Since being elected as your Federal Member of Parliament, many of you have asked me about the federal public transfer payments made to provincial governments and who is responsible for what. Hopefully with this column I can clarify some of the confusion which exists.

Federal Public Transfers represent cash payments that go directly from the Federal Government to individuals, to provincial and territorial governments, and to other organizations. Combined, these payments make up more than half of all federal spending. Last year, these transfers counted for 53 cents of each tax dollar.

As you can see the bulk of transfer payments go directly to individual Canadians and are divided into three major categories which include Old Age Security payments, Employment Insurance payments and Child Tax Benefits payments.

The other categories of payments represent major transfers to other levels of government. These payments, which totalled about $42.5 billion last year, help provinces and territories pay for hospitals and health care (through the Canada Health Transfer (CHT)) and social programs and post-secondary education (through The Canada Social Transfer (CST)). Further major transfers to provinces and territories include the Equalization and Territorial Formula Financing programs.

Equalization payments are designed to help less prosperous provinces so that they can provide public services like healthcare and education that are reasonably comparable across the country. Recently, our Government has honoured that principle by creating a new principle-based equalization program to ensure that “have-not” provinces have enough money to provide public services that are similar to other “have” Canadian provinces. As a result, equalization transfers will increase by almost $700 million next year. A good example of these types of transfers is the “Build Canada” Program which will provide more than $30 billion to provinces and municipalities to build roads, bridges, water supply and sewage systems.

Other transfer programs by various federal departments provide funds to individuals, governments and other organizations and groups for specific public policy purposes. Last year, spending on these federal grants, contributions and subsidies added up to 26.8 billion, or over eleven per cent of each tax dollar. This included about 3.1 billion in assistance to farmers and other food producers; 0.6 billion in gas tax transfers to cities and communities for purposes of environmentally sustainable municipal infrastructure; about 5.1 billion in support for research and development, infrastructure, regional development and assistance to businesses; over 6.3 billion in transfers for First Nations and Aboriginal peoples; more 4.0 billion in foreign aid and other international assistance and 0.7 billion for early learning and child care.

I know this is just a very short primer about the federal transfer payment system, but if you have specific questions, please feel free to give me a call or drop me an email. As your Member of Parliament I am always anxious to hear your comments and concerns and to answer whatever questions you may have.

Until next time,

Bev