3 GOVERNMENT SPENDING ON TRANSPORTATION

GOVERNMENT TRANSPORTATION EXPENDITURES

For several years, government expenditures on transportation evolved within a $17 billion to $19 billion range. Table 3-1 shows that transportation expenditures by all levels of government soared in 2002/03 to $19.5 billion, an increase of $1.2 billion or 6.2 per cent from the previous year. All levels of government contributed to the increase. While federal transport expenses in 2003/04 are expected to increase marginally, non-tax revenues from transport users should decline by 4.5 per cent. Combined provincial/territorial and local expenditures increased by $1.0 billion, or 6.2 per cent, in 2002/03. Over the last four years, transportation expenditures by provincial governments have declined by $756 million. Local governments more than made up for this reduction by increasing their spending by $1.4 billion since 1999/2000.

Note: N/A= Not available. More yearly data are available on Transport Canada's Web site (www.tc.gc.ca).

1. Excludes transfers of $22 million to Crown corporations not involved in transport in the last two fiscal years and expenses by CATSA included in other federal expenses.
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, small port users and the airport security charges.
5. Federal excise fuel taxes, and provincial motive fuel taxes and licence fees.
6. Planned and/or actual expenditures.

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departments; Provincial/Territorial departments of transportation; Statistics Canada, Public Institutions Division, Unpublished data

Fees and tax revenues collected by all governments from transport users reached $14.9 billion in 2002/03, up 7.7 per cent over the previous year.

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 services to the regulation and monitoring of the transport of dangerous goods. Table 3-2 shows that total direct federal transport expenses are forecast to reach $1.9 billion in 2003/04, 6.1 per cent more than the previous year. While these expenses declined throughout much of the 1990s, they have risen by 38 per cent since 1999/2000.

These activities can be divided into two broad categories: activities related to operations; and safety, security and policy activities. Expenses related to operations declined in 2003/04 by 1.1 per cent to $927 million. Decreases in federal expenditures on roads and bridges are related to the winding down of a major capital program on the Jacques Cartier and Champlain bridges in Montreal. Expenditures on safety, security and policy are expected to reach $809 million in 2003/04, up 18 per cent from the previous year. Major increases in recent years are related to commitments to security in the air sector.

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, Parks Canada, and Indian and Northern Affairs.
3. Cash basis.
4. Includes expenses of the Civil Aviation Tribunal.
5. Includes expenses for the regulation and inspection of the transport 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.
6. Planned and/or actual.

Source: Transport Canada

FEDERAL SUBSIDIES TO TRANSPORTATION

In 2003/04, total federal direct subsidies, grants and contributions are expected to grow to $805 million, 5.5 per cent or $42 million more than in 2002/03. The major sources of change are highway transfers, which are $21 million higher, and port transfers, which rose by $48 million following the payment of a loan guarantee to Ridley Terminals. Subsidies to the rail mode increased by $6 million. Subsidies to the air mode, on the other hand, fell by $13 million, as higher airport subsidies were not sufficient to offset lower contributions to the Cabin Security Enhancement Program as it was being completed. Table 3-3 presents more details on these subsidies.

Note: More detailed data are available on Transport Canada's Web site (www.tc.gc.ca). Transportrelated expenditures by regional development agencies have been added retroactively to 1996/97.

1. Includes air carrier assistance of $99 million in 2001/02 and a cabin security enhancement program of $28 million 2002/03 and $6 million in 2003/04.
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 to Ridley Terminals in 2003/04.
3. Includes a payment of $214 million to the Hamilton Harbour Commission for the settlement of a civil litigation.
4. Offset federal programs to the elimination of the Western Grain Transportation Act Program.
5. Includes $33 million in 2002/03 and $74 million in 2003/04 under the Strategic Highway Infrastructure Program.
6. Includes in 2002/03 and 2003/04 the estimated road and transit portion of the Toronto Waterfront Revitalization Project.
7. Spending included previously under Highway Modes.
8. Includes small amounts not classified elsewhere.

6. Planned and/or actual.

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

DISTRIBUTION OF PROVINCIAL/TERRITORIAL AND LOCAL EXPENDITURES BY PROVINCE ¹

In 2002/03, provincial, territorial and local governments spent $17 billion on transportation; this was $1.0 billion, or 6.6 per cent, more than in 2001/02. Local expenditures increased by $0.6 billion (6.9 per cent). The provinces/ territories spent $8.1 billion, 5.7 per cent more than in 2001/02 but still below the peak levels of $8.9 billion reached in 1999/2000.

Since 1999/2000, provincial/territorial and local governments have spent, on average, 0.6 per cent per year more on transportation. Quebec, the Northwest Territories and Saskatchewan had the largest relative increases, while Alberta, British Columbia, New Brunswick and Newfoundland and Labrador reported decreasing expenditures.

Federal transfers were equivalent to 1.2 per cent of transport spending by local and territorial governments in 2002/03. The Yukon was the most reliant province/territory on federal transfers, with some 31 per cent of its transport spending dependent on federal transfers. New Brunswick had a 12 per cent dependency on federal transfers.

Spending on highways and roads is the most important category of transport-related expenditures for all provinces, accounting for 39 and 41 per cent, respectively, of all net spending by provincial/territorial and local governments. Other modes are also significant for some provinces/ territories. Remoteness makes spending on air transportation more significant for the Northwest Territories, where it accounted for 18 per cent of transport spending in 2002/03.

Expenditures on transit are significant in British Columbia, Ontario, Alberta and Quebec. British Columbia reported the largest transit expenditure share, with 19.2 per cent in 2002/03. From 1999/2000 to 2002/03, Quebec showed the largest increase in spending ($142 million). Expenditures declined in Ontario over the period, despite additional expenses of approximately $100 million in 2002/03.

Figure 3-1 illustrates the differences in the distribution of modal expenditures between the four most populated provinces and the rest of the country. The most striking difference is in the share of transit expenditures, which reached 17 per cent in British Columbia, Quebec, Ontario and Quebec. In other provinces/territories, the share is less than five per cent. Urban pressure is also illustrated by the share of expenditures on streets in more populous provinces, 42 per cent compared with 34 per cent in the rest of the country. Conversely, the less populated areas of the country spend relatively more on highways than the populous provinces, and spending on air and marine transportation are also more significant, especially in the Northwest Territories.

FIGURE 3-1: MODAL SHARE OF LOCAL AND TRANSPORT EXPENDITURES, 2000/01 - 2002/03

Source: Transport Canada

¹ For more detailed data, see the tables for Chapter 3 in the Addendum 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