Annual Financial Report 1999-2000: 3
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Budgetary Expenditures

Table 3 on page 15 presents budgetary expenditures on both a gross and net basis. The differences are identical to those between gross and net budgetary revenues.

Net budgetary expenditures amounted to $153.4 billion in 1999-2000, up $0.6 billion, or 0.4 per cent, from 1998-99. The "expenditure ratio" – net budgetary expenditures as a percentage of net budgetary revenues – stood at 92.6 per cent in 1999-2000, down from 98.1 per cent in 1998-99. In 1993-94, the expenditure ratio stood at 136.2 per cent.

Public debt charges increased by $0.3 billion, or 0.6 per cent, in 1999-2000. They are affected by interest rate developments as well as by the stock and composition of interest-bearing debt.

Composition of Net Expenditures for 1999-2000 (8927 bytes)

The interest ratio – public debt charges as a percentage of net budgetary revenues – declined from 26.6 per cent in 1998-99 to 25.1 per cent in 1999-2000. This ratio means that, in 1999-2000, the Government spent about 25 cents of every revenue dollar on interest on the public debt. This is down from the peak of 36 cents in 1995-96 and is the lowest ratio since 1981-82. This is money that must be paid to meet the Government's obligations on its debt. The lower the ratio, the more flexibility the Government has to address the key priorities of Canadians.

Expenditure Ratio (8107 bytes)

Average Effective Interest Rate on Interest-Bearing Debt (9755 bytes)

Net program spending – net budgetary expenditures less public debt charges – increased $0.4 billion, or 0.3 per cent, in 1999-2000. The program share – net program spending as a percentage of net budgetary revenues – amounted to 67.4 per cent, down from 71.6 per cent in 1998-99. In 1993-94, the program share was 103.5 per cent.

Within program spending, major transfer payments to persons, consisting of elderly benefits and employment insurance benefits, increased marginally, up $46 million, or 0.1 per cent.

Interest-Bearing Debt (8281 bytes)

Major transfer payments to other levels of government include the Canada Health and Social Transfer (CHST), fiscal arrangements (Equalization, transfers to the territories, as well as a number of small transfer programs) and Alternative Payments for Standing Programs. Net cash transfers declined by $2.3 billion in 1999-2000, or 8.9 per cent. However, all of this decline was attributable to a lower CHST cash supplement in 1999-2000 than in 1998-99 and the inclusion of large prior-year Equalization entitlements in 1998-99.

Interest Ratio (7091 bytes)

Program Share (7351 bytes)

Direct program spending – total program spending less major transfers to persons and other levels of government – consists of subsidies and other transfer payments, expenditures related to Crown corporations, defence spending, and operating and capital expenditures of non-defence departments and agencies. Spending in this component amounted to $53.8 billion in 1999-2000, up $2.6 billion, or 5.1 per cent, from 1998-99. This increase was entirely attributable to the impact of the initiatives announced in the 2000 budget, which totalled $3.4 billion.

Within direct program spending:

  • $900 million to the Canada Foundation for Innovation (CFI) to award funds to help post-secondary educational institutions, research hospitals and not-for-profit institutions modernize their research infrastructure. This brings the Government's total transfer to the CFI to $1.9 billion.
  • $160 million to Genome Canada to fund the activities of five genome science centres.
  • $100 million to create a revolving fund – the Green Municipal Investment Fund – to support projects in areas such as energy and water savings, urban transit and waste diversion.
  • $60 million to fund the Canadian Foundation for Climate and Atmospheric Sciences.
  • $586 million for income disaster assistance to help Canadian farmers.
  • health care to Aboriginals and veterans;
  • research undertaken by government departments;
  • food inspection;
  • Coast Guard and air and sea rescue;
  • operation of national parks and historic sites;
  • collection of taxes;
  • operation of federal correctional institutions and provision of police services; and
  • administration of programs.

Spending in this component increased $3.3 billion, or 11.6 per cent, from 1998-99. Of this amount:

Consistent with the difference between gross and net budgetary revenues, gross budgetary expenditures were $12.4 billion higher than net budgetary expenditures. The differences are described in the section on budgetary revenues.

Table 3
Budgetary Expenditures


1998-99 1999-00 Net Change

($ millions) (%)
Net major transfers to persons
Elderly benefits 22,781 23,410 629 2.8
Employment insurance benefits 11,884 11,301 -583 -4.9
Total 34,665 34,711 46 0.1
Major transfers to other levels of government
Canada Health and Social Transfer (CHST) 12,500 12,500 0 0.0
Fiscal arrangements 10,398 10,721 323 3.1
Alternative Payments for Standing Programs -2,150 -2,425 -275 12.8
Subtotal 20,748 20,796 48 0.2
Special payments:
  CHST cash supplement 3,500 2,500 -1,000 -28.6
  Prior-year adjustments
  CHST 28 -109
  Fiscal arrangements 1,247
  Other 56
Total 25,523 23,243 -2,280 -8.9
Net direct program spending
Subsidies and other transfers
  Agriculture and Agri-food 1,194 1,518 324 27.1
  Foreign Affairs and
  International Trade
2,065 2,114 49 2.4
  Health Canada 1,180 1,161 -19 -1.6
  Human Resources Development 2,429 2,008 -421 -17.3
  Indian Affairs and Northern
  Development
4,101 4,185 84 2.0
  Industry/regional agencies 2,282 2,971 689 30.2
  Veterans Affairs 1,377 1,402 25 1.8
  Other 4,107 3,176 -931 -22.7
  Total 18,735 18,535 -200 -1.1
 Crown corporations
  Canada Mortgage and
  Housing Corporation
1,865 1,928 63 3.4
  Canadian Broadcasting Corporation 912 879 -33 -3.6
  Other 720 146 -574 -79.7
  Total 3,497 2,953 -544 -15.6
Operating and capital expenditures
  Defence 8,781 10,201 1,420 16.2
  All other departments 20,192 22,120 1,928 9.5
  Total 28,973 32,321 3,348 11.6
Net direct program spending 51,205 53,809 2,604 5.1
Net program spending 111,393 111,763 370 0.3
Public debt charges 41,394 41,647 253 0.6
Net budgetary expenditures 152,787 153,410 623 0.4
Adjustments
Canada Child Tax Benefit 5,715 6,000 285 5.0
Old Age Security benefit repayment -496 -554 -58 11.7
Quarterly goods and services tax credit 2,850 2,920 70 2.5
Revenues netted against expenditures 2,305 2,625 320 13.9
Revenues of consolidated Crown corporations 1,498 1,391 -107 -7.1
Net adjustment 11,872 12,382 510 4.3
Gross budgetary expenditures 164,659 165,792 1,133 0.7

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