Public Finance

EXPENDITURES BY FUNCTION

When compared with total expenditures, expenditures by function of provincial and local administrations are a significant indicator of the agenda set by various levels of government in Canada. Furthermore, when expenditures by function are correlated to gross domestic product (GDP), they provide an indication of the outlays of provincial and local administrations in relation to the total wealth produced on their territory.

In terms of methodology, the data shown cover, for year 2009, all the institutional units that are controlled and mainly financed by provincial and local administrations, with the exception of Crown corporations (i.e., government enterprises). The data thus include all ministries and agencies, non autonomous funds and organizations, universities and colleges, health and social service institutions and school boards and municipalities. Aside from the two major functions represented by education, on the one hand, and by social services and health, on the other, the table presents the expenditures made in relation to other functions, which include the following: resource conservation and industrial development; environment; recreation and culture; and debt charges.

The great majority of responsibilities relating to education, social services and health are assumed by provincial governments. All the same, the federal government contributes financially to these main functions through transfer payments made to the provincial authorities. That being said, the latter maintain their prerogative of allocating the amounts received in accordance with their set of priorities.

Concerning the other functions, the distribution of responsibilities varies across the various levels of government. For example, in the area of recreation and culture, responsibilities are shared between the federal, provincial and local administrations. In most cases, however, the other functions are assumed by federal and provincial governments. The expenditures of provincial and local administrations have been grouped together so as to lessen the impact that the sharing of responsibilities between provincial governments and municipalities can produce on expenditures by function.

Expenditures by function of provincial and local administrations (current dollars) as % of GDP and % of total expenditures, 2009
 

 

Social services and health

Education

 Other functions

$M 

% GDP

% TE

$M

% GDP

% TE

$M

% GDP

% TE

NFL

2 986

12.0

41.9

1 535

6.1

21.6

2 599

10.4

36.5

PEI

621

13.1

37.2

409

8.6

24.5

640

13.5

38.3

NS

4 503 

13.1

40.0

2 777

8.1

24.7

3 978

11.6

35.3

NB

4 136 

15.0

44.1

1 886

6.9

20.1

3 349 

12.2

35.7

QC

49 136

16.2

45.7

19 940

6.6

18.6

38 414 

12.6

35.7

ON

65 613

11.3

44.5

35 155

6.1

23.8

46 812 

8.1

31.7

MB

6 371

12.5

42.4

3 237

6.4

21.5

5 417

10.6

36.1

SK

5 326

9.4

37.2

3 365

6.0

23.5

5 635

10.0

39.3

AL

18 463

7.8

37.5

11 509

4.7

23.4

19 929

7.8

39.1

BC

22 202

11.6

43.1

11 853

6.2

23.0

17 478

9.2

33.9

Canada (1)

180 474

11.8

43.1

92 319

6.0

22.1

145 813

9.5

34.8

Source : Statistics Canada, E-STAT, Tables 385-0001 and 384-0002, updated August 1 2011.
N. B.: The data for provincial public administrations are for the fiscal year ending March 31 and the data for local public administrations are for the fiscal year ending on December 31 of the year previous.
T.E.: Total expenditures; (1) including the expenditures of the territorial administrations (Yukon, Northwest Territories and Nunavut).

Considering only the expenditures made by the provincial and local administrations in relation to total expenditures, it will be noted that on average, in Canada 65.2% of expenditures are dedicated to the two main functions of education and social services and health. Furthermore, in a comparison of provinces, Quebec ranks first in terms of the share of budget allocations earmarked for social services and health (45.7%). This province is followed by Ontario (44.5%) and New Brunswick (44.1%), while Alberta (37.5%), Saskatchewan (37.2%) and Prince Edward Island (37.2%) occupy the bottom three positions. These results are due in part to differences in the social service coverage provided from one province to the other. For example, Quebec’s system of childcare centres, which has no equivalent elsewhere in Canada, was granted $900.9 M in FY 2008-2009 – a fact having a major impact on the province’s health and social service expenditures.

Respecting education expenditures, Nova Scotia is the province in which the proportion of total expenditures dedicated to education by the provincial and local administrations is highest (24.7%). It is followed by Prince Edward Island (24.5%), Ontario (23.8%), Saskatchewan (23.5%) and Alberta (23.4%). These results tend to show that the provinces that allocate the smallest proportion of total expenditures to social services and health – in this case, Alberta, Saskatchewan and Prince Edward Island – are also among those where spending on education is highest relative to their total expenditures. It is also worth noting that the same provinces are those for which the share of other expenditures relative to the total are highest : 39.3% in Saskatchewan, 39.1% in Alberta and 38.3 in Prince Edward Island.

Concerning the expenditures of provincial and local administrations as a percentage of GDP, Quebec continues to devote the greatest share of its spending on social services and health (16.2%) – a figure that surpasses that of New Brunswick, which ranks second at 15%, and Canada, at 11.8%. In contrast, the provincial and local administrations in Alberta spend only 7.5% on social services and health as a share of the province’s GDP.

When accounting for combined expenditures on education, health, and social services, Quebec continues to take top place in terms of a proportion of its GDP, at 22.8%. Moreover, this figure is substantially higher than that obtained for all of Canada, at 17.8%. In addition, as was true in the case of its health and social service expenditures, Alberta is the province that spends the least – relative to its GDP – on combined education, health, and social services: 12.2%. This figure is almost less than one half of that reported for Quebec. However, it is important to note that the results given for Alberta are closely related to the scale of its GDP. Thus, when the expenditures of provincial and local administrations are established on a per capita basis, Alberta spends $8,165 on education, health, and social services per capita, whereas Quebec spends $8,824.