Part C: The Federal Government’s Expenditures Breakdown of Expenditures The federal government’s expenditures can be divided into three key areas: 1) Transfer payments – 59% 2) Program expenses – 30% 3) Interest on our national debt – 11% Area 1: Transfers Transfers are payments that go directly to: a) persons – 25% b) provincial and territorial governments – 20% c) other organizations – 14% Transfer payments make up about 60% of this year’s budget. Transfers to Persons This is the largest category of transfers and includes: • Elderly benefits, like Old Age Security (OAS) Guaranteed Income Supplement (GIS), which helps seniors living on lower incomes (13%/$35.6 billion) • Employment Insurance (EI) benefits, which help Canadians who are looking for work (7%/$19.9 billion) • Children’s benefits, which help families with young children, such as the Canada Child Tax Benefit or Universal Child Care Benefit (5%/$12.7 billion) Transfers to Provinces/Territories Assist 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%/$26.0 billion) b) The Canada Social Transfer, which supports post-secondary education, social programs and services for children (4%/$11.2 billion) c) Equalization and Territorial Formula Financing programs, which address economic disparities so all Canadians can receive comparable public services (6%/$15.8 billion) Other Transfers The final group of transfers (14%) covers spending on federal grants, contributions and subsidies. This includes First Nations and Aboriginal peoples, farmers and food producers, foreign aid and other international assistance, support for research and development, infrastructure, regional development and assistance to businesses. Area 2: Program Expenses Includes the operating costs of the more than 130 federal bodies that provide programs and services for Canadians. These include government departments – such as Environment Canada and Aboriginal Affairs and Northern Development, as well as agencies and crown corporations like CBC television and Canada Post. This area makes up 30% of the federal government’s expenditures. Top 3 Departments/Agencies The three departments where the government spends the most the amount of money are: • National Defence (8%/$21.3 billion) • Public Safety (3%/$9.4 billion) • Canada Revenue Agency (3%/$7.3 billion) 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.