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GOVERNMENT SPENDING ON TRANSPORTAITON

Government Transportation Expenditures

This section summarizes spending on transportation by all levels of government and their agencies. First, expenditures net of government transfers received from other levels of government are shown, as well as federal government revenues (other than fuel taxes) obtained from transportation users. The federal and provincial governments do not set aside tax revenues from transport users to fund transportation initiatives.

Table 3-1 shows that government expenditures on transportation for the past five years have ranged from $17 billion to $18 billion a year. In 2000/01, transportation expenditures by all levels of government decreased by $478 million, or 2.6 per cent, from their 1999/2000 levels. Federal expenditures reversed the downward trend of previous years with a growth of $11 million, or 0.6 per cent. Federal transport expenses in 2001/02 are expected to increase by 18.9 per cent from the previous fiscal year. Combined provincial/territorial and local expenditures decreased by $489 million, or three per cent in 2000/01. Expenditures by local and provincial governments have showed annual increases of 3.1 per cent and 4.8 per cent, respectively, over the past four years.

Government fees and tax revenues from transport users reached $13.6 billion in 2000/01, a marginal decrease of 0.2 per cent over the previous year.

Federal Expenses Related to Transport Facilities and Services

The federal government provides transportation facilities and services in all modes. As Table 3-2 shows, federal government involvement is observed in airports and harbour/port operations, roads and bridges, modal policy, safety services, and services rendered by the Canadian Coast Guard. Transport Canada also performs several multimodal activities, ranging from security and emergency preparedness services to the regulation and monitoring of the transport of dangerous goods. In 2001/02, direct federal transport expenses were forecast to reach $1.6 billion, an increase of 16 per cent since 1999/2000, after several years of decline.

The Canadian Coast Guard is the federal government's largest single expense in transport, with expected expenditures of $520 million in 2001/02. The federal cost of operating federal ports and airports is expected to reach $225 million in 2001/02. Increases in federal expenditures on road and bridges are related to capital expenditures on the Jacques Cartier and Champlain bridges in Montreal, Quebec.

Federal Subsidies to Transportation

In 2001/02, total federal direct subsidies, grants and contributions are projected to be $828 million, 36 per cent more than in 2000/01. The major source of increases are subsidies to VIA Rail, which rose by $79 million, and the programs to compensate air carriers for the closure of Canadian airspace and to improve airport security after the events of September 11, which reached $189 million. Excluding these programs, federal transfers to transport would have declined by $16 million. Since 1997/98, total subsidies and transfers have fallen by $1 billion. This major reduction is a result of the cessation of payments to NAV Canada and reduced highway transfers. Table 3-3 presents more details on these subsidies.

Distribution of Provincial/Territorial and Local Expenditures by Province

In 2000/01, provincial, territorial and local governments spent $15.9 billion on transportationNote 1. This was $0.4 billion, or 2.4 per cent, less than in 1999/2000. Local expenditures rose by $0.7 billion (14 per cent). Expenditures by the provinces decreased by $1.2 billion (14 per cent), returning to the level of expenditures of 1997/98. The years 1998/99 and 1999/2000 were volatile, in particular for British Columbia, Ontario and Alberta. Exceptional payments were made in British Columbia in 1999/2000. In Ontario, large payments to transit systems in 1998/99 were followed by reduced transfers to local governments and transit authorities in 1999/2000. In Alberta, provincial expenditures rose by two thirds in 1999/2000. In the rest of the country, provincial transport expenditures have been relatively stable, averaging $3 billion over the last three years.

Since 1997/98, transport spending by provincial and local governments has increased on average by four per cent a year. The largest relative increases were recorded in Newfoundland and Alberta. British Columbia, New Brunswick, Manitoba, the Yukon and the Northwest Territories had decreasing expenditures. In Ontario, increased spending by local governments offset the reduction of provincial expenditures.

Federal transfers were equivalent to 1.2 per cent of transport spending by local and territorial governments in 2000/01. This ratio peaked at 5.1 per cent in 1997/98. In 2000/01, the Yukon was the most dependent province/territory on federal transfers, with more than 29 per cent of its transport spending dependent on federal transfers.

Spending on roads and highways is the most important category of transport-related expenditures for all provinces, although other modes are also significant for some provinces. The proportion for road and highway spending ranged from almost 100 per cent in Prince Edward Island to 58 per cent in the Northwest Territories. Remoteness makes spending on air transportation more significant for the Northwest Territories, where it accounted for 18 per cent of transport spending in 2000/01. The relative importance of air transport spending in the territories has varied from year to year, reaching as high as 33 per cent in 1997/98.

Although transit spending in Ontario has fallen by almost $0.5 billion since 1996/97, its 18 per cent share of total transport expenditures makes it the largest transport spender of all provincial and local governments. Local governments have replaced provincial governments as the main source of public transit system expenditures, accounting for 96 per cent. Before 1999/2000, their share of transit spending was 44 per cent. Expenditures on transit are also significant in Quebec, British Columbia and Alberta.

Figure 3-1 illustrates the regional differences in transport spending across Canada from 1998/99 to 2000/01. On the one hand, the territories stand out with transport expenditures three and half times the Canadian average over this period. On the other hand, the variance between the other regions of the country is relatively small, with Atlantic Canada spending 13 per cent less than the Canadian average and the western provinces 20 per cent more. The two central Canadian provinces (Quebec and Ontario) spent nine per cent less than the Canadian average.

GOVERNMENT SPENDING ON TRANSPORTAITON

Government Transportation Expenditures

Total Transportation Revenues by Level of Government

Overview of Expenditures and Revenues by Mode

NOTE

1 Detailed data and sources are available in the Addendum to the Transportation in Canada 2001 Annual Report on Transport Canada's Web site: http://www.tc.gc.ca/pol/en/anre/transportation_annual_report.htm