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November 22, 2022GOVERNMENT FINANCIAL STATISTICS, 2021 Statistics Canada has published the latest Consolidated Government Finance Statistics (CGFS) for 2021 including consolidated results for provincial-territorial plus local governments. Statistics Canada's data allows for comparability across jurisdictions, as well as consistency with the government consumption and investment data reported in macroeconomic accounts.
These data are based on the international government financial statistical standard and, as such, may differ in their presentation from similar concepts reported in Public Accounts and other financial statements. CGFS data differ from reports published by governments due to differences in institutional coverage, accounting rules, timing and integration with the Canadian macroeconomic accounts.
The following analysis compares the per capita results for consolidated provincial-and-local governments. Local governments are consolidated into the analysis because each provincial government may assign different responsibilities to municipal or local governments.
Revenues and Taxes
Total revenues per capita vary across the country, with Nova Scotia's provincial-local government revenues amounting to $17,407 per capita in 2021. This was lower than the Canadian average of $17,972 per capita. The highest per capita revenues were in Quebec ($20,303), where the government offers a different mix of public services, including delivering some services that are otherwise delivered by the Federal government (the value of the Quebec abatement to Federal taxes was $717 per capita and is included in revenue figures presented here). The lowest per capita revenues were in Ontario ($16,593).
Although Nova Scotia's provincial-local government revenues were 96.9% of the national per capita average, Nova Scotia's nominal GDP per capita was 79.8% of the national average. Thus, provincial-local government revenues amounted to a larger portion of Nova Scotia's comparatively smaller GDP per capita.
Nova Scotia's consolidated provincial-local revenues rebounded after the first year of the COVID-19 pandemic, rising by $1,473 per capita. Across Canada, consolidated provincial-local government revenues increased by $1,628 per capita with increases in every province. Alberta, Saskatchewan and Newfoundland and Labrador reported the largest growth in provincial-local government revenues per capita in 2021; Prince Edward Island reported the smallest gain.
Taxes and transfers made up the largest portions of provincial-local consolidated government revenues in 2021.
Taxes are typically the largest source of consolidated provincial-local government revenues. Nationally, provincial-local consolidated tax revenues amounted to amounting to $11,001 per capita across Canada. Nova Scotia's tax revenues were $1,913 per capita lower than the national average at $9,088 per capita. The highest provincial-local tax revenues were in Quebec at $12,866 (before the $717 per capita Quebec abatement of Federal taxes).
Beyond taxes and user fees, consolidated provincial-local governments generate revenues from workers compensation premiums, fiscal transfer payments, interest/dividend income, royalties and sales of goods/services. Those provinces that are Equalization recipients report higher fiscal transfer revenues per capita, particularly in the Maritimes and Manitoba.
Provinces with substantial oil and gas sectors (and to a lesser extent hydroelectricity and forestry) report stronger royalty income. Saskatchewan and Quebec also report substantially higher revenues from other sources, though this may include specific items that cannot be classified with others. In Statistics Canada's data, consolidated revenue from sales of goods and services includes tuition fees.
Per capita taxes increased in all provinces from 2020 to 2021, recovering after 7 of 10 provinces reported a decline in 2020. Saskatchewan reported the largest rise in tax revenues.
Tax revenues break down into 8 major categories, including personal income taxes, corporate income taxes, general sales taxes, excise taxes/profits of fiscal monopolies, payroll taxes, property taxes, user fees and other taxes. The amount of revenues generated by these taxes reflects both the tax system itself (tax rates, deductions, credits, number of taxes levied) as well as overall economic conditions.
There are also differences in specific taxes across Canada. Alberta has no general sales tax. Alberta relies more on property taxes and user fees for revenues than most other provinces. Only Newfoundland and Labrador, Quebec, Ontario, Manitoba and British Columbia generate revenue from payroll taxes. Corporate income taxes per capita were higher in Saskatchewan, Ontario and Quebec.
In 2020, Canada's Federal government increased transfers to the provinces to assist with responding to the public health emergency. These transfers decline for most provinces, with the exceptions of Saskatchewan, Nova Scotia, Prince Edward Island and Newfoundland and Labrador.
Expenses
Consolidated provincial-local government expenditures in Canada were $18,239 per capita. Nova Scotia's consolidated provincial-local government expenditures were the lowest at $17,008 per capita, just below Ontario ($17,101) and British Columbia ($17,111). The highest per capita expenditures were in Saskatchewan ($21,814), Quebec ($19,850) and Newfoundland and Labrador ($19,825).
As with consolidated provincial-local government revenues, modest differences in per capita expenditures appear larger when measured relative to GDP per capita, which remained substantially larger in resource-producing provinces.
Consolidated provincial-local government expenditures increased in all provinces from 2020 to 2021, with largest increase (by a substantial margin) in Saskatchewan.
Employee compensation was the largest component across national consolidated provincial-local expenditures, amounting to $7,032 per capita in Nova Scotia ($6,573 nationally). The highest employee compensation expenditures per capita were found in Newfoundland and Labrador and Saskatchewan. The lowest were reported in Ontario and British Columbia.
Purchases of goods and services was the next largest expenditure category with a national average provincial-local government expenditure of $4,647 per capita. Nova Scotia provincial-local purchases of goods and services were $4,927 per capita. Expenditures on goods and services were highest in Alberta and lowest in Prince Edward Island.
Interest expenses depend on net financial liabilities and costs of funds. Across Canada, provincial-local expenditures on interest payments averaged $1,065 per capita while interest costs were $833 per capita in Nova Scotia. The highest interest expenditures were in Quebec, Newfoundland and Labrador and Manitoba. The lowest interest expenditures were in British Columbia and Alberta.
Subsidies (particularly in agriculture) were uneven across the country, with an average of $973 per capita. The highest per capita subsidy payments were in Saskatchewan, where per capita subsidies almost quadrupled in 2021. The lowest subsidies were paid in Newfoundland and Labrador and New Brunswick. Nova Scotia's subsidies per capita were $426 in 2021.
Social assistance and family/employment benefit expenditures per capita were $1,578 per capita across Canada, including notably higher expenditures in Quebec, Ontario and Manitoba. New Brunswick, Prince Edward Island and Nova Scotia ($907 per capita) reported the lowest social benefit expenditures.
Net Operating Balance
The net operating balance of the consolidated provincial-local government sector reflects the difference between revenues and expenses. As this includes local governments, colleges, universities, workers' compensation boards and other entities, it is not comparable to statements of surplus or deficit for Provincial governments as reported in their respective Public Accounts.
In 2021, only Nova Scotia ($400/capita) and Quebec ($453) consolidated provincial-local governments had positive net operating balances. The largest net operating deficits were reported in Saskatchewan (-$1,766) and Newfoundland and Labrador (-$1,587). The consolidated provincial-local government sector reported a deficit of $267 per capita across Canada.
The consolidated provincial-local government sectors in all provinces except for Prince Edward Island reported improvement in net operating balances from 2020 to 2021.
Nova Scotia's consolidated provincial-local government net operating balance has been just below zero since 2008. Over this period, only Quebec and British Columbia have reported stronger average net operating balances.
Net Financial Worth
As with net operating balance, the net financial worth of the consolidated provincial-local government sector includes different entities and accounting treatments than reported by Provincial governments in Public Accounts.
All provinces report negative net financial worth of consolidated provincial-local governments, with an average of -$14,186 per capita across Canada. The three westernmost provinces had the smallest negative net financial worth in 2021, followed by the three Maritime provinces. Nova Scotia's provincial-local government net financial worth was -$10,765 - just behind New Brunswick (-$10,649). The largest negative net financial worth per capita values were reported in Newfoundland and Labrador, Ontario and Quebec.
Net financial worth per capita improved for all provinces in 2021. The largest per capita improvements were reported in New Brunswick and Manitoba; the smallest improvement was in Nova Scotia.
Prior to the improvements in 2021, net financial worth has trended up in recent years in Nova Scotia, the other Maritime provinces and Canada's three large urban provinces (Quebec, Ontario, British Columbia). Net financial worth has been eroding in Canada's three major resource-producing provinces (Alberta, Saskatchewan and Newfoundland and Labrador) as well as in Manitoba.
Statistics Canada. Table 10-10-0147-01 Canadian government finance statistics (CGFS), statement of operations and balance sheet for consolidated governments (x 1,000,000); Table 17-10-0009-01 Population estimates, quarterly; Table 36-10-0222-01 Gross domestic product, expenditure-based, provincial and territorial, annual (x 1,000,000)
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