COLUMN: Where do your federal tax dollars go?

SD&SG MP Guy Lauzon. (Newswatch Group/File)

Constituents often ask me various questions about federal government finances. How much does the federal government spend each year? Where does the money go? I thought this week I would try and supply you with an insight into how your tax dollars are spent. While it can be difficult to summarize and explain in a brief article, here is a quick overview of the expenses.

For the last fiscal year, Canada’s federal government spent $276.8 billion from a variety of revenue sources. That represents roughly 15% of our country’s $1.9-trillion economy.

Transfers payments, which are federal funds that go directly to persons, to provincial governments, and to other organizations, are the largest category of government spending. They compose about 61 cents of each tax dollar spent ($169.4 billion).

Major transfers to individual Canadians cost 26 cents of each tax dollar spent ($72.2 billion). The biggest category in this line item was elderly benefits, which cost about $41.8 billion, or roughly 15 cents of each tax dollar spent. These transfers include Old Age Security, Guaranteed Income Supplement, and the Allowance for Spouses.

Another major transfer to persons is Employment Insurance (EI) benefits. Altogether, EI benefits cost over 6 cents of every tax dollar spent ($17.3 billion).

The final major types of personal transfers are child benefits. The federal government provided $13.1 billion to help families raise their children through the Canada Child Tax Benefit and the Universal Child Care Benefit. These payments cost almost 5 cents of every tax dollar spent.

Major transfers to provincial and local governments totalled $60.5 billion, or 22 cents of each tax dollar spent. These transfers help fund health care, post-secondary education, and other vital programs for Canadians.

The Canada Health Transfer provided $30.5 billion for health programs, representing about 11 cents of each tax dollar spent.

The Canada Social Transfer provided $12.2 billion for post-secondary education, social programs and programs for children, representing close to 5 cents of each tax dollar spent.

Other major transfers, including provincial equalization programs and our Gas Tax Fund program to municipalities, totalled roughly 6 cents of every tax dollar spent ($17.7 billion).

The items listed above account for approximately 70% of the federal government’s annual expenditures. If you are interested in knowing where the additional 30% is spent, please visit ‎my website.

Guy Lauzon
MP, Stormont-Dundas-South Glengarry

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