Research publications

Understanding economic statistics and federal government finances can be complex. Through a series of questions and answers, this HillStudy explores key economic and financial concepts, including production: gross domestic product (GDP); inflation: consumer price index; nominal and real GDP; raw and seasonally adjusted data; accrual and cash-based accounting; financial and calendar year; income distribution and poverty; government accounts; government revenues and expenditures; public service workforce; budgetary balance; financial and non-financial assets and liabilities; and·government debt and accumulated deficit.

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 programs like Equalization and the Canada Health Transfer), as well as federal spending on goods and services to support government operations. This HillStudy examines the distribution of federal revenues and expenditures from 2011 to 2020 by province; data on Canadian territories are excluded from this publication for reasons of scale. The paper concludes that federal expenditures have a clear redistributive effect by transferring resources from more affluent to less affluent Canadians, regardless of province of residence.

The Public Accounts of Canada is an annual report of the Government of Canada’s financial activities for the fiscal year ending each 31 March. It is tabled in the House of Commons to inform Parliament and Canadians about the federal government’s financial operations during the year and the state of its accounts at the close of the fiscal year. It includes consolidated financial statements, summaries of various financial reports, and additional analysis and information.

This HillStudy provides an overview of the distribution of federal government revenues and expenditures among Canada’s provinces between 2015 and 2024, based on Statistics Canada’s provincial and territorial economic accounts. It compares the revenues collected by the federal government in each province with the expenditures allocated to those provinces.

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.