Federal government announces major transfer amounts for 2022-23

From: Department of Finance Canada

News release

December 21, 2021 - Ottawa, Ontario - Department of Finance Canada

Today, the Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance, announced the Government of Canada will provide a record $87.6 billion in major transfer funding for provinces and territories in 2022-23. This represents an increase of over $3.7 billion from 2021-22. All provinces and territories will receive a year-over-year increase in total major transfer amounts.

As a result of strong economic growth, the Canada Health Transfer will grow by 4.8 per cent this year. This funding will further help provinces and territories provide their residents with the health services they need. Major transfers also include the Canada Social Transfer, Equalization and Territorial Formula Financing.

In addition to these major transfers, the federal government continues to support provinces and territories in the fight against COVID-19. For instance, the Economic and Fiscal Update proposes investments of $1.7 billion to increase access to rapid testing supplies, $2 billion to improve access to the therapeutics and treatments to reduce hospitalizations, and ensure that there are enough booster shots and pediatric vaccines for all eligible Canadians.  

The federal government is committed to spurring economic growth and new jobs and has committed $30 billion over the next five years to build a Canada-wide high-quality early learning and child care system. This investment will save young families thousands of dollars a year, help parents return to the workforce, and is estimated to raise real GDP by as much as 1.2 per cent over the next two decades. To date, the government has reached agreements with eleven provinces and territories.

Quotes

“Provincial and territorial balance sheets have been sheltered from the pandemic thanks to strong support from the federal government. Substantial federal support, both through direct transfers and through Canada’s COVID-19 support measures, has helped put a floor under provincial and territorial government revenues thereby limiting their deficits and debt. Eight out of every ten dollars provided to fight COVID-19 and support Canadians through the pandemic came from the federal government. This year, the federal government is once again increasing major transfers to provinces and territories to historic highs. It is incumbent on all orders of government to do what is necessary to deliver the support Canadians need to get through this pandemic.”

The Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance

Quick facts

  • Since the start of the pandemic the federal government has invested nearly $20 billion through direct transfers like the Safe Restart Agreement, $2 billion through the Safe Return to Class Fund, $4.5 billion through top-ups to the Canada Health Transfer, and $1 billion for vaccine rollouts. The government also invested $2.2 billion to top up for municipalities through the Canada Community-Building Fund in 2020-21, along with other direct transfers to the provinces and territories.

  • Federal income and business support measures have protected provincial and territorial revenues, with revenues higher due to federal investments to stabilize incomes, protect jobs, and prevent business closures, therefore protecting the tax base and limiting deficits and debt.

  • Major transfers include the Canada Health Transfer (CHT); the Canada Social Transfer (CST); Equalization; and Territorial Formula Financing (TFF).

    • The CHT provides long-term predictable funding for health care and supports the principles of the Canada Health Act. The transfer, made on an equal per capita cash basis, grows in line with a three-year moving average of nominal Gross Domestic Product, with a minimum of 3 per cent per year.
    • The CST is a transfer in support of post-secondary education, social assistance and social services, and early childhood development and early learning and child care.
    • The purpose of Equalization, as set out in the Constitution, is to ensure that provincial governments have sufficient revenues to provide reasonably comparable levels of public services at reasonably comparable levels of taxation. It supports provinces with a lower than average ability to raise revenues. Receiving provinces remain unchanged in 2022-23: Manitoba, New Brunswick, Nova Scotia, Prince Edward Island and Quebec. Equalization is financed by the Government of Canada from general revenues; provincial governments do not pay into the program.
    • TFF helps the three territorial governments fund essential public services and recognizes the high cost of providing those in the North.

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Contacts

Media may contact:

Adrienne Vaupshas
Press Secretary
Office of the Deputy Prime Minister and Minister of Finance
Adrienne.Vaupshas@fin.gc.ca

Media Relations
Department of Finance Canada
mediare@fin.gc.ca
613-369-4000

General enquiries

Phone: 1-833-712-2292
TTY: 613-369-3230
E-mail: financepublic-financepublique@fin.gc.ca

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