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Annex 3
National Accounts-Public Accounts Reconciliation

Highlights

  • This annex provides detailed information on the translation of the five-year fiscal projections provided by the private sector forecasters from a National Accounts basis to a Public Accounts basis.
  • The National Accounts and the Public Accounts are the two key accounting frameworks that provide measures of the Government of Canada's revenues, expenses and budgetary balance.
  • Differences in the measures of the government sector arise because the two accounting frameworks are designed for different purposes and because of timing factors related to the receipt of data.
  • The Public Accounts of Canada provide detailed information to Parliament on the Government's financial position, as required under the Financial Administration Act, in accordance with accounting policies that are generally consistent with the standards set out by the Public Sector Accounting Board of the Canadian Institute of Chartered Accountants. The Public Accounts are audited by the Auditor General of Canada. Since 2002-03 the Public Accounts have been presented on a full accrual basis of accounting. Therefore revenues are recognized when they are earned and expenses when they are incurred.
  • The System of National Accounts provides an integrated framework for measuring economic activity, including the activities of governments. As a result, the National Accounts measure of government financial positions provides a consistent framework in which comparisons can be made between the various levels of government in Canada as well as between countries.

National Accounts and Public Accounts Budgetary Balance

National Accounts and Public Accounts Budgetary Balance

  • The National Accounts measure of the budgetary balance is net lending. This is the difference between total government income (revenues) and outlays (expenses), adjusted for the difference between current-period investment in fixed capital and depreciation, and for net capital transfers.
  • Both measures provide important and complementary perspectives on the Government's fiscal position. Although the measures of the budgetary balance differ from one year to the next, their trends are broadly similar.

Table A3.1
Average Private Sector Projection of the Budgetary Balance
(National Accounts Basis)
  Actual
2004-05		 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

(billions of dollars)
Income and outlay account              
  Income 211.4 227.6 237.1 246.8 254.6 264.7 276.4
  Outlays 209.0 216.4 220.2 228.0 236.2 245.9 254.2
  Savings 2.4 11.2 17.0 18.8 18.4 18.9 22.2
Capital account              
  Capital cost allowance 3.6 3.6 3.7 3.7 3.9 4.4 4.8
  Net transfers of capital 0.3 -0.1 -0.7 -1.2 -1.3 -1.2 -1.5
  Capital formation -3.6 -3.7 -3.7 -4.3 -6.3 -7.6 -7.6
  Total 0.3 -0.1 -0.8 -1.8 -3.7 -4.4 -4.3
Net lending 2.8 11.1 16.2 17.0 14.7 14.4 17.9
Reference              
  Budgetary balance
   (Public Accounts basis)		 1.6 13.4 15.0 16.4 15.7 16.5 19.8
Note: Totals may not add due to rounding.
  • Differences in the National Accounts and Public Accounts frameworks reflect:
  • Differences related to the universe covered by each system. The Public Accounts include all departments, agencies, Crown corporations and funds, while the government sector in the National Accounts is, in the main, a subset of this universe based on ownership, control and funding criteria.
  • Conceptual and definitional differences related to the scope of each system. For example, the Public Accounts include revenues related to capital gains, asset sales and asset revaluations. The National Accounts record assets at market value and changes in the values as they occur, while gains and losses are not recorded in income. On a Public Accounts basis, they are recorded at the lower of the book or market value, and changes are recorded as income.
  • Timing differences related to the recording of various revenues and expenses. For example, in the Public Accounts, liabilities for payments to arm's-length organizations, such as foundations and trusts, are recorded in the year in which these are incurred. In the National Accounts, no obligation is recorded until the payments are made to the ultimate recipient.
  • Other adjustments are due to the fact that the latest National Accounts estimates do not reflect the final year-end fiscal numbers found in the 2005 Public Accounts of Canada. Those adjustments include a seasonal factor, the net change in accounts receivable, write-offs and prior-year adjustments.
  • The following pages outline the adjustments required to translate each of the major revenue and expense components from average private sector projections on a National Accounts basis to a Public Accounts basis.

Table A3.2
Average Private Sector Projection of Budgetary Revenues
(National Accounts Basis)
Actual
 2004-05		 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

(millions of dollars)
Personal income tax 96,207 105,005 110,890 116,950 122,185 127,820 135,270
Corporate income tax 32,103 35,770 37,940 38,835 38,070 38,925 39,240
Non-resident income tax 4,733 5,055 5,315 5,575 5,845 6,120 6,370
Employment insurance premiums 17,426 17,640 16,675 17,015 17,565 18,180 18,870
Goods and service tax 34,135 36,245 37,510 38,905 40,650 42,500 44,595
Customs import duties 3,010 3,350 3,535 3,695 3,775 3,900 3,905
Motive fuel taxes 4,812 5,225 5,330 5,485 5,655 5,795 5,925
Other excise taxes and duties 5,761 5,690 5,765 5,885 6,035 6,205 6,400
Other non-tax revenues1 13,262 13,660 14,195 14,450 14,790 15,305 15,805
Total 211,449 227,640 237,145 246,800 254,565 264,750 276,375
Reference
Budgetary revenues
(Public Accounts basis)		 198,420 207,645 217,355 226,755 234,030 243,645 254,625

Note: Totals may not add due to rounding.

1

Includes revenues from Crown corporations, sales of goods and services, foreign exchange revenues, investment income, transfers from persons and transfers from other levels of government.
  • The National Accounts provide a breakdown of revenue similar to that found in the Public Accounts. In translating these revenue projections to a Public Accounts basis, a number of adjustments are required. These include adjustments to reflect:
  • More up-to-date data for the current year on a Public Accounts basis, as reported in The Fiscal Monitor.
  • Reclassification of a number of expenditure components in the National Accounts, which are netted against revenues in the Public Accounts, such as the Canada Child Tax Benefit (CCTB) and the goods and services tax (GST) credit.
  • Differences in the definition of the government sector in the two accounting systems.
  • Inclusion of certain revenues in the Public Accounts that are not accounted for in the National Accounts, such as revenues from asset sales and the impact of revaluations of financial assets, as well as some payables and receivables.
  • The following sections provide a detailed account of these adjustments for each major revenue component.

Translation of National Accounts Into Public Accounts

Table A3.3
Average Private Sector Projection of Personal Income Tax Revenues
Actual 
2004-05		 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

(millions of dollars)
Average private  sector-National  Accounts 96,207 105,005 110,890 116,950 122,185 127,820 135,270
  Reclassifications
    CCTB -8,746 -9,290 -9,670 -9,850 -9,980 -10,110 -10,240
    Trust income and 
     other income tax		 1,259 1,245 1,315 1,385 1,445 1,515 1,600
    Interest and penalties -1,722 -1,880 -1,985 -2,095 -2,185 -2,290 -2,420
    OAS Income-tested 
     repayments		 -745 -775 -825 -865 -905 -945 -985
    Non-resident tax -237 -260 -275 -290 -300 -315 -335
    GST employer rebate 112 120 130 135 140 150 155
    Refundable tax credits -93 -115 -125 -130 -145 -165 -180
  Year-to-date 
    collections experience		 0 -2,000 -2,110 -2,230 -2,325 -2,435 -2,575
  Other 3,798 4,145 4,355 4,595 4,805 5,040 5,240
  Net adjustments -6,374 -8,810 -9,190 -9,340 -9,450 -9,555 -9,735
Average private  sector-Public  Accounts 89,833 96,195 101,700 107,610 112,730 118,265 125,535
Note: Totals may not add due to rounding.
  • Various reclassifications are required to translate the National Accounts projection of personal income tax revenues to the accrual Public Accounts projection. The most significant is to deduct the value of the CCTB from National Accounts revenues. In the Public Accounts, personal income tax revenues are presented net of the CCTB, while in the National Accounts, the CCTB is classified as part of outlays.
  • Other reclassifications involved in moving to the Public Accounts definition of personal income tax revenues include:
  • Adding tax revenues related to trust income.
  • Deducting interest and penalties collected on taxes owing and in dispute, as these are counted in non-tax revenues in the Public Accounts.
  • Deducting Old Age Security (OAS) benefit repayments, which are netted against OAS benefits in the Public Accounts.
  • Deducting the non-resident withholding tax imposed on persons, which is shown as a separate revenue component in the Public Accounts.
  • Adding the GST employer rebate, which is not included in the National Accounts.
  • Deducting the personal refundable tax credits.
  • These adjustments are generally assumed to grow in line with the average private sector projection of growth in National Accounts personal income tax revenues over the planning period.
  • An adjustment is made to reflect the most recent year-to-date collections experience. The private sector National Accounts estimates are based on fiscal data available as of June 2005, which report that personal income tax revenues grew by nearly 12 per cent year-over-year in the second quarter of 2005-about twice the rate of the estimated growth in wages and salaries. However, fiscal data through to September 2005, as reported in The Fiscal Monitor, indicate year-over-year growth of 8.6 per cent, including an average growth rate of only 4.6 per cent in August and September. It is expected that the growth in personal income tax revenues over the balance of the fiscal year will moderate and be more in line with its tax base. As a result, the private sector National Accounts projections were lowered by $2.0 billion in 2005-06, bringing the increase in personal income tax revenues to about 7 per cent for 2005-06 as a whole. In future years, this adjustment is assumed to grow in line with personal income tax revenues on a National Accounts basis.

Translation of National Accounts Into Public Accounts

Table A3.4
Average Private Sector Projection of Corporate Income Tax Revenues
Actual 
2004-05		 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

(millions of dollars)
Average private      sector-National  Accounts 32,103 35,770 37,940 38,835 38,070 38,925 39,240
  Reclassifications              
    Interest and penalties -481 -30 -30 -30 -30 -30 -30
    Refundable tax credits -801 -895 -945 -970 -950 -970 -980
  Other 865 -1,070 -1,135 -1,165 -1,140 -1,165 -1,175
  Net adjustments -2,147 -1,990 -2,115 -2,165 -2,120 -2,170 -2,185
Average private  sector-Public  Accounts 29,956 33,780 35,825 36,675 35,950 36,760 37,050
Note: Totals may not add due to rounding.
  • The main reclassifications involved in translating the private sector average corporate income tax revenue projections from a National Accounts to a Public Accounts basis are:
  • The deduction of the corporate refundable tax credits (for example, for scientific research and experimental development), which are netted against revenues in the Public Accounts.
  • The removal of interest and penalties, which are reported as other non-tax revenues in the Public Accounts.
  • These adjustments are projected to grow in line with the growth in corporate income tax collections over the planning period.
  • Remaining adjustments reflect the fact that corporate tax liabilities in the National Accounts are based on a quarterly survey of corporations, while in the Public Accounts they are based on assessed corporate income tax. The 2004-05 adjustment is projected to grow in line with National Accounts corporate income tax revenues over the planning period.

Translation of National Accounts Into Public Accounts

Table A3.5
Average Private Sector Projection of Non-Resident Withholding Tax and Other Income Tax
Actual 
2004-05		 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

(millions of dollars)
Average private  sector-National  Accounts 4,733 5,055 5,315 5,575 5,845 6,120 6,370
  Reclassifications              
    Trust income and 
     other income tax		 -1,259 -1,245 -1,315 -1,385 -1,445 -1,515 -1,600
    Non-resident tax 237 260 275 290 300 315 335
  Other -151 -140 -150 -155 -165 -170 -180
  Net adjustments -1,173 -1,125 -1,190 -1,255 -1,310 -1,370 -1,445
Average private  sector-Public  Accounts 3,560 3,930 4,125 4,320 4,535 4,750 4,920
Note: Totals may not add due to rounding.
  • The main adjustment involved in translating the non-resident withholding tax from a National Accounts to a Public Accounts basis is the removal of tax on trust income and the addition of non-resident tax. The former is included in personal income tax revenues in the Public Accounts, while the latter is included in personal income tax revenues in the National Accounts. Tax on trust income and other income tax are projected to grow in line with National Accounts personal income tax revenues.
  • The other adjustment required to move from a National Accounts to a Public Accounts basis is to replace Statistics Canada's accrual adjustment related to the timing of receipts with the assessment-based accrual estimates contained in the Public Accounts.

Translation of National Accounts Into Public Accounts

Table A3.6
Average Private Sector Projection of Goods and Services Tax Revenues
Actual 
2004-05		 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

(millions of dollars)
Average private  sector-National  Accounts 34,135 36,245 37,510 38,905 40,650 42,500 44,595
  Reclassifications              
    GST credit -3,384 -3,440 -3,515 -3,585 -3,675 -3,765 -3,845
    GST employer rebate -112 -120 -130 -135 -140 -150 -155
  Other -881 -1,155 -1,195 -1,240 -1,300 -1,360 -1,430
  Net Adjustments -4,377 -4,715 -4,840 -4,960 -5,115 -5,270 -5,430
Average private  sector-Public  Accounts 29,758 31,530 32,670 33,945 35,535 37,230 39,165
Note: Totals may not add due to rounding.
  • The key adjustment required to translate GST revenues from a National Accounts to a Public Accounts basis is the removal of the GST credit from National Accounts revenues. The National Accounts report the GST credit as part of outlays, while the budgetary presentation in the Public Accounts is net of the credit.
  • A second reclassification is made to remove the GST employer rebate from the National Accounts. The GST employer rebate arises when employers claim a GST/HST (harmonized sales tax) deduction on automobiles they buy or lease for an employee's business use. The employee then pays personal income tax on this taxable benefit. The budgetary presentation in the Public Accounts is net of the rebate. The GST employer rebate is projected to grow in line with National Accounts personal income tax revenues.
  • Statistics Canada calculates its estimate of GST on taxable expenditures, which the private sector forecasters then grow in line with their forecasts of the applicable tax base. The Public Accounts accrual estimate is based on assessed receipts, rebates and refunds. This adjustment factor is projected to grow in line with the private sector forecast of National Accounts GST revenues over the planning period.

Translation of National Accounts Into Public Accounts

Table A3.7
Average Private Sector Projection of Customs Import Duties
Actual 
2004-05		 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

(millions of dollars)
Average private  sector-National  Accounts 3,010 3,350 3,535 3,695 3,775 3,900 3,905
  Year-to-date
   collections experience		 0 -170 -180 -185 -190 -195 -200
  Other 81 90 95 100 100 105 105
  Net adjustments 81 -80 -85 -90 -90 -95 -95
Average private  sector-Public  Accounts 3,091 3,270 3,450 3,610 3,685 3,805 3,815
Note: Totals may not add due to rounding.
  • The estimates of customs import duties are very similar under the two accounting systems. An adjustment is included to reflect the most recent year-to-date collections experience. The National Accounts estimates are based on fiscal data available as of June 2005, while the Public Accounts projections reflect data as of September 2005 as reported in The Fiscal Monitor. In the National Accounts second-quarter 2005 data, customs import duties grew by nearly 11 per cent on a year-over-year basis. However through September 2005, customs import duties on a Public Accounts basis were up only 6.5 per cent from September of last year. The National Accounts projections were decreased by $170 million in 2005-06 to bring the growth in customs import duties in line with recent growth rates, which are also more consistent with consumption growth. In future years, this adjustment is assumed to grow in line with the average private sector projection of growth in National Accounts customs import duties.
  • The other adjustment required to move from a National Accounts to a Public Accounts basis is to replace Statistics Canada's accrual adjustment related to the timing of receipts with the assessment-based accrual estimates contained in the Public Accounts. This adjustment factor is projected to grow in line with National Accounts customs import duties over the planning period.

Translation of National Accounts Into Public Accounts

Table A3.8
Average Private Sector Projection of Motive Fuel Taxes
Actual
2004-05		 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

(millions of dollars)
Average private  sector-National  Accounts 4,812 5,225 5,330 5,485 5,655 5,795 5,925
  Year-to-date 
   collections experience		 0 -315 -320 -330 -340 -350 -355
  Other 242 270 275 285 295 300 310
  Net adjustments 242 -40 -40 -45 -45 -45 -45
Average private  sector-Public  Accounts 5,054 5,180 5,290 5,445 5,610 5,745 5,880
Note: Totals may not add due to rounding.
  • Translating motive fuel taxes from a National Accounts to a Public Accounts basis includes an adjustment for the year-to-date collections experience to reflect the most up-to-date information available. The National Accounts estimates are based on fiscal data available as of June 2005, while the Public Accounts projections reflect data as of September 2005 as reported in The Fiscal Monitor. In the National Accounts second-quarter 2005 data, motive fuel taxes grew by about 9 per cent on a year-over-year basis. However, this strong growth largely reflects a change by the Canada Revenue Agency in the methodology used to allocate total excise taxes and duties in 2005-06, but which was not applied to the 2004-05 data. As a result, the private sector National Accounts projections were decreased by $315 million in 2005-06 to bring the annual growth to 2.5 per cent, in line with the expected increase in fuel consumption. In future years, this adjustment is assumed to grow in line with motive fuel tax revenues.
  • The other adjustment is largely due to the difference between the accrual adjustments in the National Accounts, which reflect the timing of receipts, and those in the Public Accounts, which reflect underlying taxes assessed. This adjustment factor is projected to grow in line with National Accounts motive fuel tax revenues over the planning period.

Translation of National Accounts Into Public Accounts

Table A3.9
Average Private Sector Projection of Other Excise Taxes and Duties
Actual
2004-05		 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

(millions of dollars)
Average private  sector-National  Accounts 5,761 5,690 5,765 5,885 6,035 6,205 6,400
  Reclassifications              
    Other indirect taxes -334 -330 -340 -350 -360 -375 -385
  Other -473 -455 -485 -550 -635 -730 -845
  Net adjustments -807 -785 -825 -900 -995 -1,105 -1,230
Average private  sector-Public  Accounts 4,954 4,905 4,940 4,985 5,040 5,105 5,170
Note: Totals may not add due to rounding.
  • Other excise taxes and duties principally include taxes and duties on alcohol and tobacco products. There are two main adjustments involved in translating other excise taxes and duties from a National Accounts to a Public Accounts basis.
  • The first involves the reclassification of certain miscellaneous revenues that in the Public Accounts are recorded as non-tax revenues.
  • The second adjustment is due to the difference between the National Accounts accrual adjustment, reflecting the timing of receipts, and the Public Accounts accrual adjustment, reflecting underlying assessments.

Translation of National Accounts Into Public Accounts

Table A3.10
Average Private Sector Projection of Employment Insurance Premium Revenues
Actual 
2004-05		 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

(millions of dollars)
Average private  sector-National  Accounts 17,426 17,640 16,675 17,015 17,565 18,180 18,870
  Reclassifications              
    Federal government 
     as employer		 -348 -350 -335 -340 -350 -365 -375
  Prior year adjustment 229 0 0 0 0 0 0
  Net adjustments -119 -350 -335 -340 -350 -365 -375
Average private  sector-Public  Accounts 17,307 17,285 16,340 16,675 17,215 17,815 18,490
Note: Totals may not add due to rounding.
  • Translating employment insurance (EI) premium revenues from a National Accounts to a Public Accounts basis involves removing the premiums paid by the federal government as an employer from the National Accounts estimate, as these are netted against both revenues and expenses on a Public Accounts basis. In future years, this adjustment is assumed to grow in line with EI premium revenues.
  • The remaining corrections largely reflect prior-year adjustments. These arise because the Department of Finance Canada must estimate the share of total deductions at source that represent EI revenues over the course of the fiscal year. Only after all tax returns have been assessed (usually by December of the year following the tax year in question) are EI revenues known with certainty. This adjustment is made in the National Accounts with a lag. The adjustment does not carry forward over the planning period.

Translation of National Accounts Into Public Accounts

Table A3.11
Average Private Sector Projection of Other Non-Tax Revenues
Actual
2004-05		 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

(millions of dollars)
Average private sector-National  Accounts 13,262 13,660 14,195 14,450 14,790 15,305 15,805
  Reclassifications              
    External revenue netted 
     against expenditures		 -3,044 -3,150 -3,210 -3,295 -3,385 -3,465 -3,590
    Crown corporations 2,611 2,295 2,030 2,475 2,325 2,245 2,230
    Interest and penalties 2,349 2,190 2,315 2,440 2,555 2,675 2,830
    Petro-Canada 2,562 0 0 0 0 0 0
    Revaluations and net 
     gains/losses		 -813 -1,325 0 0 0 0 0
    Youth Allowance Recovery -605 -645 -695 -735 -770 -805 -850
    Agencies, funds and foundations -725 -745 -765 -790 -815 -835 -860
  Other 691 -710 -840 -1,050 -965 -945 -970
  Net adjustments 1,645 -2,090 -1,175 -955 -1,060 -1,135 -1,205
Average private sector-Public  Accounts 14,907 11,570 13,020 13,495 13,730 14,170 14,595
Note: Totals may not add due to rounding.
  • In the National Accounts, other non-tax revenues consist of revenues from Crown corporations, sales of goods and services, foreign exchange revenues, return on investments, transfers from persons and transfers from other levels of government. The Public Accounts components are considerably different. The key differences between the two are highlighted here:
  • In the Public Accounts, departmental revenues that are levied for specific services, such as contract costs of policing services in provinces, are netted against expenses, whereas in the National Accounts they are presented on a gross basis.
  • The National Accounts do not include the unremitted profits of enterprise Crown corporations in current income, but these are included on a Public Accounts basis.
  • Interest and penalties related to overdue taxes must be added as these are included in other non-tax revenues in the Public Accounts but are classified with their respective revenues in the National Accounts.
  • Revenues from the sale of the Government's remaining shares in Petro-Canada are not included in revenues on a National Accounts basis and thus must be added in 2004-05.
  • Revaluations (largely foreign-exchange-related revaluations) and gains and losses on asset sales are not included in current income on a National Accounts basis but are included on a Public Accounts basis.
  • The Youth Allowance Recovery is deducted from the National Accounts revenues as it is presented on a net expense basis in the Public Accounts.
  • Finally, the National Accounts include the interest earnings and sales of a number of entities that are not considered part of the Government of Canada for the purpose of the Public Accounts, including interest earnings of trusts and foundations set up by third parties.

Translation of National Accounts Into Public Accounts

Table A3.12
Average Private Sector Projection of Federal Government Expenses
(National Account Basis)
Actual
2004-05		 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

(millions of dollars)
Federal government expenses              
  Goods and services 52,772 54,895 57,175 59,405 62,615 65,675 68,375
  Current transfers              
    To persons              
      OAS benefits 28,300 29,645 31,020 32,370 33,870 35,470 37,150
      EI benefits 13,197 13,220 13,690 14,160 14,725 15,280 15,900
      CCTB 8,746 9,290 9,670 9,850 9,980 10,110 10,240
      GST credit 3,384 3,440 3,515 3,585 3,675 3,765 3,845
      Other 12,218 12,725 13,035 13,410 13,865 14,360 14,880
    To businesses 5,366 5,185 5,270 5,020 4,860 4,835 4,850
    To non-residents 4,056 4,120 4,360 4,645 4,940 5,275 5,665
    To other levels of government              
      Federal transfer support 
       for health and other 
       social programs		 26,955 25,090 26,295 28,135 29,530 31,295 32,850
      Equalization 10,963 13,730 11,280 11,675 12,085 12,510 12,945
      Other 10,784 12,680 12,045 12,545 13,035 14,340 14,650
  Interest on public debt 32,270 32,420 32,810 33,185 33,005 32,965 32,840
Total outlays 209,011 216,440 220,165 227,985 236,185 245,880 254,190
Reference              
  Total expenses 
   (Public Accounts basis)		 196,794 194,235 202,385 210,390 218,310 227,095 234,810
Note: Totals may not add due to rounding.
  • The National Accounts concept of total outlays broadly corresponds to the Public Accounts concept of total expenses, including public debt charges. The National Accounts include all major transfers to persons, such as OAS and EI benefits, as well as other transfers to persons, such as programs supporting research, students, Aboriginal peoples and organizations. The National Accounts also include the CCTB and the GST credit as transfers to persons. Refundable tax credits to persons and businesses are also included in the National Accounts as transfers to persons and businesses respectively.
  • Transfers to other levels of government include transfers in support of health care, equalization, labour training and infrastructure, as well as to universities and territorial governments.

Translation of National Accounts Into Public Accounts

Table A3.13
Average Private Sector Projection of Elderly Benefits
Actual 
2004-05		 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

(millions of dollars)
Average private sector-National Accounts 28,300 29,645 31,020 32,370 33,870 35,470 37,150
  Reclassifications              
    Payments to non-residents 359 375 380 390 400 410 420
    Income-tested repayments -745 -775 -825 -865 -905 -945 -985
    Total -385 -400 -445 -470 -500 -530 -565
  Other -44            
  Net adjustments -429 -400 -445 -475 -505 -535 -565
Average private  sector-Public Accounts 27,871 29,245 30,575 31,895 33,365 34,935 36,585
Note: Totals may not add due to rounding
  • Translating elderly benefits from a National Accounts to a Public Accounts basis involves adding OAS payments to non-residents to the National Accounts. In the National Accounts, these are treated as transfers to non-residents.
  • Amounts repaid due to the income testing of OAS payments for pensioners with an individual net income above $60,806 as of October 1 (this amount is indexed quarterly), which is done through the tax system at tax-filing time, lowers OAS payments reported in the Public Accounts, but not on a National Accounts basis.

Translation of National Accounts Into Public Accounts

Table A3.14
Average Private Sector Projection of Employment Insurance Benefits
Actual 
2004-05		 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

(millions of dollars)
Average private sector-National Accounts 13,197 13,220 13,690 14,160 14,725 15,280 15,900
  Reclassifications              
    Employment benefits and
     support measures subsidies		 784 780 780 780 780 780 780
    EI transfers to provinces 891 895 895 895 895 895 895
    Total 1,675 1,675 1,675 1,675 1,675 1,675 1,675
  ERC savings   -110 -205 -345 -375 -375 -375
  Other -124 -125 -130 -135 -140 -150 -160
  Net adjustments 1,551 1,440 1,340 1,195 1,160 1,150 1,140
Average private  sector-Public Accounts 14,748 14,660 15,030 15,355 15,885 16,430 17,040
Note: Totals may not add due to rounding.
  • Translating EI benefits from a National Accounts to a Public Accounts basis requires the following adjustments.
  • The National Accounts estimate includes only those Employment Benefits and Support Measures (EBSMs) that the System of National Accounts considers to be direct transfers to persons. This amount represents about one-third of total EBSM spending. The other two-thirds of the cost of EBSMs, which is included in the National Accounts expenditures but not in transfers to persons, must be added, as all EBSM spending is included in the Public Accounts estimate of EI benefits.
  • The cost of transfers to provinces funded out of the EI program is included as transfers to provinces in the National Accounts, but is included in EI benefits in the Public Accounts.
  • The Expenditure Review Committee (ERC) identified savings through improved efficiency of the EI program. These savings are subtracted from the National Accounts forecasts. The other portion of the ERC savings from the EI program applies to the operating sector of the program.
  • The remaining adjustment reflects the fact that repayments are included in the National Accounts, while they are excluded from the Public Accounts. The adjustment is projected to grow in line with the National Accounts EI benefits over the planning period.

Translation of National Accounts Into Public Accounts

Table A3.15
Average Private Sector Projection of Federal Transfers Support for Health and Other Social Programs
Actual
2004-05		 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

(millions of dollars)
Average privat sector-National Accounts 26,955 25,090 26,295 28,135 29,530 31,295 32,850
  Reclassifications              
    Alternative Payments for 
     Standing Programs		 2,745 2,835 2,995 3,165 3,300 3,445 3,625
    Early Learning and Child Care -700 -650 -1,150 -1,150 -1,150 -1,150
    Total 2,745 2,135 2,345 2,015 2,150 2,295 2,475
  Accrual adjustments              
    Diagnostic and Medical 
     Equipment Trust		 -500            
    2003-04 CHST supplement -1,393            
    2004 Public Health and 
      Immunization Trust		 -400            
    Total -2,293            
  Other 424            
  Net adjustments 876 2,135 2,345 2,015 2,150 2,295 2,475
Average private sector-Public  Accounts 27,831 27,225 28,640 30,150 31,680 33,590 35,325
Note: Totals may not add due to rounding.
  • In order to move from the National Accounts to the Public Accounts, the following adjustments must be made:
  • The National Accounts include Alternative Payments for Standing Programs and Early Learning and Child Care transfers, while in the Public Accounts they are shown separately in other major transfers to other levels of government.
  • Timing adjustments are required since the National Accounts record the expenditures when the payments are actually made to the trust funds, whereas the Public Accounts record the liability for these amounts when it is incurred. These timing differences arise due to payments made for the Diagnostic and Medical Equipment Trust, the Canada Health and Social Transfer (CHST) supplement and the Public Health and Immunization Trust.
  • Differences may also arise between these series because the latest National Accounts do not reflect the final year-end fiscal numbers in the 2005 Public Accounts of Canada.

Translation of National Accounts Into Public Accounts

Table A3.16
Average Private Sector Projection of Fiscal Transfers
Actual 
2004-05		 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

(millions of dollars)
Average private sector-National Accounts 10,963 13,730 11,280 11,675 12,085 12,510 12,945
  Reclassifications              
    Territorial Formula Financing 1,962 2,030 2,070 2,140 2,215 2,295 2,375
    Statutory subsidies 32 30 30 30 30 30 30
    Youth Allowance Recovery -604 -645 -695 -735 -770 -805 -845
    Offshore Revenues Accords 2,830 -2,830          
    Other payments 477 30          
    Total 4,697 -1,385 1,405 1,435 1,475 1,520 1,560
  Accrual adjustments              
    Provision for valuation -120            
    Loans to provinces 684            
    Total 564            
  Other -55            
  Net adjustments 5,206 -1,385 1,405 1,435 1,475 1,520 1,560
Average private sector-Public  Accounts 16,169 12,345 12,685 13,110 13,560 14,030 14,505
Note: Totals may not add due to rounding.
  • Fiscal transfers on a National Accounts basis consist of equalization and stabilization. To translate this to a Public Accounts basis requires adding amounts for Territorial Formula Financing, the Youth Allowance Recovery and statutory subsidies. The one-time payment related to the Offshore Revenues Accords is adjusted since the National Accounts record the expenditures when the payments are actually made, whereas the Public Accounts record the liability for this amount when it is incurred.
  • Accrual adjustments are required since the National Accounts reflect equalization cash payments, whereas the Public Accounts reflect equalization entitlements.
  • Other adjustments reflect the fact that the latest National Accounts do not include the final year-end fiscal numbers.

Translation of National Accounts Into Public Accounts

Table A3.17
Average Private Sector Projection of Direct Program Spending
Actual 
2004-05		 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

(millions of dollars)
Other program spending              
  Current expenses on goods 
   and services		 52,772 54,895 57,175 59,405 62,615 65,675 68,375
  Other programs              
    Canada Child Tax Benefit 8,746 9,290 9,670 9,850 9,980 10,110 10,240
    GST credit 3,384 3,440 3,515 3,585 3,675 3,765 3,845
    Other transfers to persons 12,218 12,725 13,035 13,410 13,865 14,360 14,880
  Subsidies 5,366 5,185 5,270 5,020 4,860 4,835 4,850
  Transfers to non-residents 4,056 4,120 4,360 4,645 4,940 5,275 5,665
  Other transfers to other 
   levels of government		 10,784 12,680 12,045 12,545 13,035 14,340 14,650
  Spending included in the 
   capital and financial account		              
    Capital cost allowance -3,623 -3,645 -3,660 -3,705 -3,930 -4,355 -4,765
    Net transfer of capital -269 -95 725 1,205 1,340 1,240 1,485
    Capital formation 3,554 3,695 3,750 4,265 6,310 7,560 7,560
National Accounts- other 
 program spending		 96,988 102,290 105,885 110,225 116,690 122,805 126,785
Reclassifications              
  Elderly payments to 
   non-residents		 -359 -375 -380 -390 -400 -410 -420
  Employment Benefits and 
   Support Measures/EI transfers 
   to provinces		 -1,675 -1,675 -1,675 -1,675 -1,675 -1,675 -1,675
  Federal government EI 
   contributions		 -348 -350 -335 -340 -350 -365 -375
  Canada Child Tax Benefit -8,746 -9,290 -9,670 -9,850 -9,980 -10,110 -10,240
  GST credit -3,384 -3,440 -3,515 -3,585 -3,675 -3,765 -3,845
  Early Learning and Child Care   -50 -50 -50 -50 -50 -50
  New Deal for Cities 
   and Communities		   -600 -600 -800 -1,000 -2,000 -2,000
  Territorial Formula Financing -1,962 -2,030 -2,070 -2,140 -2,215 -2,295 -2,375
  Statutory subsidies -32 -30 -30 -30 -30 -30 -30
  External revenue netted 
   against expenditures		 -3,044 -3,150 -3,210 -3,295 -3,385 -3,465 -3,590
  Consolidated Crown 
   corporation revenues		 -1,506 -1,535 -1,565 -1,600 -1,630 -1,665 -1,695
  Refundable tax credits -894 -1,010 -1,070 -1,100 -1,095 -1,140 -1,160
Other adjustments              
  Bad debt expense 2,235 2,310 2,325 2,370 2,420 2,460 2,515
  Capital adjustments -332 -450 -480 -925 -2,740 -3,705 -3,700
  Veteran and employee benefits 2,455 405 380 480 380 150 165
  Other -1,298 -2,040 -1,185 -1,010 -930 -930 -960
Net adjustments -18,890 -23,310 -23,130 -23,940 -26,355 -28,995 -29,435
Public Accounts-Direct  program spending 78,098 78,980 82,755 86,285 90,335 93,810 97,350
Note: Totals may not add due to rounding.
  • Direct program spending in the National Accounts consists of federal government expenses on goods and services, other transfers to persons, and other transfers to other levels of government, as well as transfers to business and non-residents.
  • A number of adjustments are needed to adjust for classification differences between the National Accounts and Public Accounts, as described in previous sections. These include adjustments relating to the CCTB and GST credit, for example.
  • Other adjustments primarily reflect conceptual differences between the two measures. The Public Accounts include a provision for bad debt expense, primarily relating to tax receivables. The National Accounts measure of net lending records capital acquisitions on an expenditure basis, recognizing them in the year of acquisition, whereas the Public Accounts record them on an accrual basis, recognizing the amortization of all capital assets over their useful life.
  • The National Accounts include direct payments for veterans' disability benefits, whereas the Public Accounts recognize the present value of all expected future payments as a liability. Adjustments are also made to the National Accounts to include employee benefits.
  • Other conceptual adjustments include the elimination of transfers made by arm's-length organizations and the removal of imputed banking service charges. In addition, the latest National Accounts data do not reflect the final year-end fiscal numbers in the 2005 Public Accounts of Canada.

Translation of National Accounts Into Public Accounts

Table A3.18
Average Private Sector Projection of Public Debt Charges
Actual 
2004-05		 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
(millions of dollars)
Average private sector-National Accounts 32,270 32,420 32,810 33,185 33,005 32,965 32,840
  Reclassifications
    Capital lease obligations 165 140 140 140 140 140 140
    Servicing cost and costs 
     of issuing new borrowings		 80 105 105 105 105 105 105
    Total 245 245 245 245 245 245 245
  Timing of payments/accrual 
   adjustments
    Pension interest adjustment -1,365 -1,145 -1,190 -1,230 -1,250 -1,240 -1,190
    Other (veterans pension 
     interest adjustment)		 2,430 2,495 2,530 2,560 2,585 2,575 2,535
    Total 1,065 1,350 1,340 1,330 1,335 1,335 1,345
  Other 542
  Net adjustments 1,852 1,595 1,585 1,575 1,580 1,580 1,590
Average private  sector-Public Accounts 34,122 34,015 34,395 34,760 34,585 34,545 34,430
Note: Totals may not add due to rounding.
  • Two major accrual adjustments are made to the National Accounts projections in order to reconcile the two projections:
  • First, the National Accounts estimate of interest on pension liabilities is adjusted to incorporate returns on pension fund assets and the interest on the average actuarial obligation.
  • Second, the National Accounts record payments for employee benefits, post-employment benefits and veterans' pensions in other program spending, whereas in the Public Accounts, public debt charges include the interest on liabilities for these programs.
  • Other adjustments arise between these series because the latest National Accounts do not reflect the final year-end fiscal numbers in the 2005 Public Accounts of Canada.

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Date Modified: 2008-09-19

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