Allocators

Final consumption expenditure of government and non-profit institutions serving households (NPISH) must be distributed and allocated to corresponding HFCE consumption categories, for example education and health. Two main data sources are used to allocate the benchmarks.

Canadian government finance statistics - by classification of the function of government

Statistics Canada produces the Canadian government finance statistics program which is designed to measure and analyze the economic importance of the public sector of Canada. Government expenses can benefit individual households or the community at large and the data can be presented by their main socioeconomic functions according to the Canadian Classifications of Functions of Government (CCOFOG). The CCOFOG is used to classify government expenditure by function and is consistent with that proposed in the 2014 Government finance statistic manual (GFSM 2014). For simplicity, we will refer to this view of government finance statistics as CCOFOG.

The CCOFOG also allows us to differentiate between individual service (IS) and collective services (CS). An IS is acquired by a household and used to satisfy the needs or wants of members of that household. Individual goods and services are essentially “private” as distinct from “public” goods and services. Key examples of IS are education and health care. IS are equivalent to the STiK we want to capture in estimating HAFC. On the other hand, a CS is a service provided simultaneously to all members of the community or to all members of a particular section of the community, such as all households living in a particular region. An example of a CS is defense. The IS and CS detail from CCOFOG determines the portion of government expenditure that is individual in nature and benefit specific individuals or households. More details on CCOFOG and its aggregation can be found in the appendix.

The previously mentioned SNA concept of government final consumption expenditure (GFCE) should respect government finance statistics. However, since GFCE is not yet fully aligned with government finance statistics, a concordance to ensure GFCE respects government finance statistics concepts can address the issue until full consistency between programs is reached. In broad terms, GFCE consists of: compensation of employees, use of goods and services, consumption of fixed capital, social security benefits in kind, and social assistance benefits in kind. Government finance statistics on the other hand, consists of not only the expense items in GFCE, but also more. In addition, the use of goods and services in Government finance statistics is recorded on a gross basis. Fees and charges collected for goods and services provided by general government units, such as for certain types of social benefits or administrative services, such as the issuance of licenses and passports, are shown as revenue rather than deducted from expense. GFCE is reported net of the revenue from sales of goods and services. Hence the concordance also factors in the sales of goods and services from administration fees and incidental sales by nonmarket establishments. Transactions by quasi-corporations are not included since they are in the business sector. Only necessary concorded government finance expense items are used for this data source and are presented in the appendix.

Supply and use tables

The provincial and territorial supply and use tables (SUT) focuses on measuring the productive structure of the economy. We use the annual final demand data from 2008 to the latest available year for products from the NPISH sector to estimate the STiK from NPISH. SUT final demand categories for NPISH products are closely aligned with the internationally recognized classification of the purposes of non-profit institutions serving households (COPNI), which is also closely aligned with the household consumption categories. SUT data is used to derive distributions that will be applied to the benchmark NPISH expenditure. The SUT final demand categories that are used to generate a distribution of NPISH expenditure can be found in the appendix.