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Analysis
The consolidated surplus for all Canadian governments, including the two major pension plans, surpassed the $20 billion mark for the fourth consecutive year in the fiscal year ending March 31, 2008.
Canada's federal, provincial/territorial and local governments, as well as the Canada/Quebec Pension Plans, recorded a combined surplus of $28.1 billion in the fiscal year ended March 31, 2008. This was just short of the record surplus of $28.6 billion in 2001.
The consolidated government surplus was driven by large, continuing surpluses for the federal government and the Canada/Quebec Pension Plans, both of which hit record highs in fiscal year ending 2008. Revenues increased 5.1% between fiscal years 2007 and 2008, a slightly slower pace than the 5.5% growth in expenditures. The resulting consolidated surplus edged down $285 million dollars from fiscal year 2007.
Note to readers
In order to produce government finance data that are comparable across all jurisdictions, and across time, Statistics Canada applies a single set of accounting conventions to all jurisdictions. The Financial Management System (FMS) provides a standardized presentation of government accounting for the federal, provincial, territorial and local governments in Canada. The individual governments' accounting systems are not directly comparable because the policies and structure of governments differ.
The FMS adjusts data from government public accounts and other records to provide detailed data that permit inter-government comparisons as well as national aggregates that are consistent over time. As a result, FMS statistics may not accord with the figures published in government financial statements.
Consolidated government refers to the consolidation of the financial data for the federal government, the provincial and territorial governments, local governments (that is, municipal governments and school boards) and the Canada Pension Plan (CPP) and the Quebec Pension Plan (QPP). Consolidation is the aggregation of levels of governments after the elimination of transactions between levels of government.
General government refers to government entities created and controlled by federal, provincial, territorial and local governments. This covers all ministries, departments and agencies, autonomous organizations, boards, commissions and funds.
Transfer payments to other levels of government can be related to a wide variety of policy areas such as health, education, social services, etc., and can be categorized in two broad areas: general purpose, where transfers can be applied anywhere; and specific purpose, where the recipient government must use these transfer payments in the specific policy area.
Data for the federal government, CPP and QPP are for the fiscal years ending March 31. Data for the provincial and territorial governments are for the fiscal years ending closest to March 31, and data for local governments are for the fiscal years ending closest to December 31 of the previous year.
All the figures in this release are in current dollars.
Growth in revenues surpasses increase in spending during last five years
During the last five years, consolidated government revenues have grown at an annual average rate of 5.7%, compared with an annual average increase of 4.8% in expenditures.
The three main components of revenues are income taxes, consumption taxes and contributions to social insurance plans. Combined, these account for over 71% of total revenues in fiscal year 2008.
The growth in income tax revenues of 50.1% in the last five years has far surpassed the more modest revenue increase of 15.6% for consumption taxes and 20.5% for social insurance plans.
| All governments consolidated | 2003 | 2008 | 2003 to 2008 |
|---|---|---|---|
| millions of dollars | average annual % change | ||
| Revenue | |||
| Income taxes | 178,173 | 267,360 | 8.5 |
| Consumption taxes | 96,431 | 111,461 | 2.9 |
| Property and related taxes | 42,529 | 52,993 | 4.5 |
| Other taxes | 16,083 | 21,092 | 5.6 |
| Health insurance premiums | 3,000 | 3,424 | 2.7 |
| Contributions to social security plans | 63,489 | 76,505 | 3.8 |
| Sales of goods and services | 37,299 | 47,840 | 5.1 |
| Investment income | 34,838 | 51,074 | 8.0 |
| Other revenue from own sources | 9,570 | 3,916 | -16.4 |
| Total revenues | 481,412 | 635,664 | 5.7 |
| Expenditures | |||
| General government services | 17,520 | 21,110 | 3.8 |
| Protection of persons and property | 37,193 | 49,125 | 5.7 |
| Transportation and communication | 19,148 | 29,516 | 9.0 |
| Health | 83,315 | 115,358 | 6.7 |
| Social services | 145,398 | 183,278 | 4.7 |
| Education | 70,533 | 91,144 | 5.3 |
| Resource conservation and industrial development | 18,784 | 21,379 | 2.6 |
| Environment | 10,259 | 16,082 | 9.4 |
| Recreation and culture | 11,690 | 15,880 | 6.3 |
| Labour, employment and immigration | 3,395 | 2,590 | -5.3 |
| Housing | 3,624 | 4,575 | 4.8 |
| Foreign affairs and international assistance | 5,128 | 5,942 | 3.0 |
| Regional planning and development | 2,111 | 2,665 | 4.8 |
| Research establishments | 1,881 | 2,354 | 4.6 |
| Debt charges | 49,475 | 45,181 | -1.8 |
| Other expenditures | 1,463 | 1,410 | -0.7 |
| Total expenditures | 480,915 | 607,589 | 4.8 |
Spending on health, education and social services accounts for almost two-thirds of government expenditures
Expenditures on health, social services, education and debt charges continue to account for almost three-quarters of all spending for the fiscal year ending March 31, 2008. About 64% of total spending was attributable to health, education and social services.
While government expenditures have increased overall in fiscal year 2008, there were slight declines for debt charges and foreign affairs and international assistance spending.
Over the last five years, spending on social services grew at a steady pace. Spending rose 29% on education and 38% on health.
Debt charges were equal to 7.1 cents out of every dollar of government revenues in fiscal year 2008, compared with 7.6 cents in fiscal year 2007. This continued the downward trend that began 11 years ago.
Hence, debt charges as a percentage of total expenditures have fallen significantly in the latest five-year period, from 10.3% of expenditures in fiscal year 2003 to 7.4% in fiscal year 2008.
| 2004 | 2005 r | 2006 r | 2007 r | 2008 p | |
|---|---|---|---|---|---|
| millions of dollars | |||||
| Federal government | 2,126 | 5,117 | 9,541 | 7,369 | 13,761 |
| Consolidated provincial, territorial and local governments | |||||
| Newfoundland and Labrador | -346 | 22 | 341 | -380 | 424 |
| Provincial government | -341 | -16 | 334 | -374 | 393 |
| Local government | -5 | 38 | 7 | -6 | 31 |
| Prince Edward Island | -156 | 24 | -11 | 1 | -62 |
| Provincial government | -143 | 31 | 0 | 20 | -34 |
| Local government | -13 | -7 | -11 | -19 | -28 |
| Nova Scotia | 63 | 293 | 1,053 | -31 | 5 |
| Provincial government | 25 | 279 | 1,089 | 100 | 162 |
| Local government | 38 | 14 | -36 | -131 | -157 |
| New Brunswick | -101 | 128 | -109 | 6 | -592 |
| Provincial government | -69 | 170 | -84 | 46 | -554 |
| Local government | -32 | -42 | -25 | -40 | -38 |
| Quebec | -5,228 | -1,892 | -4,251 | -2,625 | -2,459 |
| Provincial government | -3,580 | -1,342 | -2,754 | -1,167 | -512 |
| Local government | -1,647 | -550 | -1,497 | -1,458 | -1,947 |
| Ontario | -5,308 | -1,386 | -2,752 | 360 | -419 |
| Provincial government | -6,479 | -1,586 | -3,514 | -1,214 | -1,012 |
| Local government | 1,172 | 200 | 763 | 1,574 | 593 |
| Manitoba | -136 | 520 | -20 | 261 | -149 |
| Provincial government | -211 | 460 | 21 | 161 | -39 |
| Local government | 75 | 60 | -41 | 100 | -110 |
| Saskatchewan | -254 | 784 | 741 | 802 | 752 |
| Provincial government | -149 | 918 | 796 | 912 | 900 |
| Local government | -105 | -134 | -55 | -110 | -148 |
| Alberta | 4,432 | 5,725 | 9,313 | 9,470 | 5,115 |
| Provincial government | 4,393 | 5,262 | 8,745 | 8,926 | 4,972 |
| Local government | 39 | 463 | 568 | 544 | 143 |
| British Columbia | -1,085 | 3,044 | 3,223 | 2,173 | 328 |
| Provincial government | -613 | 3,369 | 3,837 | 2,874 | 1,129 |
| Local government | -472 | -325 | -614 | -701 | -801 |
| Yukon Territory | -11 | -13 | 46 | 10 | -1 |
| Territorial government | -8 | -17 | 47 | 18 | 15 |
| Local government | -3 | 4 | -1 | -8 | -16 |
| Northwest Territories | -101 | -43 | -12 | 5 | -21 |
| Territorial government | -116 | -51 | -10 | 18 | -5 |
| Local government | 14 | 8 | -2 | -13 | -16 |
| Nunavut | -49 | -11 | 76 | 227 | -34 |
| Territorial government | -47 | -10 | 81 | 233 | -28 |
| Local government | -3 | -1 | -5 | -6 | -6 |
| Total | -8,282 | 7,195 | 7,639 | 10,277 | 2,886 |
| Canada and Quebec Pension Plans | |||||
| Canada Pension Plan | 8,032 | 7,739 | 7,879 | 8,913 | 9,800 |
| Quebec Pension Plan | 1,674 | 1,639 | 1,866 | 1,800 | 1,627 |
| Total | 9,706 | 9,378 | 9,745 | 10,713 | 11,427 |
| Total surplus (+) / deficit (-) | 3,550 | 21,689 | 26,925 | 28,360 | 28,075 |
Fourth year of surpluses for provincial, territorial and local governments on a consolidated basis
The fiscal year ending March 31, 2008, marked the fourth consecutive year of surplus for the combined provincial, territorial and local governments (which include municipalities and school boards). The consolidated surplus, however, was down $7.4 billion from the previous year.
Provincial and local governments in Newfoundland and Labrador, Nova Scotia, Saskatchewan, Alberta and British Columbia recorded surpluses on a consolidated basis in fiscal year 2008. However, those in Ontario and Quebec continued to have deficits.
The largest growth in revenue for these consolidated governments came from income taxes, which increased 7.5% in fiscal year 2008. Income taxes comprised 25% of total revenue and have increased 58.2% since fiscal year ending March 31, 2003. Investment income, which includes royalties, has risen by 47.2% over the last five years.
Consolidated provincial, territorial and local expenditures continue to be dominated by health and education, which accounted for over 50% of total expenditures in fiscal year 2008. The next largest outlay was for social services, which represented 15% of total spending.
Consolidated provincial, territorial and local debt charges have risen slightly in the last two years, representing 6.7 cents out of every dollar of government revenues in fiscal year 2008.
Local government spending continues to outstrip revenues
While the growth of revenue for local governments (which include municipalities and school boards) continued for the year ending December 31, 2007, spending increases outstripped revenue growth and was financed in part by increased borrowings. The $2.5-billion deficit represented 2.2% of total spending.
Over the last five years, revenue increased 27.2%, while expenditures grew 31.4%.
Transfer revenues from provincial and federal governments were the main source of revenue growth during this period, increasing $9.6 billion. Property and related tax revenues rose by $8.8 billion, while revenue from the sale of goods and services (mainly water and sewer services) was up $3.2 billion.
The largest percentage growth in expenditures occurred in environment, which saw a 67.7% increase, and in resource conservation and industrial development, with a 56.1% rise, over the same five-year period.
Data for local general government suggest spending in the modernization and renewal of local infrastructure has been fairly rapid. Spending on capital (roads, buildings, and general infrastructure) grew from $9.7 billion in 2002 to $18.1 billion in 2007. This was the highest level of capital expenditures since the beginning of the series in 1988.
For local general government, capital spending on resource conservation and industrial development rose 84%, while spending on transportation and communication was up 82%. Capital spending on environment (+124%) and on recreation and culture (+109%) more than doubled in the last five years.
