Expenses

Public Accounts of Canada 2017 Volume I - Top of the page Navigation

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 in the year the transfer is authorized and all eligibility criteria have been met by the recipient. Public debt charges are recorded when incurred. They 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 reporting entity transact with each other on a day-to-day basis and thus contribute to the 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 a comparative summary of external expenses by type. The table also discloses the external expenses by segment.

Table 3.6
External expenses by segment and by type

(in millions of dollars)

  Major transfer paymentsLink to footnote 1 Other transfer payments Total transfer payments Other expenses Public debt chargesLink to footnote 3 Total expenses
2016–2017 2015–2016 2016–2017 2015–2016 2016–2017 2015–2016 2016–2017 2015–2016 2016–2017 2015–2016 2016–2017 2015–2016
Ministries
Agriculture and Agri-Food 1,567 1,289 1,567 1,289 1,436 951 3,003 2,240
Canadian Heritage 1,204 1,056 1,204 1,056 2,884 2,763 (negative 116) 4,088 3,703
Environment and Climate Change 170 135 170 135 1,632 1,506 1 1 1,803 1,642
Families, Children and Social Development 70,839 72,396 8,489 6,465 79,328 78,861 2,863 2,882 82,191 81,743
Finance 66,550 63,877 495 512 67,045 64,389 499 484 23,833 25,303 91,377 90,176
Fisheries, Oceans and the Canadian Coast Guard 99 94 99 94 1,935 1,544 2,034 1,638
Global Affairs 4,183 4,367 4,183 4,367 4,557 4,972 8,740 9,339
Health 3,229 2,985 3,229 2,985 3,519 3,340 6,748 6,325
Immigration, Refugees and Citizenship 1,177 1,083 1,177 1,083 1,127 1,138 2,304 2,221
Indigenous and Northern Affairs 9,474 7,843 9,474 7,843 2,961 1,408 12,435 9,251
Infrastructure and Communities 2,102 1,973 1,014 1,098 3,116 3,071 512 340 3,628 3,411
Innovation, Science and Economic Development 4,702 2,125 4,702 2,125 2,687 2,441 7,389 4,566
Justice 366 340 366 340 1,285 1,275 1,651 1,615
National Defence 153 152 153 152 25,576 28,519 84 88 25,813 28,759
National Revenue 20,099 10,509 3,540 3,701 23,639 14,210 7,165 7,989 30,804 22,199
Natural Resources 704 577 704 577 1,305 1,907 2 2 2,011 2,486
Office of the Governor General's Secretary 22 21 22 21
Parliament 1 1 1 1 627 570 628 571
Privy Council 1 105 1 105 307 566 308 671
Public Safety and Emergency Preparedness 894 620 894 620 10,574 10,375 1 1 11,469 10,996
Public Services and Procurement 4,269 4,186 146 158 4,415 4,344
Transport 311 529 311 529 1,922 2,611 42 6 2,275 3,146
Treasury Board 1 1 3,139 4,214 3,140 4,214
Veterans Affairs 24 18 24 18 929 911 953 929
Provision for valuation and other items (negative 218) (negative 221) (negative 218) (negative 221) 2,254 455 2,036 234
Total expensesLink to footnote 2 159,590 148,755 41,580 34,874 201,170 183,629 85,986 87,368 24,109 25,443 311,265 296,440

Expenses by segment

The Government's segmented information, which is based on the ministerial portfolio structure, groups the activities of departments, agencies and Crown corporations and other entities for which a Minister is responsible as described in Note 1 and Note 13 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 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 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 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 3.7
Major transfer payments by province and territory

(in millions of dollars)

  Fiscal year Old age security benefitsLink to footnote 4 Employment insurance 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 2016–2017 979 1,173 10 529 196 32 2,919
2015–2016 920 1,050 33 493 192 30 2,718
Prince Edward Island 2016–2017 240 258 381 148 55 16 1,098
2015–2016 227 247 361 139 53 15 1,042
Nova Scotia 2016–2017 1,571 906 1,768 946 350 56 5,597
2015–2016 1,492 889 1,817 900 341 53 5,492
New Brunswick 2016–2017 1,345 1,009 1,710 753 279 46 5,142
2015–2016 1,272 971 1,671 720 273 43 4,950
Quebec 2016–2017 13,365 4,078 10,036 (negative 4,451) 8,279 3,062 487 34,856
2015–2016 12,683 4,169 9,526 (negative 4,451) 7,880 2,987 458 33,252
Ontario 2016–2017 18,128 6,105 2,313 13,913 5,145 796 46,400
2015–2016 17,142 6,078 2,372 13,145 4,984 745 44,466
Manitoba 2016–2017 1,640 652 1,738 1,313 485 70 5,898
2015–2016 1,571 613 1,741 1,230 466 66 5,687
Saskatchewan 2016–2017 1,406 686 2 1,139 423 60 3,716
2015–2016 1,347 577 2 1,081 409 56 3,472
Alberta 2016–2017 3,983 3,399 5 4,187 1,558 222 13,354
2015–2016 3,729 2,474 256 3,869 1,516 209 12,053
British Columbia 2016–2017 6,722 2,346 4 4,732 1,751 269 15,824
2015–2016 6,399 2,257 4 4,450 1,695 253 15,058
Total provinces 2016–2017 49,379 20,612 17,967 (negative 4,451) 35,939 13,304 2,054 134,804
2015–2016 46,782 19,325 17,783 (negative 4,451) 33,907 12,916 1,928 128,190
Northwest Territories 2016–2017 29 36 1,220 45 16 16 1,362
2015–2016 26 34 1,233 44 16 15 1,368
Nunavut 2016–2017 10 24 1,489 36 14 16 1,589
2015–2016 9 20 1,454 36 13 15 1,547
Yukon Territory 2016–2017 29 31 894 37 14 16 1,021
2015–2016 28 31 874 38 14 15 1,000
International 2016–2017 238 8 246
2015–2016 157 9 166
Total expenses for provinces and territories 2016–2017 49,685 20,711 21,570 (negative 4,451) 36,057 13,348 2,102 139,022
2015–2016 47,002 19,419 21,344 (negative 4,451) 34,025 12,959 1,973 132,271
Accrual and other adjustments 2016–2017 (negative 1,523) 26 (negative 1,497)
2015–2016 (negative 1,541) (negative 1,541)
Subtotal 2016–2017 48,162 20,711 21,596 (negative 4,451) 36,057 13,348 2,102 137,525
2015–2016 45,461 19,419 21,344 (negative 4,451) 34,025 12,959 1,973 130,730
Transfers made through the tax system 2016–2017 22,065 22,065
2015–2016 18,025 18,025
Total major transfer payments 2016–2017 48,162 20,711 21,596 (negative 4,451) 36,057 13,348 2,102 22,065 159,590
2015–2016 45,461 19,419 21,344 (negative 4,451) 34,025 12,959 1,973 18,025 148,755

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 in Section 6 of Volume II of the Public Accounts of Canada and the total expenses of the public debt indicated in Table 3.6 of this volume. The reconciling items include the interest expenses on capital leases as well as accrual and other adjustments.

Table 3.8
Public debt charges
Link to footnote 7
(in millions of dollars)

  2016–2017 2015–2016
Unmatured debt
Interest on:
Marketable bonds 12,460 13,160
Retail debt 45 34
Medium-term notes 22 9
Subtotal 12,527 13,203
Amortization of discounts on Canada and Treasury bills
Treasury bills 737 861
Canada bills 28 10
Subtotal 765 871
Amortization of premiums and discounts on all other debts
Marketable bonds 203 632
Foreign bonds 6 6
Real return bonds (negative 136) (negative 106)
Consumer price index adjustments on real return bonds 1,098 971
Subtotal 1,171 1,503
Cross-currency swap revaluation (negative 335) (negative 487)
Servicing costs and costs of issuing new borrowings 10 11
Capital lease obligations 200 209
Other unmatured debt 82 83
Total public debt charges related to unmatured debt 14,420 15,393
Pensions and other future benefits
Interest on:
Public sector pensions—Superannuation accounts 6,817 7,333
Less: allowance for pension adjustments 26 122
Consolidated Crown corporations and other entities pensions (negative 144) (negative 161)
Subtotal 6,699 7,294
Other employee and veteran future benefits
Public Service Health Care Plan and Pensioners' Dental Service Plan 801 729
Severance and other benefits 72 80
Accumulated sick leave entitlements 40 39
Worker's compensation 32 32
Veterans' disability and other future benefits 1,587 1,442
Royal Canadian Mounted Police disability and other future benefits 242 218
Consolidated Crown corporations and other entities 9 9
Subtotal 2,783 2,549
Total public debt charges related to pensions and other future benefits 9,482 9,843
Other liabilities
Canada Pension Plan 1 2
Government Annuities Account 8 9
Deposit and trust accounts 16 19
Other specified purpose accounts 165 171
Other liabilities 17 6
Total public debt charges related to other liabilities 207 207
Consolidated specified purpose accounts
Interest 3 3
Total public debt charges related to consolidated specified purpose accounts 3 3
Total public debt charges before consolidation adjustments 24,112 25,446
Less: consolidation adjustments 3 3
Total public debt chargesLink to footnote 7Link to footnote 8 24,109 25,443
Comprised of:
Total public debt charges under statutory authorities before accrual and other adjustments and consolidation adjustments 21,165 22,644
Accrual and other adjustments 2,947 2,802
Consolidation adjustments (negative 3) (negative 3)
Total public debt charges 24,109 25,443

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 3.9
Total expenses by object
Link to footnote 9
(in millions of dollars)

  Total net expenditures Reconciliation Total expenses
Transfer payments 156,108 45,062 201,170
Other expenses
Personnel 38,910 11,198 50,108
Transportation and communications 2,834 (negative 64) 2,770
Information 300 (negative 22) 278
Professional and special services 11,910 (negative 2,208) 9,702
Rentals 3,167 (negative 874) 2,293
Repair and maintenance 3,388 (negative 54) 3,334
Utilities, materials and supplies 2,846 283 3,129
Acquisition of land, buildings and works 2,274 (negative 2,274)
Acquisition of machinery and equipment 3,953 (negative 3,953)
Other subsidies and expenses 10,780 (negative 1,733) 9,047
Amortization of tangible capital assets 5,168 5,168
Net loss on disposal of assets 157 157
Total other expenses 80,362 5,624 85,986
Public debt charges 21,166 2,943 24,109
Total gross expenses 257,636 53,629 311,265
Revenues netted against expenditures (negative 11,681) 11,681
Total expenses 245,955 65,310 311,265

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 approximately half of the total program expenses each year.

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

Table 3.10
Expenditures under statutory authorities

(in millions of dollars)

  2016–2017 2015–2016
Old age security payments (Old Age Security Act) 36,749 35,050
Canada health transfer (Part V.1—Federal-Provincial Fiscal Arrangements Act) 36,058 34,025
Public debt charges 21,166 22,644
Fiscal equalization (Part I—Federal-Provincial Fiscal Arrangements Act) 17,880 17,341
Canada social transfer (Part V.1—Federal-Provincial Fiscal Arrangements Act) 13,348 12,959
Guaranteed income supplement payments (Old Age Security Act) 10,922 9,922
Territorial financing (Part I.1—Federal-Provincial Fiscal Arrangements Act) 3,603 3,561
Gas Tax Fund 2,100 2,000
Universal child care benefit (Universal Child Care Benefit Act) 1,976 8,759
Canada study grants to qualifying full and part-time students pursuant to the Canada Student Financial Assistance Act 975 714
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 859 821
Contribution payments for the AgriInsurance program 702 604
Payments related to the direct financing arrangement under the Canada Student Financial Assistance Act 662 618
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 535 533
Old age allowance payments (Old Age Security Act) 530 513
Payments to the Newfoundland Offshore Petroleum Resource Revenues Fund 455 301
Payments to International Development Association 442 442
Electoral expenditures 70 451
Youth allowances recovery (Federal-Provincial Fiscal Revision Act, 1964) (negative 805) (negative 811)
Alternative payments for standing programs (Part VI—Federal-Provincial Fiscal Arrangements Act) (negative 3,646) (negative 3,641)
Total 144,581 146,806
Superannuation, supplementary retirement benefits, death benefits and other pensionsLink to footnote 10
Public Service
Government's contributions to the public service pension plan and the Retirement Compensation Arrangements Account 2,518 3,439
Government's contributions to the Canada and the Quebec pension plans 701 665
Government's contribution to the Employment Insurance Operating Account 308 311
Government's contributions to the Death Benefit Account 14 14
Total contributions 3,541 4,429
Recoveries from revolving funds (negative 91)
Total 3,541 4,338
Canadian Forces
Government's contribution to the Canadian Forces Pension Plan and the Retirement Compensation Arrangements Account 947 1,000
Government's contribution to the Canada and the Quebec pension plans 186 184
Government's contribution as employer to the Employment Insurance Operating Account 80 84
Statutory payments under the Supplementary Retirement Benefits Act 2 2
Government's contribution to the Death Benefit Account 3 2
Total 1,218 1,272
Royal Canadian Mounted Police
Government's contribution to the Royal Canadian Mounted Police Pension Plan and the Retirement Compensation Arrangements Account 491 353
Government's contribution to the Canada and the Quebec pension plans 58 59
Government's contribution as employer to the Employment Insurance Operating Account 25 27
Statutory payments under the Supplementary Retirement Benefits Act 7 8
Total 581 447
Shared Services Canada
Government's contribution to the Canada and the Quebec pension plans 3 3
Government's contribution to the Employment Insurance Operation Account, the Royal Canadian Mounted Police Pension Plan and the Retirement Compensation Arrangements Account 1 1
Total 4 4
All other statutory expenditures 3,281 3,363
Total ministerial expenditures under statutory authoritiesLink to footnote 11 153,206 156,230

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