Expenses

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Expenses consist of all charges which enter into the calculation of the annual deficit or surplus of the Government.

Accounting for Expenses

The Government reports all expenses on an accrual basis.

Expenses for Government operations are recorded when goods are received or services are rendered. Transfer payments are recorded as expenses when the recipients have met all the eligibility criteria and the transfers are authorized by the consolidated financial statements date. In the case of transfers that do not form part of an existing program, they are considered to be authorized when the Government announces a decision to make a non‑recurring transfer, provided the enabling legislation or authorization for payment receives parliamentary approval prior to the completion of the consolidated financial statements. Public debt charges are recorded when incurred and include interest, servicing costs, costs of issuing new borrowings, amortization of premiums and discounts on market debt, as well as interest on public sector pensions and other employee and veteran future benefits.

Expenses include provisions to reflect changes in the value of assets or liabilities, including provisions for bad debts, for loans, investments and advances, as well as for inventory obsolescence. Expenses also include amortization of tangible capital assets, utilization of inventories, as well as prepaid expenses and other.

Organizations within the Government's accounting entity transact with each other on a day‑to‑day basis and thus contribute to the amounts of revenues and expenses recorded in the accounts. In preparing the consolidated financial statements, these “internal transactions” are eliminated so as to report on the basis of transactions with outside parties only.

Table 3.6 presents external expenses by segment and by type.

Table Summary

The table presents, in millions of dollars, a two‑year comparative of external expenses by segment and by type. It consists of seven columns: a detailed listing of components; Major transfer payments; Other transfer payments; Total transfer payments; Other program expenses; Public debt charges; Total expenses. The six last columns are divided into two columns — current year, and previous year. The first series of rows presents the ministries. The following row presents the Crown corporations and other entities. A final row presents the total for this table.

(in millions of dollars)

Table 3.6
External Expenses by Segment and by Type

  Major transfer paymentsLink to footnote 1 Other transfer payments Total transfer payments Other program expenses Public debt chargesLink to footnote 2 Total expenses
2014–2015 2013–2014 2014–2015 2013–2014 2014–2015 2013–2014 2014–2015 2013–2014 2014–2015 2013–2014 2014–2015 2013–2014
Ministries —                        
Agriculture and Agri‑Food     1,290 1,536 1,290 1,536 791 896     2,081 2,432
Atlantic Canada Opportunities Agency     155 180 155 180 82 73     237 253
Canada Revenue Agency 10,372 10,402 3,350 3,362 13,722 13,764 8,108 7,841     21,830 21,605
Canadian Heritage     1,267 1,130 1,267 1,130 527 506     1,794 1,636
Canadian Northern Economic Development Agency     34 36 34 36 15 13     49 49
Citizenship and Immigration     984 953 984 953 1,061 1,009     2,045 1,962
Economic Development Agency of Canada for the Regions of Quebec     105 137 105 137 74 60     179 197
Employment and Social Development 66,086 61,820 6,311 6,322 72,397 68,142 2,646 3,110     75,043 71,252
Environment     116 94 116 94 1,541 1,549 1 1 1,658 1,644
Finance 61,136 58,369 920 1,100 62,056 59,469 511 530 26,325 27,991 88,892 87,990
Fisheries and Oceans     90 85 90 85 1,581 1,670     1,671 1,755
Foreign Affairs, Trade and Development     4,039 3,913 4,039 3,913 2,087 2,034     6,126 5,947
Health     2,932 2,818 2,932 2,818 3,313 3,376     6,245 6,194
Indian Affairs and Northern Development     7,576 6,152 7,576 6,152 1,204 642     8,780 6,794
Industry     2,244 2,605 2,244 2,605 2,151 2,054     4,395 4,659
Justice     345 339 345 339 1,280 1,253     1,625 1,592
National Defence     136 159 136 159 23,669 21,511 68 26 23,873 21,696
Natural Resources     1,184 1,176 1,184 1,176 1,067 1,010 2 3 2,253 2,189
Office of Infrastructure of Canada 1,973 2,106 983 1,355 2,956 3,461 64 50     3,020 3,511
Office of the Governor General's Secretary             20 20     20 20
Parliament     1 1 1 1 542 534     543 535
Privy Council Office     9 16 9 16 313 277     322 293
Public Safety and Emergency Preparedness     204 2,097 204 2,097 9,831 9,773 1 1 10,036 11,871
Public Works and Government Services             4,267 4,181 156 156 4,423 4,337
Transport     593 464 593 464 919 844 41 42 1,553 1,350
Treasury Board             3,277 2,947     3,277 2,947
Veterans Affairs     18 15 18 15 1,000 882     1,018 897
Western Economic Diversification     106 137 106 137 41 45     147 182
Provision for valuation and other items     (negative 353)   (negative 353)   (negative 604) 2,875     (negative 957) 2,875
Total ministries 139,567 132,697 34,639 36,182 174,206 168,879 71,378 71,565 26,594 28,220 272,178 268,664
Crown corporations and other entities     487 516 487 516 7,770 7,647     8,257 8,163
Total expensesLink to footnote 3 139,567 132,697 35,126 36,698 174,693 169,395 79,148 79,212 26,594 28,220 280,435 276,827

Expenses by Segment

The Government's segmented information, which is based on the ministerial portfolio structure, groups together departments and agencies' activities for which a Minister is responsible as well as those of the Crown corporations and other entities as described in Note 12 to the consolidated financial statements in Section 2 of this volume.

Government's Cost of Operations

Government's Cost of Operations consists of three major types: transfer payments, other program expenses and public debt charges.

Transfer payments

The major transfer payments include payments to persons and payments to provinces and territories.

Payments to persons include payments for income support or income supplement. Assistance is based on age, family status, income, and employment criteria.

Payments to provinces and territories are made under the following programs:

  • The fiscal arrangements are unconditional fiscal transfer payments to lower income provinces including subsidies under the Constitution Acts; and
  • The Canada health transfer and the Canada social transfer are the major means for providing the federal share of social programs administered by the provinces.

The other transfer payments include various subsidies paid through federal programs to stabilize market prices for commodities, to develop new technologies, to conduct research, to establish new jobs through support for training and to promote educational and cultural activities. Also included are expenses of other consolidated entities and other miscellaneous payments.

Other program expenses

This category covers the costs associated with programs directly delivered by the federal government such as national defence, food inspection, the Coast Guard, the federal court system, the operation of health facilities for natives and veterans, and the national parks system. It also includes the expenses of consolidated Crown corporations and other entities incurred with third parties.

Table 3.7 presents a comparative analysis by province and territory of certain transfer payments.

Table Summary

The table presents, in millions of dollars, a two‑year comparative of certain transfer payments by province and territory. It consists of eleven columns: a detailed listing of components; Fiscal Year; Old age security benefits; Employment insurance benefits; Fiscal arrangements; Quebec abatement; Canada health transfer; Canada social transfer; Other major transfers; Children's benefits; Total. All rows are split into two by transfer payments — current year, previous year. A final row presents the total for this table.

(in millions of dollars)

Table 3.7
Major Transfer Payments by Province and Territory

  Fiscal year Old age security benefitsLink to footnote 4 Employment insurance benefits Fiscal arrangements Quebec abatementLink to footnote 5 Canada health transfer Canada social transfer Other major transfersLink to footnote 6 Children's benefits Total
Newfoundland and Labrador 2014–2015 882 975 2   493 187 30   2,569
2013–2014 842 976 2   525 189 31   2,565
Prince Edward Island 2014–2015 218 231 360   134 52 50   1,045
2013–2014 208 229 340   128 50 29   984
Nova Scotia 2014–2015 1,442 839 1,817   860 335 53   5,346
2013–2014 1,375 816 1,810   840 327 84   5,252
New Brunswick 2014–2015 1,220 927 1,668   687 267 89   4,858
2013–2014 1,162 892 1,564   683 264 111   4,676
Quebec 2014–2015 12,195 4,156 9,395 (negative 4,234) 7,477 2,908 458   32,355
2013–2014 11,630 3,954 7,839 (negative 4,223) 7,410 2,854 1,931   31,395
Ontario 2014–2015 16,627 5,959 1,997   12,459 4,847 745   42,634
2013–2014 15,686 5,835 3,178   11,956 4,689 747   42,091
Manitoba 2014–2015 1,539 563 1,753   1,167 454 66   5,542
2013–2014 1,468 534 1,802   1,099 435 66   5,404
Saskatchewan 2014–2015 1,336 486 2   998 398 130   3,350
2013–2014 1,279 446 2   968 389 56   3,140
Alberta 2014–2015 3,611 1,663 5   3,478 1,452 209   10,418
2013–2014 3,394 1,492 5   2,804 1,406 200   9,301
British Columbia 2014–2015 6,193 2,156 4   4,249 1,641 253   14,496
2013–2014 5,796 2,024 4   4,043 1,571 (negative 69)   13,369
Total provinces 2014–2015 45,263 17,955 17,003 (negative 4,234) 32,002 12,541 2,083   122,613
2013–2014 42,840 17,198 16,546 (negative 4,223) 30,456 12,174 3,186   118,177
Northwest Territories 2014–2015 25 35 1,209   47 15 15   1,346
2013–2014 24 34 1,121   22 15 15   1,231
Nunavut 2014–2015 9 22 1,409   33 13 15   1,501
2013–2014 10 21 1,350   35 13 15   1,444
Yukon Territory 2014–2015 27 31 851   32 13 29   983
2013–2014 27 34 816   30 13 52   972
International 2014–2015 259 9             268
2013–2014 255 13             268
Total expenses for provinces and territories 2014–2015 45,583 18,052 20,472 (negative 4,234) 32,114 12,582 2,142   126,711
2013–2014 43,156 17,300 19,833 (negative 4,223) 30,543 12,215 3,268   122,092
Accrual and other adjustments 2014–2015 (negative 1,480)   33           (negative 1,447)
2013–2014 (negative 1,370)           (negative 1,161)   (negative 2,531)
Subtotal 2014–2015 44,103 18,052 20,505 (negative 4,234) 32,114 12,582 2,142   125,264
2013–2014 41,786 17,300 19,833 (negative 4,223) 30,543 12,215 2,107   119,561
Add: transfers made through the tax system 2014–2015               14,303 14,303
2013–2014               13,136 13,136
Total major transfer payments 2014–2015 44,103 18,052 20,505 (negative 4,234) 32,114 12,582 2,142 14,303 139,567
2013–2014 41,786 17,300 19,833 (negative 4,223) 30,543 12,215 2,107 13,136 132,697

Public debt charges

Public debt charges include the interest on unmatured debt and on pensions, other future benefits and other liabilities, the amortization of premiums and discounts on unmatured debt, and the servicing costs and the costs of issuing new borrowings.

A comparative summary of public debt charges is presented in Table 3.8. The table also discloses the reconciling items between total public debt charges as reported in the ministerial section of the Department of Finance (Section 11) of Volume II of the Public Accounts of Canada and the total expenses of the public debt indicated in Table 3.6. The reconciling items include the interest expenses on capital leases as well as accrual and other adjustments.

Table Summary

The table presents, in millions of dollars, a two‑year comparative of public debt charges. It consists of three columns: a detailed listing of components; current year; previous year. The first series of rows presents unmatured debt subdivided into four sections, each with a subtotal and a row that presents the total for the series. The second series of rows presents pensions and other future benefits subdivided into two sections, each with a subtotal and a row that presents the total for the series. The third series of rows presents other liabilities and a row for the total of this series. The fourth series of rows presents consolidated specified purpose accounts and a row for the total of this series. The fifth series of rows presents public debt charges and a row for the total of this series. The sixth series of rows presents various applicable adjustments. A final row presents the total for this table.

(in millions of dollars)

Table 3.8
Public debt chargesLink to footnote 7

  2014–2015 2013–2014
Unmatured debt —    
Interest on:    
Marketable bonds 13,562 14,060
Retail debt 47 59
Medium‑term notes 5 1
Subtotal 13,614 14,120
Amortization of discounts on Canada and Treasury Bills    
Treasury bills 1,418 1,816
Canada bills 2 2
Subtotal 1,420 1,818
Amortization of premiums and discounts on all other debts    
Marketable bonds 405 345
Consumer price index adjustments on real return bonds 436 629
Subtotal 841 974
Cross‑currency swap revaluation (negative 542) (negative 495)
Servicing costs and costs of issuing new borrowings 19 11
Capital lease obligations 209 214
Other unmatured debt 60 14
Total public debt charges related to unmatured debt 15,621 16,656
Pensions and other future benefits —    
Interest on:    
Public sector pensions — Superannuation accounts 7,906 8,341
Less: provision for pension adjustment (negative 4) 358
Subtotal 7,902 8,699
Other employee and veteran future benefits —    
Public Service Health Care Plan and Pensioners' Dental Service Plan 777 858
Severance and other benefits 93 117
Accumulated sick leave entitlements 48 39
Worker's compensation 39 29
Veterans' disability and other future benefits 1,656 1,411
Royal Canadian Mounted Police disability and other future benefits 233 175
Subtotal 2,846 2,629
Total public debt charges related to pensions and other future benefits 10,748 11,328
Other liabilities —    
Canada Pension Plan 3 3
Government Annuities Account 11 12
Deposit and trust accounts 25 29
Other specified purpose accounts 179 183
Other liabilities 7 9
Total public debt charges related to other liabilities 225 236
Consolidated specified purpose accounts —    
Interest 5 7
Total public debt charges related to consolidated specified purpose accounts 5 7
Total public debt charges before consolidation adjustments 26,599 28,227
Less: consolidation adjustments 5 7
Total public debt chargesLink to footnote 7Link to footnote 8 26,594 28,220
Comprised of:    
Total public debt charges under statutory authorities before accrual and other adjustments and consolidation adjustments 23,488 25,012
Accrual and other adjustments 3,111 3,215
Consolidation adjustments (negative 5) (negative 7)
Total public debt charges 26,594 28,220

Expenses by Object

Table 3.9 reconciles the total net expenditures by object initially recorded by departments under the partial accrual method of accounting to the total expenses which is based on the full accrual method of accounting. Reconciliation items represent the effect of consolidation and full accrual accounting.

Table Summary

The table presents, in millions of dollars, the effect of consolidation and full accrual accounting on the total expenses by object. It consists of four columns: a detailed listing of components; Total net expenditures; Reconciliation; Total expenses. The first row presents transfer payments. The next series of rows presents other program expenses. The following rows present public debt charges, total gross expenses and revenues netted against expenditures. A final row presents the total for this table.

(in millions of dollars)

Table 3.9
Total Expenses by ObjectLink to footnote 9

  Total net expenditures Reconciliation Total expenses
Transfer payments 142,212 32,481 174,693
Other program expenses —      
Crown corporationsLink to footnote 10   7,162 7,162
Personnel 39,056 4,755 43,811
Transportation and communications 2,536 (negative 114) 2,422
Information 302 (negative 70) 232
Professional and special services 10,666 (negative 2,576) 8,090
Rentals 3,003 (negative 1,024) 1,979
Repair and maintenance 2,655 (negative 343) 2,312
Utilities, materials and supplies 2,845 (negative 331) 2,514
Acquisition of land, buildings and works 1,662 (negative 1,662)  
Acquisition of machinery and equipment 3,811 (negative 3,811)  
Other subsidies and expenses 9,466 (negative 4,031) 5,435
Amortization of tangible capital assets   5,090 5,090
Net loss on disposal of assets   101 101
Total other program expenses 76,002 3,146 79,148
Public debt charges 23,488 3,106 26,594
Total gross expenses 241,702 38,733 280,435
Less: revenues netted against expenditures 10,561 (negative 10,561)  
Total expenses 231,141 49,294 280,435

Expenditures under Statutory Authorities

Spending authorities provided by statutory authorities are for specified purposes and for such amounts and such time periods as the acts prescribe. These spending authorities do not generally lapse at the end of the year during which they were granted. Expenditures under such authorities account for approximatively half of the total program expenses each year.

Table 3.10 presents a comparative summary of the ministerial expenditures under statutory authorities.

Table Summary

The table presents, in millions of dollars, a two‑year comparative summary of the ministerial expenditures under statutory authorities. It consists of three columns: a detailed listing of components; current year; previous year. The first series of rows presents a detailed listing of statutory authorities. The second series of rows presents superannuation, supplementary retirement benefits, death benefits and other pensions divided into five sections: Public Service; Canadian Forces; Royal Canadian Mounted Police; Shared Services Canada; and All other statutory expenditures. A final row presents the total ministerial expenditures under statutory authorities.

(in millions of dollars)

Table 3.10
Expenditures under Statutory Authorities

  2014–2015 2013–2014
Old age security payments (Old Age Security Act) 33,536 31,911
Canada health transfer (Part V.1 — Federal‑Provincial Fiscal Arrangements Act) 32,114 30,533
Public debt charges 23,488 25,012
Fiscal equalization (Part I — Federal‑Provincial Fiscal Arrangements Act) 16,669 16,105
Canada social transfer (Part V.1 — Federal‑Provincial Fiscal Arrangements Act) 12,582 12,215
Guaranteed income supplement payments (Old Age Security Act) 10,066 9,373
Territorial financing (Part I.1 — Federal‑Provincial Fiscal Arrangements Act) 3,469 3,288
Universal child care benefit (Universal Child Care Benefit Act) 2,738 2,740
Gas Tax Fund 2,000  
Payments to International Development Association 883 442
Canada Education Savings grant payments to Registered Education Savings Plans (RESPs) trustees on behalf of RESP beneficiaries to encourage Canadians to save for post‑secondary education for their children 781 760
Payments to the Newfoundland Offshore Petroleum Resource Revenues Fund 752 732
Canada study grants to qualifying full and part‑time students pursuant to the Canada Student Financial Assistance Act 707 725
Payments related to the direct financing arrangement under the Canada Student Financial Assistance Act 631 558
Contribution payments for the AgriInsurance program 611 751
Allowance payments (Old Age Security Act) 531 528
Judges' salaries, allowances and annuities, annuities to spouses and children of judges and lump sum payments to spouses of judges who die while in office 506 490
Youth allowances recovery (Federal‑Provincial Fiscal Revision Act, 1964) (negative 767) (negative 763)
Alternative payments for standing programs (Part VI — Federal‑Provincial Fiscal Arrangements Act) (negative 3,467) (negative 3,460)
Total 137,830 131,940
Superannuation, supplementary retirement benefits, death benefits and other pensionsLink to footnote 11 —    
Public Service —    
Government's contributions to the public service pension plan and the Retirement Compensation Arrangements Account 2,875 3,062
Government's contributions to the Canada and the Quebec Pension Plans 641 620
Government's contribution to the Employment Insurance Operating Account 295 285
Government's contributions to the Death Benefit Account 14 14
Total Contributions 3,825 3,981
Less: recoveries from revolving funds 94 106
Total 3,731 3,875
Canadian Forces —    
Government's contribution to the Canadian Forces pension plan and the Retirement Compensation Arrangements Account 1,064 1,133
Government's contribution to the Canada and the Quebec Pension Plans 178 187
Government's contribution as employer to the Employment Insurance Operating Account 82 85
Statutory payments under the Supplementary Retirement Benefits Act 2 3
Government's contribution to the Death Benefit Account 3 3
Total 1,329 1,411
Royal Canadian Mounted Police —    
Government's contribution to the Royal Canadian Mounted Police pension plan and the Retirement Compensation Arrangements Account 361 372
Government's contribution to the Canada and the Quebec Pension Plans 55 52
Government's contribution as employer to the Employment Insurance Operating Account 21 23
Statutory payments under the Supplementary Retirement Benefits Act 8 9
Total 445 456
Shared Services Canada —    
Government's contribution to the Employment Insurance Operation Account, the Royal Canadian Mounted Police pension plan and the Retirement Compensation Arrangements Account 1 5
Government's contribution to the Canada and the Quebec Pension Plans 4 1
Total 5 6
All other statutory expenditures 3,640 5,392
Total ministerial expenditures under statutory authoritiesLink to footnote 12 146,980 143,080

Footnotes

Footnote 1

Includes transfer payments of $44,103 million ($41,786 million in 2014) for the Old Age security benefits, the guaranteed income supplement and the spouse's allowance; $63,109 million ($60,475 million in 2014) to other levels of government; $18,052 million ($17,300 million in 2014) for the Employment insurance benefits and $14,303 million ($13,136 million in 2014) for the Children's benefits. Additional information is provided in Table 3.7 of this Section.

Return to footnote 1 referrer

Footnote 2

Additional information is provided in Table 3.8 of this volume.

Return to footnote 2 referrer

Footnote 3

Additional information is provided in Table 2a in Section 1 of Volume II of the Public Accounts of Canada.

Return to footnote 3 referrer

Footnote 4

Includes the guaranteed income supplement and the spouse's allowance.

Return to footnote 4 referrer

Footnote 5

The Quebec Abatement is comprised of federal tax abated under the Alternative Payments for Standing Programs and the Youth Allowance Program of that province.

Return to footnote 5 referrer

Footnote 6

Includes the contributions under the federal Gas Tax Fund program of $1,973 million ($2,107 million in 2014).

Return to footnote 6 referrer

Footnote 7

A summary is provided in Table 2a in Section 1 of Volume II of the Public Accounts of Canada.

Return to footnote 7 referrer

Footnote 8

Additional details are provided in Section 7 of Volume III of the Public Accounts of Canada.

Return to footnote 8 referrer

Footnote 9

Additional details are provided in Table 3a in Section 1 of Volume II of the Public Accounts of Canada.

Return to footnote 9 referrer

Footnote 10

This amount differs from the expense shown on the Consolidated Statement of Operations and Accumulated Deficit due to the amortization of tangible capital assets and the net loss on disposal of assets of consolidated Crown corporations, reclassified within their respective object of expense.

Return to footnote 10 referrer

Footnote 11

Details related to other pension accounts, such as the Members of Parliament Retiring Allowances Account, are not included.

Return to footnote 11 referrer

Footnote 12

Additional information on the ministerial expenditures under statutory authorities are provided in Table 7 in Section 1 of Volume II of the Public Accounts of Canada.

Return to footnote 12 referrer

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