Tax Tips for Business Owners

Where Canadian Tax Dollars Go 2012

Where Canadian Tax Dollars Go 2012 – Taxes are just a fact of life sadly and we can argue them all day long. Even if you are pro tax it is very hard to give away that cash! However if your country is running pretty well then you should be happy your taxes are going towards that! As a Canadian, do you actually know where your taxes have been and will be spent? It’s good to know, no matter what side of the fence you are on.

Where Canadian Tax Dollars Go 2012

Where Canadian Tax Dollars Go 2012
Where Canadian Tax Dollars Go 2012

Each province in Canada has different tax needs. Some may need more tax money for public safety (bigger crime in bigger cities). Some may need to update infrastructure (Quebec’s roads are terrible!). Others could be hosting a lot of official events (probably Ottawa) just as some examples. Tax should also be spent on the people and their welfare from health to housing and making sure the streets are lit, paved and everything is orderly. Each year provincialy and federally the numbers have to legally be shared with the public and this ultimately allows us to get a window into where each and every penny in the dollar ends up.

To get an idea of where those pennies actually go it is worth looking at the Federal tax expenditure break downs. We don’t really have enough space in this post to do province by province but you should find that info easy enough on your provinces official government website. So, here is an overview from a Federal point of view for 2010 and 2011 tax expenditure.

58 cents – Transfer payments take up a large portion. These include “Payments that go directly to persons, to provincial and territorial governments, and to other organizations”.

Within this category transfers to persons takes 25 cents which adds up to $68.1 billion and here is a look at that breakdown:

  • Elderly benefits cost about $35.6 billion – roughly 13 cents
  • Employment Insurance (EI) benefits – over 7 cents of every tax dollar spent, $19.9 billion
  • Children’s Benefits. Canada – $12.7 billion – almost 5 cents of every tax dollar spent.

Around 20 cents goes to provincial and territorial governments, this made up about $53 billion last year.

  • The Canada Health – $26.0 billion, almost 10 cents
  • The Canada Social- $11.2 billion for post-secondary education, social programs and programs for children – about 4 cents
  • Equalization and Territorial Formula Financing programs and the gas tax transfers to cities and communities – roughly 6 cents, $15.8 billion
The provincial and territorial governments received around $6 billion towards health care in this category.
14 cents – 14 cents in the dollar last year was spent on some of the following expenses:
  • $6.7 billion in transfers for First Nations and Aboriginal peoples
  • $1.9 billion in assistance to farmers and other food producers;
  • $4.1 billion in foreign aid and other international assistance;
  • $10.5 billion in support for research and development, infrastructure, regional development and assistance to businesses.
  • Other funding went to student assistance programs, health research and promotion, the arts, amateur sports, and multiculturalism and bilingualism.

30 cents – Government operating expenses – Salaries, supplies, travel and more came to about $81.7 billion. This included:

  • 8 cents to defence
  • 3 cents to public safety
  • 3 cents to the Canada Revenue Agency

Things like salaries and benefits, facilities and equipment, and supplies and travel made up 30 cents of each tax dollar spent ($81.7 billion). Close to half of this spending—just over 14 cents of each tax dollar spent—went to just three organizations.

12 cents – Operation of federal departments including:

  • Environment
  • Fisheries and Oceans
  • Health
  • Human Resources and Skills Development
  • Industry
  • Justice
  • Natural Resources
  • Public Works
  • Transport
  • Veterans Affairs
  • Funding also went to federal agencies such as the Canadian Food Inspection Agency, Parks Canada and the Canadian International Development Agency.

1/4 cent – Parliament, the House of Commons, the Senate and the Library of Parliament.

4 cents - Crown corporations (organizations owned directly or indirectly by the government). These include:

  • Canada Mortgage and Housing Corporation, which helps support home ownership and affordable housing — $3.0 billion;
  • Canadian Broadcasting Corporation — $1.8 billion;
  • Atomic Energy of Canada Limited — $1.7 billion and,
  • Canadian Commercial Corporation — $1.6 billion.
  • Funding was also provided to cultural organizations (including the National Gallery of Canada, the Canadian Museum of Civilization and the Canada Council for the Arts), to enterprises like VIA Rail, and to the Canadian Tourism Commission.

11 cents – Public debt charges. Money borrowed by the feds but not yet repaid! Around $30.9 billion.

The dollar in summary for 2010-2011.

  • 14 cents – Other transfer payments
  • 13 cents – Support to elderly
  • 12 cents – Other operations
  • 11 cents – Public debt charges
  • 10 cents – Canada Health Transfer
  • 8 cents – Defence
  • 7 cents – Employment Insurance benefits
  • 6 cents – Other major transfers to other levels of government
  • 5 cents – Children’s benefits
  • 4 cents – Canada Social Transfer
  • 4 cents – Crown corporations
  • 3 cents – Canada Revenue Agency
  • 3 cents – Public Safety
Details sourced from fin.gc.ca
This post is in part based on my post over at The Random Forest.

Where Canadian Tax Dollars Go 2012?

So by taking a look at the previous couple of years I think it is a good picture of what spending will come this year. The budget which will be announced on 29th March supposedly will have no tax increases but I expect to see some spending changes in a few areas.

Canada is still involved in Afghanistan and spending there isn’t likely to shrink much unless a full scale pull out suddenly gets announced (not likely) so expect to see the, so called, defence section rise a little! Public debt charges are likely to rise. In the face of no tax rises there will be many cuts to save money and this could hit government spending seeing a slight shrink in some areas and a few percent off public spending. I would imagine health and welfare to get a slap as they usually do in these times!

What do you think will happen in 2012?

Related: Average Canadian Income

Thanks for reading.

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