Backgrounders Backgrounder: The Estimates Process Backgrounder: Overview of the 2005-2006 Main Estimates Backgrounder: Overview of the 2004-2005 Supplementary Estimates (B) For immediate release February 25, 2005 Ottawa - Reg Alcock, President of the Treasury Board, tabled today in the House of Commons the 2005-2006 Main Estimates and the 2004-2005 Supplementary Estimates (B). "Canadians want and deserve good governance. These Estimates provide greater openness and transparency by providing detailed information on government programs and activities," said Minister Alcock. "Good government is accountable government, focused on public priorities and answerable for its results." 2005-2006 Main Estimates The 2005-2006 Main Estimates seek a total of $187.6 billion, including $185.9 billion in budgetary spending, and $1.7 billion in non-budgetary expenditures for loans and investments. The 2005-2006 Main Estimates support the Government's request to Parliament for authority to spend public funds. They also provide information about adjustments to projected statutory spending that had previously been authorized by Parliament. The tabling of Parts I and II of the 2005-2006 Main Estimates represent the bulk of the government expense plan set out in the November 2004 Economic and Fiscal Update. Parliament will subsequently consider appropriation bills to authorize the spending. Additional spending authority for expenditures that were not sufficiently developed or known in time for the Main Estimates, including measures introduced in Budget 2005, will be sought from Parliament through Supplementary Estimatesduring the 2005-2006 fiscal year. The final stage in the presentation of the Main Estimates to Parliament will be the tabling of the Reports on Plans and Priorities in the spring. These reports are comprehensive departmental documents that provide detailed expenditure plans over a three-year period. Budget 2005 identified nearly $11 billion in savings that will be achieved over the next five years. The overwhelming majority of these saving will come from improved efficiencies in government-wide activities and within departments. The savings will be displayed in the 2005-2006 departmental Report on Plans and Priorities. 2004-2005 Supplementary Estimates (B) The 2004-2005 Supplementary Estimates (B) seek Parliament's approval to spend a total of $1.5 billion on expenditures that were not sufficiently developed or known when the 2004-2005 Main Estimates were tabled. They also provide information to Parliament about reduced forecasts totalling $0.9 billion to projected statutory spending that Parliament has already approved in legislation, for a net Supplementary Estimates of $0.6 billion. Total Estimates for 2004-2005 including 2004-2005 Main Estimates, 2004-2005 Supplementary Estimates (A) and the amounts proposed in these 2004-2005 Supplementary Estimates (B) are within and consistent with the total planned budgetary expense of $185.2 billion for 2004-2005 set out in the Minister of Finance's November 2004 Economic and Fiscal Update. The attached backgrounders provide more detailed information on the Estimates process, as well as an overview of both the 2005-2006 Main Estimates and the 2004-2005 Supplementary Estimates (B). - 30 - For more information, contact: Lise Jolicoeur Press Secretary Office of the President of the Treasury Board and Minister responsible for the Canadian Wheat Board (613) 957-2666 Robert Makichuk Media Relations Treasury Board of Canada Secretariat (613) 957-2391 If there is a discrepancy between any printed version and the electronic version of this news release, the electronic version will prevail. TTY (Telecommunications device for the hearing impaired) ¿ (613) 957-9090 Backgrounder: The Estimates Process The Estimates, along with the Minister of Finance's Budget and Economic and Fiscal Update, reflect the Government's annual budget planning and resource allocation priorities. Each year, the Government prepares Estimates in support of its request to Parliament for authority to spend public funds. This request is formalized through the tabling of appropriation bills in Parliament. The Estimates, which are tabled in the House of Commons by the President of the Treasury Board, consist of three parts: Part I - The Government Expense Plan provides an overview of federal spending and summarizes the relationship of the key elements of the Main Estimatesto the current Expense Plan. Part II - The Main Estimates directly support the Appropriation Act. The Main Estimates identify the spending authorities (Votes) and amounts to be included in subsequent appropriation bills. Parliament will be asked to approve these Votes to enable the government to proceed with its spending plans. Parts I and II of the Estimates are tabled concurrently on or before March 1. Part III - Departmental Expenditure Plans, which are divided into two components: Reports on Plans and Priorities(RPPs)are individual expenditure plans for each department and agency (excluding Crown corporations). These reports provide increased levels of detail on activities and contain information on strategic outcomes, initiatives and planned results, including links to related resource requirements over a three-year period. These documents are normally tabled in the spring. Departmental Performance Reports(DPRs)are individual department and agency accounts of results achieved against planned performance expectations, as set out in respective RPPs. The Departmental Performance Reports cover the most recently completed fiscal year and are normally tabled in the fall. Since the Main Estimatesare prepared well in advance of the beginning of a fiscal year, they do not always include the total expenses that are provided in the most recent Budget. For example, the Main Estimates would not include expenditures for initiatives announced in the Budget that require separate legislation or further development to implement, or that were not known in advance due to budget secrecy, require separate legislation or further development to implement. The Budget also provides for possible adjustments to those major statutory expenses driven by economic or demographic variables that could change during the course of the year such as interest costs on the debt and equalization payments to the provinces. Supplementary Estimates permit these requirements to be met within the overall planned expense levels provided for in the Budget or the Economic and Fiscal Update but not reflected in the Main Estimates. The Estimates, in combination with the subsequent reporting of financial results in the Public Accounts, as well as the results achieved in Departmental Performance Reports and Canada's Performance Report, help Parliament hold the government to account for the allocation and management of public funds. Backgrounder: Overview of the 2005-2006 Main Estimates Part I - The Government Expense Plan Overview The Main Estimates present information on both budgetary and non-budgetary spending authorities. Budgetary Main Estimates Budgetary expenditures include the cost of servicing the public debt; operating and capital expenditures; transfer payments to other levels of government, organizations or individuals; and payments to Crown corporations. These Main Estimates support the government's request for Parliament's authority to spend $66.1 billion under program authorities that require Parliament's annual approval of their spending limits. The remaining $119.8 billion is statutory and the detailed forecasts are provided for information purposes only. Non-Budgetary Main Estimates Non-budgetary expenditures (loans, investments and advances) are outlays that represent changes in the composition of financial assets of the Government of Canada. Voted non-budgetary spending authorities set out in these Estimates amount to $0.1 billion. The remaining $1.6 billion is pursuant to enabling legislation. Table 1: Total Main Estimates 2005-2006 ($ millions) Budgetary Non-budgetary Total Voted Appropriations 66,050.0 84.5 66,134.5 Statutory Authorities 119,813.4 1,605.6 121,419.0 Total Main Estimates 185,863.4 1,690.1 187,553.5 In total, the 2005-2006 Main Estimates have increased by $1.5 billion relative to the 2004-2005 Main Estimates: an increase of $2.6 billion in budgetary spending and a decrease of $1.1 billion in non-budgetary spending. BUDGETARY MAIN ESTIMATES - A net $2.6 billion increase As the Budget is typically tabled in close proximity to the Main Estimates and, given both production and secrecy constraints, not all new expense plans can be reflected in the Main Estimates. This is the case in 2005-2006. While the 2005-2006 Main Estimates represent the major part of the government's spending plans, additional increases to the amounts will be dealt with in Supplementary Estimates later during the fiscal year. Accordingly, these Main Estimates represent the Government's expense plan as announced in its March 2004 Budget as well as further updates provided in its November 2004 Fiscal and Economic Update. The following table compares the budgetary Main Estimates for 2004-2005 and 2005-2006 and reconciles these Main Estimates to the November 2004 Economic and Fiscal Update. Overall, the budgetary expenditures in 2005-2006 have increased by $2.6 billion (from $183.3 to $185.9) relative to the 2004-2005 Main Estimates. Table 2: Budgetary Main Estimates by Type of Payment ($ billions) Main Estimates Change in Spending 2004-2005 2005-2006 $ % Transfer Payments Major transfers to other levels of government: Fiscal Equalization 10.9 9.5 (1.4) -12.8 Canada Health Transfer 12.7 13.0 0.3 2.4 Canada Social Transfer 7.8 8.2 0.4 5.1 Health Reform Transfer 1.5 3.5 2.0 133.3 Territorial governments 1.8 1.8 0.0 0.0 Alternative payments for standing programs (2.6) (2.8) (0.2) 7.7 Youth Allowance Recovery and statutory subsidies (0.6) (0.6) (0.0) 0.0 Sub-total major transfers to other levels of government 31.5 32.6 1.1 3.5 Major transfers to persons: Elderly Benefits 27.9 28.9 1.0 3.6 Employment Insurance 15.5 15.2 (0.3) -1.9 Sub-total major transfers to persons 43.4 44.1 0.7 1.6 Other transfer payments and subsidies 24.1 25.0 0.9 3.7 Total transfer payments 99.0 101.7 2.7 2.7 Payments to Crown corporations 5.4 5.0 (0.4) -7.4 Operating and capital 42.7 43.2 0.5 1.2 Public debt charges 36.2 35.9 (0.3) -0.8 Total Budgetary Main Estimates 183.3 185.9 2.6 1.4 Adjustments to reconcile to the 2004 Economic and Fiscal Update[1] 1.9 9.0 7.1 N/A Total Budgetary Expenses 185.2 194.9 9.7 5.2 The federal government's 2005 Budget Plan, tabled in the House of Commons on February 23, 2005, projected total budgetary expenses of $196.4 billion for 2005-2006. Of that amount, $35.1 billion is for public debt charges and $161.3 billion is for program expenses. Table 3: Budgetary Main Estimates and the 2005 Budget Plan ($ billions) Main Estimates Budget 2005 2005-2006 2005-06 Transfer Payments Major transfers to other levels of government: Fiscal Equalization 9.5 10.9 Canada Health Transfer 13.0 15.5 Canada Social Transfer 8.2 8.2 Health Reform Transfer 3.5 3.5 Territorial governments 1.8 2.0 Canada cities and Communities - 0.6 Atlantic Offshore Agreements - 0.2 Alternative payments for standing programs (2.8) (2.9) Youth Allowance Recovery and statutory subsidies (0.6) (0.6) Sub-total major transfers to other levels of government 32.6 37.5 Major transfers to persons: Elderly Benefits 28.9 29.1 Employment Insurance 15.2 15.7 Sub-total major transfers to persons 44.1 44.9 Total Major Transfer Payments 76.6 82.4 Other Program Spending/Expenses 73.4 78.9 Public debt charges 35.9 35.1 Total Budgetary Main Estimates 185.9 Adjustments to reconcile to the 2005 Budget Plan[2] 10.5 Total Budgetary Expenses 196.4 196.4 [1]Includes adjustments for the impact of accrual accounting, expenditures charged to prior years and an anticipated lapse. It also includes expenses not yet allocated for initiatives which require further development or legislation. Note: Numbers may not add due to rounding. [2] Includes expenses not yet allocated for initiatives which require further development or legislation, adjustments for the impact of accrual accounting, expenditures charged to prior years and an anticipated lapse. Note: Numbers may not add due to rounding. Backgrounder: Overview of the 2004-2005 Supplementary Estimates (B) The 2004-2005 Supplementary Estimates (B) seek Parliament's approval to spend a total of $1.5 billion on expenditures that were not sufficiently developed or known when the 2004-2005 Main Estimates were tabled. Supplementary Estimates also provide information on adjustments to statutory spending that have been previously authorized by Parliament. It is therefore built into the existing fiscal framework. Total Supplementary Estimates ($ millions) Budgetary Non-Budgetary Total Voted Appropriations $1,486.4 $0 $1,486.4 Statutory Authorities $(876.8) $(16.8) $(893.6) Total $609.6 $(16.8) $592.8 Improvements A number of improvements have been made to the form and content of the Supplementary Estimates this year. These changes to the summary tables include: A new table on transfers between organizations; More detailed information on the summary of horizontal items and on the summary of $1 items; and More detailed information on major items. The Government is committed to improving its accountability to Canadians through a better planning process and more comprehensive performance information about the results achieved across Government.
