Research publications

This HillStudy outlines the roles of internal and external audit, how they differ and how they complement one another, with a focus on the federal public sector. In particular, it examines how internal audit can create value and some of the common challenges the internal audit function faces.

The federal government collects revenues and makes expenditures in all provinces. Per capita federal revenues and spending vary from province to province, depending on the economic and demographic conditions in each province. Sources of federal revenues include personal and corporate income tax, the Goods and Services Tax and social insurance contributions. Federal spending encompasses transfers to persons (through the Canada Pension Plan and Employment Insurance, for example), transfers to provinces (through such programs as Equalization and the Canada Health Transfer), as well as federal spending on goods and services to support government operations. The federal government collects revenues from various sources, including income taxes and taxes applied on goods and services in all Canadian provinces. It also spends in each province, including on programs that are widely available to all Canadians, regardless of their province of residence. When the federal government collects more revenues than it spends in a province, the province is considered a net contributor. Conversely, if the federal government spends more than it collects, the province is considered a net recipient. A province's relative economic prosperity is an important factor in determining whether the province is a net contributor or net recipient. This Background Paper provides an overview of the distribution of federal revenues and expenditures in Canada's provinces. Public sector statistics used in this paper are based on Statistics Canada's General Governments, Provincial and Territorial Economic Accounts. These statistics are compiled from the general ledger accounting records of governments and are standardized. They are reconcilable to government public accounts data but differ for several reasons, including the use of calendar year instead of fiscal year.

The federal government has authority over matters related to health and health care derived mainly from its criminal law power for issues related to public health and safety, and from its spending power through which it makes transfers to the provinces and territories, including health transfers. The federal government contributes to the provinces' and territories' public health spending primarily through the Canada Health Transfer (CHT). It can also fund targeted health care directly. It negotiates with each province the amounts to be transferred to them and the use of the funds. In 2017, it granted funding over 10 years to the provinces for home care and mental health initiatives. Approximately 70% of health spending in Canada comes from public funding, and this percentage has remained stable in the last 20 years. The balance of funding comes from private sources, mainly out-of-pocket spending and private insurance. The proportion contributed to public funding by the Canada Health Transfer has risen from 21% in 2012 to 23.5% in 2019. In late 2020, the federal and provincial governments signed the Safe Restart Agreement which provides funding to the provinces to help them deal with future waves of COVID-19 and restart their economies.