Estimation of Government Expenditure in Canadian SNA

1. Estimation of Government Current Expenditure on Goods and Services in the Canadian SNA Arthur Berger GDP by Final Expenditure, Shenzhen, China, 25-29 April 2011

2. Government sub-sectors in the Canadian SNA Accounts that include Government Current Expenditure (GCE) in the Canadian SNA Revision cycle GCE estimation in nominal terms Deflation of GCE Outline Statistics Canada • Statistique Canada

3. Federal government Provincial and territorial government Local government Canada Pension Plan (CPP) & Quebec Pension Plan (QPP) Government sub-sectors in the Canadian SNA Statistics Canada • Statistique Canada

4. Supply Use Accounts Income & Expenditure Accounts Accounts that include GCE in the Canadian SNA Statistics Canada • Statistique Canada

5. Annual revisions Once a year, quarterly IEA are revised going back 3 years to align with the most recent supply-use tables Sub-annual revisions Between annual revisions, quarterly IEA is revised within the most recent reference year only Revision cycle Statistics Canada • Statistique Canada

6. Revision cycle: GDP by final expenditure Statistics Canada • Statistique Canada

7. Revision cycle: GDP by final expenditure Statistics Canada • Statistique Canada

8. GCE estimation in nominal terms Statistics Canada • Statistique Canada

9. Divided into budgetary and extra budgetary components Budgetary – accounting system data Extra budgetary- annual and sub- annual financial reports and statements of the extra-budgetary entities (about 100 entities) GCE nominal: Federal government Final annual estimation Statistics Canada • Statistique Canada

10. Total budgetary expenditures Less Spending not on goods and services Transfer payments, Interest on public debt, Intergovernmental transfers, Transfers to extra-budgetary entities = Current and capital budgetary expenditures GCE nominal: Federal government Final annual estimation Statistics Canada • Statistique Canada

11. Extra-budgetary part Transactions in the source documents are analyzed and those that are purchases of goods and services are identified and aggregated GCE nominal: Federal government Final annual estimation Statistics Canada • Statistique Canada

12. Current and capital expenditures – Capital spending + Capital consumption allowances + consumption of FISIM = Gross current expenditure on goods and services Gross current expenditure on goods and services - Sales of goods and services = Net current expenditure on goods and services GCE nominal: Federal government Final annual estimation Statistics Canada • Statistique Canada

13. Budgetary part Similar to final annual estimation except that since the Public Accounts of Canada is not usually available for the most recent year, monthly reports are used. GCE nominal: Federal government Preliminary annual estimation Statistics Canada • Statistique Canada

14. Extra-budgetary part Similar to final annual estimation The main difference is source-data availability; for some extra-budgetary entities, financial statements are not available for the reference year and previous year annual estimates must be projected. GCE nominal: Federal government Preliminary annual estimation Statistics Canada • Statistique Canada

15. Budgetary part: same information source as preliminary annual estimates GCE nominal: Federal governmentQuarterly estimation Statistics Canada • Statistique Canada

16. Extra budgetary part: similar to annual estimation, but not as much data available for some entities. In these cases, the most recent data are projected forward using an average growth rate. GCE nominal: Federal governmentQuarterly estimation Statistics Canada • Statistique Canada

17. Source documents: public accounts of each province and territory for budgetary components and audited financial statements and annual reports of extra-budgetary entities. GCE nominal: Provincial government Final annual estimation Statistics Canada • Statistique Canada

18. Current and capital expenditures – Capital spending + Capital consumption allowances + consumption of FISIM = Gross current expenditure on goods and services Gross current expenditure on goods and services - Sales of goods and services = Net current expenditure on goods and services GCE nominal: Provincial government Final annual estimation Statistics Canada • Statistique Canada

19. Public health and social services: includes hospitals, residential care facilities and other health and social service entities Data sources include Canadian Institute for Health Information (CIHI), Statistics Canada surveys and provincial health ministry records GCE nominal: Provincial Health Final annual estimation Statistics Canada • Statistique Canada

20. Public health and social services: GCE is obtained by summing their operating expenditures. These surveys and records also provide the information to estimate sales of goods and services.  GCE nominal: Provincial Health Final annual estimation Statistics Canada • Statistique Canada

21. Public universities and colleges: expenditures on goods and services as well as sales of goods and services are obtained by Statistics Canada surveys GCE nominal: Provincial post-secondary Final annual estimation Statistics Canada • Statistique Canada

22. Source information: budget estimates, quarterly and monthly financial reports obtained directly from governments and their subordinate entities GCE nominal: Provincial government Preliminary annual estimation Statistics Canada • Statistique Canada

23. For public health, social and universities, and post-secondary education, estimates for the more current years are projected using indicators such as provincial and territorial funding transfers and labour income time series. GCE nominal: Provincial health Preliminary annual estimation Statistics Canada • Statistique Canada

24. Information sources vary widely across jurisdictions: accounting-system information official budget estimates public health, social services, and post-secondary education GCE growth rate is based on labour income GCE nominal: Provincial government Quarterly estimation Statistics Canada • Statistique Canada

25. Information source: Financial reporting system information from municipalities is available from the Internet Primary and secondary public education: data comes from census of provincial and territorial departments of education  GCE nominal: Local government Final annual estimation Statistics Canada • Statistique Canada

26. Sample surveys of information developed for budget estimate some financial statements is used Primary and secondary public education: data comes from survey of provincial departments of education  GCE nominal: Local government Preliminary annual estimation Statistics Canada • Statistique Canada

27. GCE growth rate is based on labour income GCE nominal: Local government Quarterly estimation Statistics Canada • Statistique Canada

28. Administrative expenditures of the Canada Pension Plan and Quebec Pension Plan are obtained from the accounting statements of the plans for both the preliminary and final estimates. GCE nominal: CPP & QPP Annual estimation Statistics Canada • Statistique Canada

29. Quarterly accounting statements of the plans  GCE nominal: CPP & QPP Quarterly estimation Statistics Canada • Statistique Canada

30. For deflation purposes, GCE is broken down into components. The deflation is carried out in three broad segments: compensation of employees; capital consumption allowances; and, all other current expenditures. Deflation of GCE Statistics Canada • Statistique Canada

31. Represents about 60% of GCE Hours worked is used as a measure of volume of labour input. Hours worked is estimated using employment data multiplied by average hours worked per employee Quality change in labour input Deflation of GCE - Compensation of employees Statistics Canada • Statistique Canada

32. Current and constant linear depreciation are calculated by asset type from a perpetual inventory of capital stock model. Deflation of GCE Capital consumption allowance Statistics Canada • Statistique Canada

33. Other non-wage GCE is broken down into four parts: defence medicare hospitals a remainder for all other outlays Combined, they represent about 30% of net government expenditure on goods and services. Deflation of GCE Other nonwage current expenditures Statistics Canada • Statistique Canada

34. Defense: a combination of various material and average hourly earnings indexes Medicare expenditures are deflated using a fee-benefits index for physicians Hospital expenditures are deflated with a fixed-weighted index of commodities used in hospitals. Deflation of GCE Other nonwage current expenditures Statistics Canada • Statistique Canada

35. The remaining portion of GCE is deflated using a base-weighted composite price index covering major operating expenditure categories Prices come mostly form CPI, some from IPPI The weights come from the latest Input-Output Tables. Deflation of GCE Other nonwage current expenditures Statistics Canada • Statistique Canada