Direct Spending

… a core concept in Governance and Institutions and Atlas100

Federal Expenses, 2016-17

Concept description

The Parliamentary Research Bureau (reference below) defines direct spending as taking place “when the federal government allocates money directly to individuals, agencies or municipalities.”

In federations like Canada, direct spending by the federal government is contrasted with two other ways in which the federal spending power can be exercised: grants to provincial governments and the creation of shared-cost programs.

The federal government does not account for its expenditures in precisely these categories but Table 6 (below) of the Annual Financial Report of the Government of Canada for 2016-17 provides a good indication of the magnitudes. The primary expenditure in the grants to provincial government category is “Fiscal arrangements” ($17.1 billion) and the primary expenditure in the shared-cost programs category is “Support for health and other social programs” ($49.4 billion). This leaves the bulk of the rest of the $287.1 billion in “Total program expenses” (i.e., $220.6 billion) in the direct spending category.

The largest categories of direct spending are Transfers to Persons (with “Major transfers to persons” being $90.9 billion), “Other transfer payments” ($41.6 billion), “National Defence” ($25.6 billion), and “All other departments and agencies” ($52.0 billion).

Atlas topic, subject, and course

Federalism (core topic) in Governance and Institutions and Atlas100 Governance and Institutions.

Sources

Karine Richer (2007), The Federal Spending Power, PRB 07-36E, 13 November 2007, Parliamentary Research Bureau, at https://bdp.parl.ca/content/lop/ResearchPublications/prb0736-e.htm, accessed 20 May 2018.

Finance Canada, Annual Financial Report of the Government of Canada
Fiscal Year 2016–2017, at https://www.fin.gc.ca/afr-rfa/2017/report-rapport-eng.asp#_Toc492557458, accessed 20 May 2018.

Page created by: Ian Clark, last modified 20 May 2018.

Image: Finance Canada, Composition of Expenses for 2016-17, at https://www.fin.gc.ca/afr-rfa/2017/report-rapport-eng.asp#_Toc492557458, accessed 20 May 2018.