Introduction - 2015–16 Estimates

Purpose

Expenditures made by government require the authority of Parliament. That authority is provided in two ways: annual Appropriation Acts, or Supply Bills, that specify the amounts and broad purposes for which funds can be spent; and other specific statutes that authorize payments and set out the amounts and time periods for those payments. The amounts approved in Appropriation Acts are referred to as voted amounts, and the expenditure authorities provided through other statutes are called statutory authorities.

Estimates documents are prepared to support Appropriation Acts. As such, the Estimates provide additional information on voted amounts included in the Appropriation Act. Forecasts of statutory amounts are also presented to provide a broader context.

Links with the Budget

The Budget Plan is a key policy document of the Government, announcing tax changes, new or enhanced programs and anticipated revenues. It also provides an economic forecast. While the Budget, like a Supply Bill, is also a confidence measure, the Budget does not provide parliamentary expenditure authority.

Given the differences in timing of the preparation of the Main Estimates and the Budget, it is not always possible to include emerging priorities and items announced in the Government's Budget in the Main Estimates. Therefore, to clarify the links between these Estimates and recent funding decisions, this document identifies items announced in a recent federal budget and which appear for the first time in the Estimates. Planned expenditures announced in Budget 2015 will be included in future Estimates documents.

For 2015-16, these Main Estimates present a total of $241.6 billion in planned budgetary expenditures, compared with $264billion in program expenses presented in the 2014 Update of Economic and Fiscal Projections.

The variance of $22.4 billion between these totals is attributed primarily to the treatment of the Employment Insurance Operating Account and the difference in accounting methodology.

The Employment Insurance Operating Account was established in 2009 to record all amounts received or paid out under the Employment Insurance Act. Employment and Social Development Canada is responsible for its stewardship. However, all benefit payments and administration costs are recorded as expenditures of the Account rather than the department's, and are therefore excluded from the departmental planned expenditures presented in Parts I and II of the Main Estimates. Additional information is available in the department's Report on Plans and Priorities on this Account. The forecast of Employment Insurance benefits and revenues is also presented in the 2014 Update of Economic and Fiscal Projections.

The Estimates and Budget use different accounting methodologies. Estimates, with the focus on authority for payments in a fiscal year, are prepared on a near cash basis. The economic forecasts prepared in the Budget and the Update of Economic and Fiscal Projections are prepared on a full accrual basis. The Notes to the Financial Statements of the Government of Canada, which are included in the Public Accounts, provide a more complete explanation of the differences in methodology as well as a reconciliation between the annual results and amounts included in Estimates. Volume II of the Public Accounts presents government expenditures on the same basis as the Estimates, while Volume I provides financial information corresponding to the Budget.

The Estimates Documents

The Estimates are comprised of three parts:

Part I – Government Expenditure Plan – provides an overview of the Government's requirements and changes in estimated expenditures from previous fiscal years.

Part II – Main Estimates – supports the appropriation acts with detailed information on the estimated spending and authorities being sought by each federal organization requesting appropriations.

Parts I and II are included in this volume and, in accordance with Standing Orders of the House of Commons, must be tabled on or before March 1.

Part III – Departmental Expenditure Plans – consists of two components:

Reports on Plans and Priorities (RPP) are individual expenditure plans for each department and agency which provide increased levels of detail over a three-year period on an organization's main priorities by strategic outcomes, program and planned/expected results, including links to related resource requirements presented in the Main Estimates. The RPPs are typically tabled soon after the Main Estimates by the President of the Treasury Board.

Departmental Performance Reports (DPR) are individual department and agency accounts of results achieved against planned performance expectations as set out in respective RPPs. The DPRs for the most recently completed fiscal year are tabled in the fall by the President of the Treasury Board.

Supplementary Estimates support appropriation acts presented later in the fiscal year. Supplementary Estimates present information on spending requirements that were either not sufficiently developed in time for inclusion in the Main Estimates or have subsequently been refined to account for developments in particular programs and services.

Composition of Estimates

The majority of expenditures in 2015–16 will be transfer payments – payments made to other levels of government, individuals and other organizations. Transfer payments make up approximately 61.60% of expenditures or $148.80 billion, operating and capital expenditures account for approximately 27.80% of expenditures or $67.16 billion, while public debt charges are approximately 10.60% of expenditures or $25.62 billion.

Public Debt Charges

Total interest costs are approximately 10.60% of expenditures or $25.6 billion, a projected decrease of $0.7 billion or 2.6% from previous Main Estimates and $0.6 billion more than actual expenditures for 2013–14. The decrease in total interest costs relative to the previous Main Estimates is largely due to an accounting change in 2013–14 relating to bond buybacks, as explained in the Annual Financial Report of the Government of Canada for 2013–14, as well as a decrease in the average Government of Canada long-term bond rate that is used to calculate interest on the public sector pension obligations pertaining to service pre April 1, 2000. Total interest costs are comprised of interest on unmatured debt of $18.0 billion and other interest costs of $7.6 billion. Interest on unmatured debt represents the interest resulting from certificates of indebtedness issued by the Government of Canada that have not yet become due. Other interest costs include interest on liabilities for federal public service pension plans, deposit and trust accounts and other specified purpose accounts.

Major Transfer Payments

Major transfer payments – significant transfers to other levels of government and transfers to persons – account for a large proportion of the government's total expenditure framework. As forecast in the 2014 Update of Economic and Fiscal Projections, major transfer payments are expected to total $148 billion in 2015–16, an increase of $9 billion over the current forecast for 2014–15.

Forecast expenditures for major transfer payments are included in the total budgetary Main Estimates of the responsible organization, with two exceptions. One is Employment Insurance, which is reported through the Employment Insurance Operating Account and is separate from any of the appropriated organizations listed in these Main Estimates. Another exception is "Other Children's Benefits", which are transferred through tax credits (rather than grants or contributions) and are excluded from the cash-based expenditures presented in the Estimates.

As presented in the table, major statutory transfers to other levels of government are projected to total $65.3 billion in 2015–16, an increase of $2.8 billion over the previous year's Main Estimates.

The Canada Health Transfer (CHT) is a federal transfer provided to provinces and territories in support of health care. As of 2014–15, the CHT is distributed on an equal per capita cash basis. In 2015–16, the CHT will increase by $1.9 billion, or 6%, from the 2014–15 amount to a total of $34.0 billion. As legislated in the Jobs, Growth and Long-term Prosperity Act, 2012, the CHT will continue to increase by 6% per year until 2016–17, after which it will grow based on a 3-year moving average of nominal gross domestic product, with funding guaranteed to increase by at least 3% per year. CHT support is subject to the five conditions of the Canada Health Act: universality; comprehensiveness; portability; accessibility; and public administration, and the prohibitions against extra-billing and user fees.

Fiscal Equalization refers to unconditional transfer payments to enable less prosperous provincial governments to provide their residents with public services that are reasonably comparable to those in other provinces, at reasonably comparable levels of taxation. The formula was recently reviewed; changes to the Act were included in the Economic Action Plan 2013 Act, No. 1, and changes to the regulations governing this program came into force in December 2013. These payments will be $17.3 billion in 2015–16, an increase of $0.7 billion from the Main Estimates 2014–15, and $1.2 billion more than 2013–14 actual expenditures. The July 2013 Total Transfer Protection (TTP) payments of $55.8 million are included in the 2013–14 expenditures. TTP was a time-limited measure, provided in fiscal years 2010–11 to 2013–14, in recognition of the challenges faced by provinces during the worst of the global economic downturn. TTP protected individual provinces against year-over-year declines in their total major cash transfers, including prior year TTP amounts.

The Canada Social Transfer (CST) is a federal transfer to provinces and territories in support of social assistance and social services, post-secondary education, and programs for children. For 2015–16, the 3% increase of $377.5 million to $13.0 billion is a result of the 3% annual growth rate legislated in the Jobs, Growth and Long-term Prosperity Act, 2012 for 2014–15 and subsequent years.

Territorial Financing payments, provided through the Territorial Formula Financing (TFF) Program, are unconditional federal transfers that allow territorial governments to provide their residents with public services comparable to those offered by provincial governments, at comparable levels of taxation. The transfers are based on a formula that fills the gap between a proxy of territorial expenditure requirements and a territory's revenue-raising capacity. The formula was recently reviewed; changes to the Territorial Financing section of the Act were included in the Economic Action Plan 2013 Act, No. 1 and changes to the regulations governing this program came into force in December 2013. These payments will be $3.6 billion in 2015–16, $92 million higher than the 2014–15 Main Estimates.

The Gas Tax Fund provides predictable, long-term, stable funding for Canadian municipalities to help them build and revitalize their local public infrastructure while creating jobs and long term prosperity. Beginning in 2014–15, the Gas Tax Fund became a statutory payment. Prior to the 2014–15 fiscal year, payments were approved through Appropriation Acts (Voted). In 2013–14, payments of $2.1 billion were made from the fund.

Additional Fiscal Equalization Payments to Nova Scotia are payments related to its 2005 Offshore Accord. Following the introduction of a new formula for Equalization in 2007, Nova Scotia was guaranteed that, on a cumulative basis beginning in 2008–09 over the lifetime of the Accord, the new formula would not reduce its Equalization payments and 2005 Offshore Accord payments when compared with what the province would have received under the formula that was in place when it signed its 2005 Offshore Accord. Based on the first calculation of 2015–16, Nova Scotia is entitled to an advance payment of $79.3 million in 2015–16, a decrease of $58.9 million when compared to Main Estimates 2014–15. However, the December 2014 official determination of 2014–15 (upon which payments will be made), is $131.2 million, which is reflected in the Supplementary Estimates (C), 2014–15.

The Additional Fiscal Equalization Offset Payment to Nova Scotia is a payment related to its 2005 Offshore Accord. This Accord guaranteed the province that its Equalization payments would not be reduced due to offshore oil and gas revenues that entered the Equalization formula. This is derived by applying the Equalization formula with and without offshore oil and gas revenues and comparing the resulting Equalization payments. For the 2004-05 to 2011–12 period, an upfront payment of $830 million was provided to Nova Scotia in July 2005. This ensured that the province would receive at least that much in Accord compensation over the period. Offset amounts are calculated each year, providing 100% protection from the inclusion of offshore revenues. Beginning in 2011–12, the cumulative draw down exceeded the advance payment. The province is expected to receive $36.8 million for 2015–16, a decrease of $27.2 million compared with the amount for 2014–15.

Wait Times Reduction Funding was part of the 2004 10-Year Plan to Strengthen Health Care, in which First Ministers committed to achieving reductions in wait times in priority areas such as cancer, heart, diagnostic imaging, joint replacements and sight restoration. Budget 2005 committed to a transfer of $5.5 billion for wait times reduction. Of this amount, $4.25 billion was provided to provinces and territories by way of third-party trusts. The remaining $1.25 billion was paid in bi-monthly installments totaling $250 million per year between 2009–10 and 2013–14.

The Payment to Ontario Related to the Canada Health Transfer provided for separate payments to Ontario outside of the Canada Health Transfer (CHT) cash envelope for 2009–10 and 2010–11 to ensure its per capita cash entitlements in relation to the CHT are the same as for other Equalization-receiving provinces. The payment for 2009–10 of $489 million was a legislated fixed amount, whereas the payment for 2010–11 was formula-based, and payments were re-calculated along with each new CHT estimate. In all there were five calculations. Each recalculation was based on updated personal income tax data received from the Fiscal Policy Division of Finance Canada and the Canada Revenue Agency. The final calculation for this program was made in September 2013. The payment for 2010–11, including all adjustments, was $246.2 million. The amount shown in 2013–14 represents the impacts of the final official recalculation.

The Youth Allowance Recovery relates to tax points transferred to the province of Quebec for the Youth Allowance program, which has since expired. The equivalent value of the tax point reduction is recovered each year from the province of Quebec. The change in recoveries for the Youth Allowances Recovery Program is entirely due to year-over-year changes to the value of federal personal income taxes, the recovery being a percentage of these taxes. For 2015–16, the forecast recovery of $853 million is $37.1 million higher than the initial 2014–15 forecast in Main Estimates and $46.6 million higher than the forecast in the 2014–15 Supplementary Estimates (C) due to higher forecast levels of federal personal income taxes.

Alternative Payments for Standing Programs represent recoveries from Quebec of an additional tax point transfer above and beyond the tax point transfer traditionally computed under the Canada Health Transfer, the Canada Social Transfer and the Youth Allowances Recovery. The change in recoveries for the Alternative Payments for Standing Programs is entirely due to year-over-year changes to the value of federal personal income taxes, the recovery being a percentage of these taxes. For 2015–16, the forecast recovery of $3.9 billion is $169.7million higher than the forecast in the 2014–15 Main Estimates and $210.8 million higher than that in 2014–15 Supplementary Estimates (C) due to higher forecast levels of federal personal income taxes.

Transfers to Persons

Elderly benefits include Old Age Security, Guaranteed Income Supplement, and Allowance payments. Elderly benefit payments are expected to be $46.1billion in 2015–16, an increase of $1.9billion over the 2014–15 Main Estimates and $4.3billion more than actual expenditures in 2013–14.

Universal Child Care benefits provide families with resources to support childcare choices, and are paid to families in monthly instalments of $100 per child under the age of six. Universal child care benefit payments are forecast by Employment and Social Development Canada to be $2.9billion in 2015–16, an increase of $32.4million over the 2014–15 Main Estimates and $111.3million more than actual expenditures in 2013–14.

"Other Children's Benefits" include the Canada child tax benefit – a tax-free monthly payment made to eligible families to help them with the cost of raising children under age 18–and are transferred through tax credits, as well as enhancements to the Universal Child Care Benefit which are subject to parliamentary approval.

Employment Insurance provides temporary financial assistance to unemployed Canadians who have lost their job through no fault of their own, while they look for work or upgrade their skills. Employment Insurance is reported through the Employment Insurance Operating Account and is separate from any of the appropriated organizations listed in these Main Estimates.

Votes

The basic structural units of the Estimates are the Votes. The following kinds of Votes appear in the Estimates:

A program expenditures vote is used when there is no requirement for either a separate "capital expenditures" vote or a "grants and contributions" vote because neither equals or exceeds $5 million. In this case, all expenditures are charged to the one vote.

An operating expenditures vote is used when there is also a requirement for either a "capital expenditures" vote or a "grants and contributions" vote or both; that is, when expenditures of either type equal or exceed $5 million. Where they do not, the appropriate expenditures are included in the "program expenditures" vote.

A capital expenditures vote is used when the aggregate of capital expenditures equal or exceed $5 million. Capital expenditures are those made for the acquisition or development of items that are classified as tangible capital assets as defined by Government accounting policies. For example, the acquisition of real property, infrastructure, machinery or equipment, or for purposes of constructing or developing assets, where an organization expects to draw upon its own labour and materials, or employs professional services or other services or goods. Expenditure items in a Capital Expenditures Vote are for items that generally exceed $10,000; although an organization may select a reduced threshold to be applied to different capital classes.

A grants and contributions vote is used when grants and/or contributions expenditures equal or exceed $5 million. It should be noted that the inclusion of a grant, contribution or other transfer payment item in the Estimates imposes no requirement to make a payment, nor does it give a prospective recipient any right to the funds. It should also be noted that in the vote wording, the meaning of the word "contributions" is considered to include "other transfer payments" because of the similar characteristics of each.

A non-budgetary vote, identified by the letter "L", provides authority for spending in the form of loans or advances to, and investments in, Crown corporations; and loans or advances for specific purposes to other governments, international organizations or persons or corporations in the private sector.

Where it is necessary to appropriate funds for a payment to a Crown corporation or for the expenditures of a legal entity that is part of a larger program, a separate vote is established. Where this is the case, a separate vote structure is established for each. A legal entity for these purposes is defined as a unit of government operating under an Act of Parliament and responsible directly to a Minister.

To support the Treasury Board in performing its statutory responsibilities for managing the government's financial, human and materiel resources, a number of special authorities are required. These authorities are described in the vote wording found in the Proposed Schedules to the Appropriation Bill.

Information Presented in the 2015–16 Main Estimates

Departments and agencies are presented alphabetically according to the legal name of the department or agency. For some organizations, the legal name differs from the name in common usage. In such cases, their commonly-used name is noted in their raison d'être.

Forecast statutory expenditures are summarized in this document. Details are available in the 2015–16 Statutory Forecasts online table.

Abbreviated vote wordings are used in organization summaries. Complete vote wording is shown in the Proposed Schedules to the Appropriation Bill following Part II.

Information on 2013–14 actual expenditures and 2014–15 Estimates to Date are included to provide context for the 2015–16 amounts. The 2013–14 actual expenditures are taken from the 2013–14 Public Accounts of Canada. 2014–15 Estimates to Date is the sum of the amounts presented in the 2014–15 Main Estimates and increases sought through the 2014–15 Supplementary Estimates A, B and C. Estimates to date excludes any funding deemed to have been appropriated to a department following the transfer of a portion of the federal administration. Allocations from Treasury Board Central Votes are made throughout the year and the expenditure authority provided by these allocations is also not included in Estimates to Date.

The 2015–16 Program Alignment Architecture is used for the tables presenting information by Strategic Outcome and Program. If there has been a change in the Architecture, amounts for previous years have not been reclassified to the new structure and are reported as "Funds not allocated to the 2015–16 Program Alignment Architecture".

If applicable, a table provides a listing of transfer payments planned for the 2015–16 fiscal year, with comparative amounts from previous fiscal years for programs with funding in 2015–16. A transfer payment is a grant, contribution or other payment made for the purpose of furthering program objectives but for which no goods or services are received. Details on transfer payments made in a previous year can be found in Volumes 2 and 3 of the Public Accounts of Canada.

Supplementary online tables for the 2015–16 Main Estimates show forecast expenditures by:

• Standard Object: the table shows the types of goods or services to be acquired, or the transfer payments to be made and the revenues to be credited to the vote; and,
• Strategic Outcome and Program: planned expenditures are classified under the 2015–16 Program Alignment Architecture. If there has been a change in the Architecture, amounts for previous years have not been reclassified to the new structure.

In-year information on expenditure authorities is available in departmental Quarterly Financial Reports, and final expenditure authority and actual expenditures for a fiscal year are reported in the Public Accounts of Canada. The Treasury Board Secretariat (TBS) InfoBase also provides financial and people management data for all organizations that receive government appropriations.

Changes to Government Organization and Structure

Following the tabling of the 2014–15 Main Estimates on February 27, 2014 and pursuant to the Public Service Rearrangement and Transfer of Duties Act, these changes were made.

Supplementary Estimates (A), 2014–15:

• Orders in Council P.C. 2012-1350 and P.C. 2012-1352 impact the Windsor-Detroit Bridge Authority.
• Orders in Council P.C. 2014-142 and P.C. 2014-146 impact The Jacques-Cartier and Champlain Bridges Inc.
• Order in Council P.C. 2014-144 impacts the Office of Infrastructure of Canada.

Supplementary Estimates (B), 2014–15:

• The Economic Action Plan 2014 Act, No. 1 and Order in Council P.C. 2014-1106 create the Administrative Tribunals Support Service of Canada.

Supplementary Estimates (C), 2014–15:

• The Economic Action Plan 2014 Act, No. 1 dissolves Enterprise Cape Breton Corporation and transfers their duties to Atlantic Canada Opportunities Agency and Public Works and Government Services Canada.

These Main Estimates:

• Order in Council P.C. 2014-911 impacts Canadian Heritage and Canadian Museum of History.
• Order in Council P.C. 2014-922 transfers the Commissioner of Canada Elections from the Chief Electoral Officer to the Office of the Director of Public Prosecutions.
• The Economic Action Plan 2014 Act, No. 1 and Order in Council P.C. 2014-1106 also impact the Canada Industrial Relations Board, Canadian Human Rights Tribunal, Canadian International Trade Tribunal, Registry of the Competition Tribunal, Registry of the Public Servants Disclosure Protection Tribunal, Registry of the Specific Claims Tribunal, Transportation Appeal Tribunal of Canada and Public Service Labour Relations and Employment Board.
• The Economic Action Plan 2013 Act, No. 2 and Order in Council P.C. 2014-1107 create the Public Service Labour Relations and Employment Board by combining the Public Service Staffing Tribunal and Public Service Labour Relation Board.
• Order in Council P.C. 2014-1295 changes the name of Royal Canadian Mounted Police Complaint Commission to the Civilian Review and Complaints Commission for the Royal Canadian Mounted Police.

Changes in Voted Authorities

This sub-section lists Votes which contain specific authorities that differ from those included in the previous year's Main Estimates as well as new expenditure authorities appearing for the first time. In light of the House of Commons Speaker's rulings in 1981, the government has made a commitment that the only legislation that will be enacted through the Estimates process, other than cases specifically authorized by Statute, will be previous Appropriation Acts.

Correctional Services of Canada

Vote 1 wording was modified by replacing "…aux détenus élargis…" by "…aux détenus libérés…" in paragraph ( c) in the French version only and by removing paragraph ( e).

Foreign Affairs, Trade and Development

Vote 1 wording was modified by replacing "…to the staff of such officials…" by "…to the staff of those officials…" in the English version only.

Natural Sciences and Engineering Research Council

Vote 1 wording was modified by removing "and, pursuant to paragraph 29.1(2)( a) of the Financial Administration Act, authority to expend revenues received during the fiscal year, to offset expenditures incurred in the fiscal year, arising from the provision of internal support services to other organizations".

Social Sciences and Humanities Research Council

Vote 1 wording was modified by removing "and, pursuant to paragraph 29.1(2)( a) of the Financial Administration Act, authority to expend revenues received during the fiscal year, to offset expenditures incurred in the fiscal year, arising from the provision of internal support services to other organizations".

Transport

Vote 5 wording was modified by removing "including contributions to provinces or municipalities or local or private authorities towards construction done by those bodies".