonomous funds and organizations. These entities are special purpose accounts, funds or organizations that do not meet institutional unit criteria. They do not maintain a complete and separate set of financial statements, do not own assets, cannot incur liabilities, nor act on their own behalf. However, they are directly controlled by the federal government, operate within the budgetary framework of a department or ministry, and are normally reported in the government's consolidated financial statements. For example, these types of entities could provide support services in areas such as employment insurance, human rights, security intelligence or environmental damage. They are classified as sub-units in the public sector universe and included to identify the elements of consolidation that comprise the federal government entity.

5.2.1.3 Federal autonomous general government funds and organizations sub-component

Federal autonomous general government funds and organizations are special purpose entities created by the federal government to deliver particular goods and/or services to the public.  For example, they might provide deposit insurance, support national museums and parks, or regulate transportation safety. They are sustained by public funds and mandated to account for their operations annually to Parliament. For this purpose, they keep a complete and separate set of financial statements in order to disclose their activities when required. They are non-market producing institutional units classified in the public sector as a constituent of federal general government.

5.3 Pension plans

Pension plans provide income on retirement for specific groups of employees. They are created by governments through legislation that stipulates the pension plan's authority, organization, operation and benefit scheme. The mandatory contributions to these plans form pools of funds that are used to meet the pension plan's obligations.

Pension plans may be either trusteed or non-trusteed. In trusteed pension plans, the sponsoring government may assume the role of trustee or a private sector agent may be appointed. In either case, the trustee is the sole custodian of the pension funds and, by law, may not use the funds for any other purpose than to serve the pension plan. In non-trusteed pension plans, the sponsoring government manages the pension plan; there is no trustee. As administrator, the government has full access to the pension funds in order to service the pension plan or for any other purpose such as directing surplus pension funds for investment.

5.3.1 Trusteed Pension Plans: Autonomous institutional units

Governments determine the best method to provide pension benefits for their employees. Governments create pension plans through legislation that specifies a plan's benefit scheme, contributory obligations, organization, and the treatment of the pension funds generated by contributions and investments. Governments appoint trustees to provide administration and management expertise and the legislation stipulates the authority and accountability requirements that the trustees must exercise over the pension plan. The trustees may be an agent in the private sector or the government may assume this role.

The trustees ensure that there are sufficient funds to meet the current and future requirements of the pension plans. To achieve this directive, they invest surplus pension funds to acquire non-financial and financial assets with the view of making a financial gain at minimum risk to the pension funds. The trustees are obliged to prepare annual reports that include a full set of audited financial statements, to account for the assets under their management. The trustees charge the plan for their services. Some examples of autonomous pension plans are municipal employees' retirement plans and teachers' pension plans.

By legislation, trusteed pension funds are autonomous institutional units. They are legally entitled to own assets, engage in economic activities, incur liabilities, and maintain a complete set of accounts. However, trusteed pension funds are not controlled by governments. The trustee is the custodian of the pension funds on behalf of the beneficiaries. In this role, the trustee has the delegated authority to control the pension funds and act as the legal owner of the pension's assets. Since the government does not control the pension funds, trusteed pension plans are not part of the public sector universe.

5.3.2 Non-trusteed pension plans: Non-autonomous units

Governments may provide retirement schemes for their employees without the assistance of trustees. Such schemes are organized as non-trusteed pension plans. In these circumstances, the sponsoring government performs the duties of pension plan administrator by directing the plan's operational requirements and by managing the funds generated from employee contributions. The pension funds may be held in accounts that are kept separate from the government's other special purpose accounts or the contributions may be deposited directly into the government's general revenue fund. The administrator has access to these funds, using the monies for benefit payouts and administrative costs. Surplus pension funds can be transferred to other government agents for investment purposes.

Non-trusteed pension plans are not institutional units. They are not legally entitled to own assets, cannot engage in economic activities, or can they incur liabilities. As well, the administrator is not obliged to keep a complete set of accounts. The government controls the pension fund's accounts and financial activities. As non-autonomous fund accounts, the pension funds are consolidated with the financial transactions of the government managing the plan. Thus, non-autonomous pension funds are constituents of the government sector. Some examples of non-autonomous pension plans are the parliamentary, legislative and public service pension fund accounts and the public service superannuation account.

Non-autonomous pension plans that are organized and directed by federal, provincial, and territorial governments are grouped in separate components within the government sector of the public sector universe. Since non-autonomous pension plans are not institutional units, they are classified as sub-units in the public sector and included to identify the elements of consolidation that comprise a government entity.

5.3.3 Canada and Quebec Pension Plans (CPP/QPP) sub-sector

The Canada Pension Plan (CPP) and the Quebec Pension Plan (QPP) comprise the Canada and Quebec Pension Plans component. They are equivalent social security plans but administered by different levels of government. The Canada Pension Plan is administered by the federal government and the Quebec Pension Plan is administered by the government of Quebec.

The Canada Pension Plan and the Quebec Pension Plan are institutional units classified in the Canadian System of National Accounts (CSNA) – Classification of Institutional Units by Sector within this structure:

• Canada and Quebec Pension Plans sub-sector
  • Canada Pension Plan component
    • Canada Pension Plan sub-component
  • Quebec Pension Plan component
    • Quebec Pension Plan sub-component.

5.4 Provincial and territorial government sub-sector

The provincial and territorial government sub-sector contains all provincial and territorial governments as well as all non-market producing units under their control. These entities are engaged in the creation and implementation of government policy and/or the delivery of government services within their jurisdiction.

The sub-sector is divided into components and sub-components that group units according to their activity. The provincial and territorial government sub-sector is divided into these components: general government; non-autonomous pension plans; universities and colleges; and health and social service institutions. There are sub-components that segregate the component constituents into greater detail, for example ministries, universities, and health boards.

Entities in the provincial and territorial sub-sector are classified in the Canadian System of National Accounts (CSNA) – Classification of Institutional Units by Sector within this structure:

• provincial and territorial government sub-sector
  • provincial and territorial general government component
    • ministries and departments sub-component
    • non-autonomous funds and organizations sub-component
    • autonomous funds and organizations sub-component
  • provincial non-autonomous pension plans component
  • universities and colleges component
    • universities sub-component
    • colleges, vocational and trade institutions sub-component
  • health and social service institutions component
    • health boards sub-component
      • hospitals
      • residential care facilities
      • other heath care facilities
      • other health care services
      • other services under the jurisdiction of health boards
    • social service organizations and community boards sub-component
    • other health and social service organizations sub-component.

5.4.1 Provincial and territorial general government component

The provincial and territorial general government component contains all provincial and territorial non-market producing units that operate as ministries, departments, non-autonomous and autonomous government funds and organizations.

5.4.1.1 Provincial and territorial ministries and departments sub-component

The provincial and territorial ministries and departments sub-component contains all provincial and territorial non-market producing units that provide goods and services for the benefit of society, such as justice, civil order, and the administration of education, health and social services. These units are not institutional units. They are sub-units, which are listed in the public sector to identify the elements of consolidation that constitute a provincial or territorial entity.

5.4.1.2 Provincial and territorial non-autonomous general government funds and organizations sub-component

Provincial and territorial governments create entities that do not have the legal or the financial autonomy to function on their own. They are generically referred to as non-autonomous funds and organizations. These entities can be special purpose accounts, funds or organizations, as specified in government regulations that do not meet institutional unit criteria. They do not maintain a complete and separate set of financial statements, do not own assets, cannot incur liabilities, nor act on their own behalf. However, they are directly controlled by a provincial or territorial government, operate within the budgetary framework of a department or ministry, and are normally included in the provincial or territorial government's consolidated financial statements. For example, these types of entities could provide human rights, victim's assistance or emergency measures services. They are classified as sub-units in the public sector universe to identify the elements of consolidation that comprise a provincial or territorial government reporting entity.

5.4.1.3 Provincial and territorial autonomous general government funds and organizations sub-component

Provincial and territorial autonomous general government funds and organizations are special purpose entities created by public administrations to deliver particular goods and/or services to the public. For example, these types of entities could provide public housing, legal aid or workers' compensation services. They are sustained by public funds and mandated to account for their operations annually to their respective legislatures. For this purpose, they keep a complete and separate set of financial statements in order to disclose their activities when required. They are non-market producing institutional units classified in the public sector as a constituent of provincial and territorial general government.

5.4.2 Universities and colleges component

Provincial and territorial governments provide financial support to post secondary education institutions. This may take the form of grants, transfer payments, or funding for special purposes, such as the construction of new buildings, repairs to existing structures, or research. Governments frequently impose accountability requirements on the institutions that receive public funds. The degree of government control over these funding arrangements is an indication as to whether the entity will be classified as an institutional unit in the government sector.

All government controlled, non-market producing, institutional units operating as universities and colleges are identified in the public sector as a separate aggregation to enable analytic study of this activity. The universities and colleges component is divided into two sub-components:

• universities sub-component
• colleges, vocational and trade institutions sub-component.

5.4.2.1 Universities sub-component

The universities sub-component contains all government controlled post-secondary education institutions that have the authority to grant degrees. Most of these institutions are called universities. However, some are called colleges and a few are known as institutes or schools. They are non-market producing institutional units classified in the public sector as a constituent of provincial and territorial government.

5.4.2.2 Colleges, vocational and trade institutions sub-component

The colleges, vocational and trade institutions sub-component contains all government controlled institutions that provide post-secondary education, apart from universities. Some institutions, such as colleges of applied arts and technology or Quebec's Collèges d'enseignement général et professionel (CEGEPs), offer a broad range of post-secondary programs, while others provide training in specific areas such as arts, forestry, or agriculture. Trade and vocational institutions, in general, provide programs which prepare the trainee for an occupation where the emphasis is on well defined procedures rather than on the theoretical application of ideas and principles. Training facilities in hospitals that provide post-secondary instruction, such as schools of nursing and other health science technologies are classified in the hospital sub-component. All colleges, vocational and trade institutions funded and controlled by government are non-market producing institutional units. They are classified in the public sector as a constituent of provincial and territorial government.

5.4.3 Health and social service institutions component

Provincial and territorial governments are responsible for health and social services within their jurisdiction by legislative authority of Constitution Acts from 1867 to 1982. Health and social service institutions are therefore a constituent of these governments. The health and social service institutions component contains all non-market producing institutional units operating as autonomous public health boards, social service organizations and community boards, and other health and social service organizations of provincial and territorial governments. For-profit, privately owned and operated health and social service institutions are not included in the public sector statistical universe.

5.4.3.1 Health boards sub-component

The health boards' sub-component contains all autonomous public health organizations responsible for administering, managing, delivering and funding health services, either directly or indirectly, within a specific geographic area. They have the authority to work with local health service providers to create a health care plan for their region, to determine priorities in providing health services, and to allocate resources to hospitals, continuing care facilities, community health services, and public health programs within their jurisdiction. They are required to report annually to their respective ministry or department of health to account for the use of public funds. Their consolidated financial statements usually contain all the units within their authority. They are non-market producing institutional units classified in the public sector as a constituent of provincial and territorial government. Health board services encompass these categories:

• hospitals, including any training facilities in hospitals such as schools of nursing or other health science technologies
• residential care facilities
• other health care facilities
• other health care services
• other services under the jurisdiction of the health board.

5.4.3.2 Social service organizations and community boards sub-component

The social service organizations and community boards sub-component contains all autonomous public social service organizations and community boards that have the authority to provide community level child and family services, social programs, and other support services directly or in collaboration with local organizations and community groups. They are non-market producing institutional units classified in the public sector as a constituent of provincial and territorial government.

5.4.3.3 Other health and social service organizations sub-component

The other health and social service organizations sub-component contains all other autonomous public health or social service institutions such as hospitals, residential care facilities, and other health and social service institutions that do not fall under the administrative authority of health boards or social service organizations and community boards. They are non-market producing institutional units classified in the public sector as a constituent of provincial and territorial government.

5.5 Local government sub-sector

The local government sub-sector contains all local governments and all the non-market producing units under their control. These entities are engaged in the creation and implementation of local government policy and the delivery of services within their jurisdiction. They are classified in the Canadian System of National Accounts (CSNA) – Classification of Institutional Units by Sector within this structure:

• local government sub-sector
  • local general government component
    • municipalities and other local public administrations sub-component
    • non-autonomous funds and organizations sub-component
    • autonomous funds and organizations sub-component
  • school boards component.

5.5.1 Local general government component

The local general government component contains all local non-market producing units that operate as municipalities, as well as their non-autonomous and autonomous funds and organizations. It also includes any other forms of local government administration that are empowered by provincial or territorial legislation to provide specific services to the public.

5.5.1.1 Municipalities and other local public administrations sub-component

The municipalities and other local public administrations sub-component contains all municipal governments and the non-market producing institutional units under their control that provide goods and services for the benefit of persons residing in a local area. They represent municipal administrations that are engaged in the creation and implementation of local government policy and/or in the delivery of services within their jurisdiction. They are non-market producing institutional units classified in the public sector as a constituent of local general government.

This sub-component also contains all other forms of local government administration that provincial and territorial governments have created to provide services within a geographical area. These entities may manage a locality in co-operation with neighbouring municipalities or they may perform their administrative functions entirely on their own. For the most part, these entities are not institutional units and therefore are classified as sub-units in the public sector. They are included to show the entities that comprise the local general government sub-sector.

5.5.1.2 Local non-autonomous general government funds and organizations sub-component

Local governments create entities that do not have the legal or the financial autonomy to function on their own. They are generically referred to as non-autonomous funds and organizations. These entities can be special purpose accounts, organizations or funds that do not meet institutional unit criteria. They do not maintain a complete and separate set of financial statements, do not own assets, cannot incur liabilities, nor act on their own behalf. However, they are directly controlled by a local government, operate within the budgetary framework of a municipal department, and are normally reported in the local government's consolidated financial statements. For example, these types of entities could provide municipally supported recreational or cultural services in the community. They are classified as sub-units in the public sector to show the elements of consolidation that comprise the local general government entity.

5.5.1.3 Local autonomous general government funds and organizations sub-component

Local autonomous general government funds and organizations are special purpose entities created by public administrations to deliver particular goods and/or services to the public, such as public libraries, conservation authorities and water treatment facilities. They are non-market producing institutional units classified in the public sector as a constituent of local general government.

5.5.2 School boards component

School boards are local education authorities created to administer local taxation and/or provincial grants on behalf of persons residing within a specific geographic area. They operate under authority delegated from the province or territory, in accordance with the Education Act of the province or territory where they are located. Their consolidated financial statements usually contain all the schools within their authority. They are non-market producing institutional units classified in the public sector as a constituent of local government. Exceptions do exist where elementary and secondary schools are controlled and administered by provincial and territorial departments of education and are thus consolidated in the public accounts of their respective government.

5.6 First Nations and other Aboriginal government sub-sector

Institutional units for the First Nations and other Aboriginal government sub-sector will be classified in the government sector of the public sector universe. This designation is not yet fully articulated as the transition of the First Nations and other Aboriginal people to more independent forms of government is still in process. However, during the interim, First Nations and other Aboriginal government institutional units are classified in a manner similar to provincial and territorial governments in the Canadian System of National Accounts (CSNA) – Classification of Institutional Units by Sector within this structure:

• First Nations and other Aboriginal government sub-sector
  • First Nations and other Aboriginal general government component
    • First Nations and other Aboriginal government sub-component
    • non-autonomous funds and organizations sub-component
    • autonomous funds and organizations sub-component
  • First Nations and other Aboriginal government school boards component
    • School boards sub-component
  • First Nations and other Aboriginal government universities and colleges component
    • Universities sub-component
    • Colleges, vocational and trade institutions sub-component
  • First Nations and other Aboriginal government health and social service institutions component
    • Health and social service institutions sub-component
      • hospitals
      • residential care facilities
      • other health care facilities
      • other health care services
    • Social service organizations and community boards' sub-component
    • Other health and social service organizations sub-component.