The Federal Government’s Expenditures

Breakdown of Expenditures

The federal government’s expenditures can be divided into three key areas:

1) Transfer payments

2) Program expenses

3) Interest on our national debt

Area 1: Transfers

Transfers are payments that go directly to:

a) Persons – 25%

b) Provincial and Territorial governments – 20%

c) Other organizations – 13%

Transfer payments make up nearly 60% of this year’s budget.

Transfers to PersonsThis is the largest category of transfers and includes:

• Elderly benefits, like Old Age Security (OAS) and the Guaranteed Income Supplement (GIS), which help seniors living on lower incomes (15%)

• Employment Insurance (EI) benefits, which help Canadians who are looking for work or are unable to work, such as persons who are injured or on parental leave (6%)

• Children’s benefits, which help families with young children, such as the Canada Child Tax Benefit and Universal Child Care Benefit (5%)

Transfers to Provinces/TerritoriesAssist in the major expenses of provincial and territorial governments and the delivery of programs for citizens.

a) The Canada Health Transfer, which provides long-term funding for health programs (10%)

b) The Canada Social Transfer, which supports post-secondary education, social programs and services for children (4%)

c) Equalization and Territorial Formula Financing programs, which address economic disparities so all Canadians can receive comparable public services (6%)

Other TransfersThe final group of transfers (13%) covers spending on federal grants, contributions and subsidies. • First Nations and Aboriginal peoples• Farmers and food producers• Foreign aid and other international assistance• Support for research and development• Infrastructure and regional development• Assistance to businesses.• Student assistance programs• Health research and promotion• The arts and amateur sports • Multiculturalism and bilingualism

Area 2: Program Expenses

Includes the operating costs of the more than 130 federal bodies (departments, agencies and crown corporations) that provide programs and services for Canadians. For example:– Environment Canada– Foreign Affairs, Trade and Development Canada– Canadian Heritage and Official Languages– Natural Resources– Citizenship and Immigration– Veteran Affairs– CBC

Program expenses makes up 30% of the budget.

Top 3 Departments/Agencies

The three departments where the government spends the most money are:

• National Defence which includes the armed forces, military equipment and space operations (8% of budget)

• Public Safety which includes border security, crime prevention and the correctional system (4%)

• Canada Revenue Agency which includes the collection of personal and business taxes, and distribution of child and family benefits (3%)

The operations of the other federal departments and agencies make up approximately 12%.

Crown Corporations

Crown corporations (businesses owned directly or indirectly by the government) make up 3% of the budget.

The largest spending corporations include the Canadian Commercial Corporation and Atomic Energy of Canada.

This category also includes money for cultural organizations like the National Art Gallery and enterprises like Canada Post, Via Rail and the CBC.

Paying for Parliament

One of the smallest spending areas is Parliament itself—the House of Commons, the Senate and the Library of Parliament.

The combination of salaries and benefits for Members of Parliament, Senators and parliamentary staff, as well as spending on facilities and services, is less than 0.25%.

Area 3: Interest

The final spending area is interest on the debt (11%).

We pay interest charges on the money borrowed by the federal government over the years and not yet repaid.

This year our interest payment will be about $30 billion.