How much money does the federal government spend?
In fiscal year (FY) 2022-2023, the Canadian government spent a total of $483.1 billion, down $20.5 billion, or 4.1 per cent, from FY 2021–22. Government expenses peaked in FY 2020-2021 reaching $644.2 billion mainly due to support for businesses and individuals impacted by the pandemic. From 2000-2001 to 2022-2023, spending has increased 2.76 times.
What does the federal government spend money on?
Federal expenses fall into four main categories: transfer payments, other direct program costs, public debt charges, and net actuarial losses.
Transfer Payments
Transfer payments are monetary payments or the transfer of goods and services to third parties including individuals, other levels of government, and crown corporations. It’s the single largest expenditure on the government balance sheets. Transfer payments are divided into five groups:
Major transfers to individuals, including benefits for seniors, Employment Insurance, child support, and COVID-19 income support. Transfers to individuals made up 23.2% of total expenses in 2022-2023.
Major transfers to other governments, such as the Canada Health Transfer and Canada Social Transfer, plus funding for early learning and health agreements. These transfers made up 18.8% of total expenses.
Proceeds from carbon pollution pricing, return funds to the areas where they were collected.
The Canada Emergency Wage Subsidy, which ended in 2021–22, aided eligible employers during the pandemic.
Other transfers include support for Indigenous Peoples, farmers, students, research, and international aid. These transfers accounted for 20.5% of expenses.
Other direct program expenses
Other direct program expenses cover the operating costs of 134 government departments, agencies, and Crown corporations. Examples include Canada Post, the Bank of Canada, the Department of Health, Statistics Canada, and the Canada Border Services Agency. These expenses cover salaries, rent, and inventory, among others. FY In 2022-2023, other direct program expenses made up 26.8% of all expenses.
Public Debt Charges
The category of public debt charges includes interest and other expenses related to servicing the federal government’s debt obligations.
Net actuarial losses
Net actuarial losses include changes in actuarial calculations of investments and assets.
When the government spends more than it collects, it runs a deficit and accumulated deficits are rolled up under the national debt. You can read more about Canada’s deficits and debt here.
You may also like
At the end of fiscal year (FY) 2022-2023, the Canadian federal debt reached $1.17 trillion, up 2 percent or $33 billion from fiscal 2021-2022. The twenty-year period between FY 2002-2003 and FY 2022-2023 saw the federal debt increase 2.32 times.