Government Spending 101 Canada

Government Spending 101 Canada By: Paul Young, CPA, CGAMarch 19, 2016

DisclaimerThis presentation is one opinion of government spending

Paul Young - Presenter

BioCPA/CGA25 years of experience in Academia, Industry and Financial solutionsYoutube Channel - https://www.youtube.com/channel/UCAArky1bAXPSuV2NLtUnyLg

AgendaCanadian DollarHousing StartsRetail Sales by Province Retail Sales by Market SegmentStore Closures

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What is government spendingEducationHealthcareSocial ServicesPensions OAS/CPP/Guarantee Income SupplementUnemployment InsuranceWelfareDefenseForeign AidOther Programs

Government Program Spending/Federally

OAS Security and Guarantee Income supplementEI payments Child Tax Benefits

Canadian Social Transfer Canadian Health TransferEqualization InfrastructureTerritory Fund

MilitaryFirst NationsOther departments/AgenciesForeign AidFarmer SupportBusiness SupportR&D

The remaining elements of program expenses (other transfer payments, Crown corporation expenses, and operatingexpenses of departments and agencies) make up the Governments direct program expenses. Operating expenses ofgovernment departments and agencies, excluding National Defence, made up 17.1 per cent of total expenses in201415. Operating expenses include items such as salaries and benefits, amortization of facilities and equipment,and supplies. Operating expenses of National Defence accounted for 8.4 per cent of expenses. Other transferpayments, which include transfers to Aboriginal peoples, assistance to farmers, students and businesses, support forresearch and development, and foreign aid and international assistance, made up 12.5 per cent of total expenses in201415, and Crown corporation expenses accounted for 2.7 per cent of expenses6

Government Flow Revenue

Revenue $282,346

LessExpenses 280,435

Surplus 1.9B

Government of Canada7

How do Government Expand RevenuesTax HikesTax increases personal and corporate tax hikesHiking consumption taxesNew taxation (carbon taxation)Strong EconomyConsumer Spending (Retail Sales)Higher Corporate ProfitsLow unemployment Strong Exports (Global Trade)

Running DeficitsGovernment spends more money then it collects from taxpayersDeficits cannot be eliminated in on year without deep spending cutsPrivate sector has to pick up the slack as part deficit/debt financingStructural deficits can result when government cannot support its current level spending with current level taxationGovernment can provide a stimulus, but the stimulus has to be targeted at the right programs, i.e. infrastructure money to support exports and/or self-sustaining projects like transit

What do tax hikes mean to CanadiansCorporate Tax hikesCould lead to less FDI as businessHikes in Corporate Tax rate are passed on to Canadians via higher pricesPayroll tax hikesLow after tax incomeLess money to spend on household expensesConsumption Tax hikesIncrease retail prices New TaxationCarbon TaxationAdds to retail priceUser FeesLess money to spend on household expenses

Federal Government deficit plan

Quote: TD Bank

Quote: Scotia Bank

Quote: BMO

http://www.bnn.ca/News/2016/3/1/Liberal-spending-could-add-150-billion-to-national-debt-TD-economists-say.aspx11