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.