3 GOVERNMENT SPENDING ON TRANSPORTATION

GOVERNMENT TRANSPORTATION EXPENDITURES

As shown in Table 3-1, transportation expenditures by all levels of government reached about $19.7 billion in 2003/04, an increase of $231 million, or 1.2 per cent from the previous year. Transportation spending by governments on a per capita basis was $620, up 0.3 per cent. Although all levels of government contributed to this growth, the largest increase was by provincial/territorial governments, which increased their net spending by $139 million, or 1.7 per cent. Local governments decreased their net spending marginally by $35 million, or 0.4 per cent. Federal transport expenditures increased by $127 million, or 5.0 per cent, and are expected to increase by $199 million, or 7.5 per cent in 2004/05. All government fees and tax revenues from transport users totalled $15.3 billion, in 2003/04, up 3.0 per cent. Federal non-tax revenues from transport users are expected to decline 3.9 per cent in 2004/05, following a decline of 12.3 per cent in 2003/04. Table A3-1 in the Addendum shows gross and net expenditures on transportation by governments from 1995/96 to 2004/05.

Note: N/A= Not available. More yearly data are available on Transport Canada's Web site (www.tc.gc.ca). Some figures from previous years have been modified and therefore do not match last year's report. Totals may not add up due to rounding.

1. Excludes transfers of $22 million to Crown Corporations not involved in transport in 2002/03 and 2003/04, payments to CATSA and an estimated portion of transfers for Toronto Waterfront Revitalization Project not transport-related.
2. Net of federal transfers as reported by the provinces.
3. Calendar year basis; net of federal and provincial transfers. Revisions of more than $1 billion in 2001/02.
4. Revenues from Coast Guard services and small port users.
5. Federal excise fuel taxes, and provincial motive fuel taxes and licence fees.
6. Forecast at January 31, 2005, of full year.

Source: Main Estimates of the Government of Canada; Transport Canada, Finance Directorate; The Canadian Transportation Agency; internal reports from several agencies and federal departments; provincial/territorial departments of transportation; Statistics Canada, Public Institutions Division, unpublished data

Figure 3-1 shows the trend in spending by level of government from 1996/97 to 2003/04. Net local expenditures have generally risen over this period, while both net provincial/territorial and federal expenditures have had periods of decline. Total government expenditures fluctuated around $17.5 billion until 1998/99 but have trended up in the past five years. Total revenues stayed below $14 billion until 2001/02, after which they have risen.

FIGURE 3-1: GOVERNMENT EXPENDITURES AND REVENUES ON TRANSPORTATION, 1996/97 – 2003/04

Source: Main Estimates of the Government of Canada; Transport Canada, Finance Directorate; The Canadian Transportation Agency; internal reports from several agencies and federal departments; provincial/territorial departments of transportation; Statistics Canada, Public Institutions Division, unpublished data

FEDERAL EXPENSES RELATED TO TRANSPORT FACILITIES AND SERVICES

The Government of Canada operates roads and bridges, airports, harbour/ports and marine navigational and rescue services (Coast Guard). It also provides modal safety, security and policy services. Transport Canada performs several multimodal activities, ranging from security and emergency preparedness to regulating and monitoring the transportation of dangerous goods. As Table 3-2 shows, total direct federal transport expenses in 2004/05 are forecast to increase by 8.5 per cent to reach close to $2.0 billion. These expenses have increased 42 per cent since 2000/01, reflecting the increased spending on safety and security.

Canadian government activities in transportation fall under two broad categories: operations; and safety, security and policy. Expenses related to operations have been fairly constant over the past five years but are expected to increase by $13.4 million (1.5 per cent) in 2004/05 to reach $938 million. Expenditures on safety, security and policy are expected to increase by $130 million (16.4 per cent) to reach $921 million. This is a comparable increase to the previous year. Major increases in recent years are related to commitments to security in the air sector, particularly spending by the Canadian Air Transport Security Authority. Table A3-2 in the Addendum shows expenditures by the federal government from 1996/97 to 2004/05.

Note: More detailed data are available on Transport Canada's Web site (www.tc.gc.ca).

1. Includes expenses for small fishing ports by Fisheries and Oceans Canada.
2. Includes contributions by Transport Canada to the Champlain and Jacques Cartier Bridges, and expenses of the National Capital Commission, Public Works and Government Services Canada, Parks Canada, and Indian and Northern Affairs.
3. Includes expenses of the Civil Aviation Tribunal.
4. Includes expenses for the regulation and inspection of the transportation of dangerous goods, Security and Emergency Preparedness, the Canadian Transportation Agency, and other multimodal safety, policy and analysis. Large increases in 2001/02 related to the purchase of explosives detection equipment.
5. Forecast at January 31, 2005, of full year.

Source: Transport Canada

FEDERAL SUBSIDIES TO TRANSPORTATION

In 2004/05, total federal direct subsidies, grants and contributions are projected to increase by $49 million (6.0 per cent) to reach $856 million. The major source of this increase is highway transfers, which are expected to increase by $96 million to $363 million. Subsidies to the rail mode decreased by $62 million, primarily due to a $73 million drop in payments to VIA Rail. Subsidies to the air mode also declined by $9 million to $37 million. Subsidy payments to the marine mode rose by $4 million to $149 million. Table 3-3 gives more details on these subsidies. Addendum Table A3-3 gives the same information over a greater time series.

Notes: More detailed data are available on Transport Canada's Web site (www.tc.gc.ca).
Transport-related expenditures by regional development agencies have been added, retroactively, to 1996/97. Totals may not add up due to rounding.

1. Includes air carrier assistance of $99 million in 2001/02 and a cabin security enhancement program of $25 million and $3.5 million in 2002/03 and 2003/04, respectively.
2. Includes contributions to the Port Divestiture Fund, a payment of $36 million to the Government of Quebec for the transfer of ferry wharves in 2000/01 and $64 million for the payment of a loan guarantee in 2003/04 and $9 million in support payments in 2004/05 to Ridley Terminals.
3. Includes a payment of $21.4 million to the Hamilton Harbour Commission for the settlement of a civil litigation in 2001/02.
4. Includes $14.2 million in 2004/05 for Regional and Remote Passenger Services
5. Offset federal programs to the elimination of Western Grain Transportation Act Programs.
6. Includes $33 million in 2002/03, $65 million in 2003/04, and $202 million in 2004/05 under the Strategic Highways Infrastructure Program.
7. Includes in 2002/03 and 2003/04 the estimated road and transit portion of the Toronto Waterfront Revitalization Project.
8. Spending included previously under Highway Modes.
9. Includes small amounts not classified elsewhere.

6. Forecast at January 31, 2005, of full year.

Source: Transport Canada; Fisheries and Oceans Canada; provincial/territorial departments of transportation

DISTRIBUTION OF PROVINCIAL/TERRITORIAL AND LOCAL EXPENDITURES BY PROVINCE ¹

In 2003/04, provincial, territorial and local governments spent $17.0 billion on transportation net of transfers from the federal government. This was a $104 million (0.6 per cent) increase over 2002/03. In 2003/04 provincial/territorial governments spent about $438 million more than local governments. Net expenditures of provinces/territories increased by $139 million (1.7 per cent) to $8.3 billion. Local net expenditures, on the other hand, fell by $35 million (0.4 per cent) to $8.7 billion.

While for Canada as a whole, net provincial/territorial expenditures were approximately equal to local expenditures, this is not the case for all provinces. In the Yukon and Northwest Territories and Prince Edward Island, net local spending made up approximately 20 per cent of the combined spending with provincial governments, while in Ontario it made up only 64 per cent.

Net expenditures on transportation by the provincial and local governments in Ontario were the highest of any province or territory, at $5.6 billion, or 33 per cent of the national total. On a per capita basis, the Yukon and the Northwest Territories spent the most, more than $2,000 in 2003/04. Alberta and Prince Edward Island spent the most of the provinces, more than $700. Addendum Table A3-6 gives further details.

Since 1999/2000, provincial/territorial and local governments have spent an average of 2.5 per cent per year more on transportation. Quebec, Saskatchewan and Alberta had the largest average increases, approximately five per cent or more, while New Brunswick, Ontario and Manitoba had average growth rates below the national average.

Federal transfers in 2003/04 were equivalent to 1.9 per cent of transport spending by local and territorial governments. The Yukon and the Northwest Territories were the most reliant on federal transfers, with respectively 23 per cent and 12 percent of its transport spending dependent on federal transfers. New Brunswick followed at eight per cent.

Spending on highways and roads is the most important category of transport-related expenditures for all provinces. In 2003/04, it accounted for about 78 per cent of total net spending by provincial/territorial and local governments. In the Maritime provinces and Saskatchewan, it accounted for over 90 per cent. Nationally, provincial spending and local spending in this category accounted for about 37 per cent and 41 per cent respectively.

Other modes are also significant for some provinces/territories. Marine transportation is important for Newfoundland, where it made up 10 per cent of spending in 2003/04. Spending on air transportation is significant for the northern territories, accounting for 17 per cent of transport spending in the Northwest Territories. Expenditures on transit are important in the most populous provinces, where they accounted for 19 per cent of total expenditures in 2003/04. British Columbia and Ontario reported the largest transit expenditure shares at 20 and 22 per cent, respectively.

¹ Detailed data are available in the Addendum to this report on Transport Canada's Web site (www.tc.gc.ca). Back to text

Government Transportation Expenditures

Total Transportation Revenues by Level of Government

Overview of Expenditures and Revenues by Mode