Government finance: Main estimates tabled

The government plans to spend a total of $199.7-billion between April 1, 2006 and March 31, 2007, according to documents tabled in the House of Commons today.

Total government spending in this fiscal year is set to rise by $12.7-billion or 6.8 per cent. That rate of growth in government spending is more than double the rate of growth of the Canadian economy, which the Conference Board of Canada believes will grow by about 3.1 per cent in 2006. The rate of growth of government spending is also well above the inflation rate of 2.2 per cent.

All the numbers tabled by the government today, however, are likely to change.

The documents tabled in the House are known as the Main Estimates and are used to support legislation by which the government gets legal authority to spend public money. The Main Estimates are laid out according to the fiscal framework set out in that fiscal year's federal Budget.
But the federal Budget for the current fiscal year will not be tabled until next week which means the fiscal framework for the Main Estimates is based on the last Liberal budget.

The government was forced to proceed with this rare procedure of tabling the Main Estimates ahead of the Budget because of statutory or legal requirements related to the authority of Parliament to spend money.

So, recognizing that these numbers are almost certain to change when Finance Minister Jim Flaherty tables his budget at 4 pm on Tuesday, May 2, here are some of the spending highlights announced today (I hope to have more later):

  • Of the total $199.7-billion the federal government plans to spend this year, $70.2-billion will be spent on various government programs and $128.4-billion will be allocated to statutory spending requirements.
  • The federal government will transfer $38.3-billion to other levels of government, mostly the provinces, which represents an increase of 5.6-billion or 17.2 per cent over the previous year.
  • Payouts to individuals, in the form of employment insurance and benefits for the elderly will total $45.6-billion this year, an increase of $1.5-billion or 3.4 per cent over the previous year. Notably, payouts under EI will decrease this year by 1.1 per cent or $171-million.
  • Crown Corporations will receive $5.2-billion, an increase of 9.6 per cent or $193.2-million.
  • The government will allocate $34.4-billion to pay charges on the public debt, a drop of $1.5-billion or 4.2 per cent compared to the previous year.
  • The government's operating and capital expenses will be $47.5-billion, an increase of $4.25-billion or 9.8 per cent compared to the previous year.
  • The government will pay $1.2-billion more in salaries and wages to its employees, a result, it says, of new collective agreements with many employees.
  • Parliament and the Governor General cost Canadians $519.7-million in 2005-2006 and are estimated to cost $24.2-million or 4.6 per cent more this year. Mind you, spending on Parliament and the Governor General accounts for just three cents of every ten dollars the government spends.
  • Spending on social programs accounts for the biggest proportion of government spending. More than 45 cents of every dollar the government is to spend this year – some $90.4-billion — will go to social programs, including major transfers to individuals and other governments. Spending on social programs will rise 8.6 per cent this year.
  • So far as individual sectors go, the biggest increase in program spending will be to industrial, regional and scientific-technological programs. Spending in that sector will rise 15.6 per cent to $3.9-billion but will  account for just 2 cents of every dollar spent by the government.
  • The biggest decrease is in the transportation sector, where spending will drop by 4.6 per cent to $1.5-billion.
  • Spending on the Canadian Broadcasting Corp. will total $1.11-billion this fiscal year, a jump of 13.2 per cent compared to the previous year. Spending on the CBC is the single largest cultural program item next to spending by Department of Canadian Heritage.

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