Public Finance

TOTAL EXPENDITURES

Caution should be exercised when comparing the current expenditures of the Canadian provinces, particularly as each province has its own budgeting and accounting framework, and the responsibilities of municipalities vary from one province to the next. To overcome both of these obstacles, the data used on the following pages are taken from Statistics Canada’s Financial Management System and cover all the expenditures made by provincial and local administrations.

When expressed in nominal value, the current expenditures of provincial and local administrations vary considerably from one province to the next. For example, in 2009, provincial and local administrations spent $147.581B in Ontario whereas in Prince Edward Island, consolidated expenditures amounted to only $1.673B. In order to lessen the impact of the amounts spent by provincial and local administrations when expressed in absolute terms, the following two indicators have been selected for comparison purposes: 

  • current expenditures in dollars per capita;
  • current expenditures as a percentage of GDP.

Current expenditures of provincial and local administrations, 1989-2009


Calculations based on Statistics Canada, E-STAT, Tables 385-0001 (updated July 6, 2010) and 051-0001 (updated July 5, 2010).

The curves illustrating changes in the current expenditures of provincial and local administrations for the four most populous provinces (Ontario, Quebec, Alberta and British Columbia) and Canada between 1989 and 2009 provide clear evidence of an upward trend. For example, in 1989, British Columbia posted the lowest per capita current expenditures, at $5,249. 20 years later – i.e., in 2009 – British Columbia continued to have the lowest per capita expenditures, at $11,567. The figure nevertheless represents an increase of close to 120%, almost three times more than the growth in the population (+39.4% between 1989 and 2009 in this province).

Furthermore, at $7,198 per capita, Alberta was the province posting the highest current expenditures in 1989. In 2009, the provincial and local administrations of this province spent the equivalent of $13,342 per capita, which works out to an increase of nearly 85%. This upward trend is also apparent when one considers the total for expenditures in Canada in 1989 – namely, $6,104 per capita – as compared to the amount recorded for 2009 – namely, $12,407. In this particular case, expenditures can be seen to have increased by close to 103%. Finally, the same situation appears both in Quebec and Ontario, where per capita expenditures rose 110% and 96%, respectively.

Among the factors that explain the sharp increase in per capita expenditures in Canada, inflation has played a major role. According to the Bank of Canada, close to 54% of the difference in expenditure levels owes to inflationary rises between 1989 and 2009 ($1.00 in 1989 was equivalent to approximately $1.54 in 2009). However, a significant share of this growth is due to the expanded intervention of provincial and local administrations in 2009 as compared to 1989. As such, this trend is in keeping with a notable rise in government expenditures (on healthcare in particular) and the creation of new programs (e.g., drug insurance and childcare centres in Quebec).

Consolidated expenditures of provincial and local administrations, 1989-2008
(as % of GDP), Quebec, Ontario, Alberta, British Columbia, Canada


Calculations based on Statistics Canada, E-STAT, Tables 385-0001 (updated on July 10, 2009) and 384-0002 (updated on July 8, 2009).

Changes in the expenditures of provincial and local administrations relative to the gross domestic product (GDP) vary from one province to the next. Whereas in Alberta, expenditures as a percentage of GDP fell between 1989 and 2008 – dropping from 26.7% to 15.4% – all the other provinces accounted for in the chart experienced slight increases. Thus, in Quebec, expenditures as a percentage of GDP rose from 30.6% to 33.5%, in Ontario from 20.9% to 24.8%, and in British Columbia from 22.2% to 23.5%. As this chart makes clear, government expenditures account for a greater share of Quebec’s economy than in the other provinces. Indeed, Quebec is where provincial and local expenditures are the highest as a proportion of the province’s GDP. This situation is due in part to the fact that the government of Quebec assumes responsibility for public services that elsewhere in Canada are provided by the federal government.