ARCHIVED - Canada's Performance 2010-11: The Year in Review

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Section II. Spending Analysis

1. Economic affairs

The Government of Canada continued to undertake initiatives aimed at strengthening Canada's economic position and improving the economic well-being of Canadians. Measures included creating the right climate for business, investing in key sectors of the Canadian economy and in innovation, and managing the environment to support our economy into the future. The government also continued to help Canada's regions and communities thrive, and provided employment opportunities and income support for marginalized groups.

Table 1. Summary of Expenditures for Economic Affairs
(in $billions)

Outcome Areas	2010–11 Planned Spending	2010–11 Actual Spending
Total for Economic Affairs	124.4	122.8
Note: Due to rounding, numbers may not sum exactly to totals.
Income security and employment for Canadians	62.1	63.3
Strong economic growth	20.2	19.6
An innovative and knowledge-based economy	7.5	6.5
A clean and healthy environment	4.9	3.7
A fair and secure marketplace	0.7	0.5
Other expenditures	29.1	29.2

Highlights of the year:

• In 2010–11, 47 federal organizations invested $122.8 billion in Economic Affairs, which accounted for 45 per cent of total government expenditures.
• Two critical expenditures—employment insurance at $19.8 billion and transfers to provinces and territories (excluding the Canada Health Transfer) at $29.2 billion—accounted for 40 per cent of the total spending in this area.
• The implementation of Canada's Economic Action Plan continued into 2010–11. Approximately $25 billion to support economic recovery was delivered in 2010–11. As of March 2011, more than 28,500 Economic Action Plan projects had been completed or were underway across Canada. The Next Phase of Canada's Economic Action Plan is mainly focused on investing in the key drivers of economic growth, such as innovation, investment, education and training. It will seek to foster an environment in which all Canadians contribute to and benefit from a stronger economy.
• Cross-border trade is vital to Canada's economic health. In 2010–11, Canada Border Services Agency processed over 92 million travellers and over 13 million commercial releases.

International comparison

Unemployment rate: In 2009, Canada's unemployment rate was 8.3 per cent, the same rate as the Organisation for Economic Co-operation and Development (OECD) average. This was an increase of 2.2 percentage points over the 2008 rate of 6.1 per cent. According to the International Monetary Fund World Economic Outlook Database, April 2011, Canada's unemployment rate for 2010 decreased to approximately 8 per cent. The graph in Figure 2.1 shows 2010 unemployment rates across G7 countries and estimates unemployment rate levels for 2011 and 2012.

Figure 2.1. Unemployment Rate Across G7 Countries 2010–12

General government financial balances: Government revenues and expenditures illustrate the financial account balance position of the government. For Canada, government revenues, based on 2008 figures, were valued at 39.8 per cent of overall gross domestic product (GDP); government expenditures were valued at 39.7 per cent of GDP. For the United States, by comparison, government revenues were valued at 32.3 per cent of GDP, and government expenditures were valued at 38.8 per cent of GDP. The OECD average for revenues as a percentage of GDP remains at 37.9 per cent; for government expenditures, it is at 41.4 per cent (see OECD Country Statistical Profile: Canada 2010).

GDP growth: GDP in Canada increased at a rate of 3.1 per cent for 2010. By comparison, the real GDP growth rate for the United Kingdom stands at 1.3 per cent; for the United States, it stands at 2.9 per cent. For OECD countries overall, the real GDP growth rate averages at 2.9 per cent (see OECD Country Statistical Profile: Canada 2010), making Canada's rate of growth comparatively strong.

2. Social affairs

The Government of Canada plays a critical role in making Canadians among the healthiest people in the world through modern and effective regulatory systems, innovative partnerships, and leadership in health system renewal, health promotion and disease prevention. The government is also committed to strengthening the justice system by reinforcing Canada's capacity to prevent and combat crime, and it plays an active role in promoting Canada's core values: linguistic duality, ethnic diversity, art, heritage, culture and active citizenship. Other social affairs initiatives include policies and programs that promote sport and physical activity, protect disadvantaged groups, and foster integration and social inclusion.

Table 2. Summary of Expenditures for Social Affairs (in $billions)

Outcome Areas	2010–11 Planned Spending	2010–11 Actual Spending
Total for Social Affairs	56.5	56.6
Note: Due to rounding, numbers may not sum exactly to totals.
Healthy Canadians	31.8	32.6
A diverse society that promotes linguistic duality and social inclusion	9.1	9.4
A safe and secure Canada	12.6	11.2
A vibrant Canadian culture and heritage	3.1	3.4

Highlights of the year:

• In 2010–11, 64 federal organizations invested $56.6 billion in Social Affairs, which accounted for 21 per cent of total government expenditures.
• Budget 2011 announced new measures to improve the quality of life and opportunities of older Canadians and to support culture and communities, including Aboriginal people. It also introduced a new Family Caregiver Tax Credit, which will apply beginning in 2012.
• Food-borne illness outbreaks associated with widely distributed foods cross local, provincial, territorial and international boundaries. In response to the Report of the Independent Investigator into the 2008 Listeriosis Outbreak, the Public Health Agency of Canada led the development of Canada's Foodborne Illness Outbreak Response Protocol (FIORP) 2010 in consultation with provinces, territories, Health Canada and the Canadian Food Inspection Agency. Endorsed by the federal, provincial and territorial Deputy Ministers of Health and Agriculture in 2010–11, FIORP sets out the guiding principles and operating procedures for the identification of, and effective and timely response to, food-borne illness affecting more than one province or territory.

International comparison

Public expenditure on health: According to the OECD, total health spending accounted for 11.4 per cent of Canada's GDP in 2009 compared with an average of 9.5 per cent across OECD countries. Canada's spending on health per person at $4,363 US dollars in 2009 (adjusted for purchasing power parity) was also higher than the OECD average of $3,223 US dollars. Per capita health spending from 2000–09 grew in real terms by 3.7 per cent per year, slightly less than the OECD average of 4.0 per cent (see OECD Health Data 2011: How Does Canada Compare (PDF version 250 kb)).

Life expectancy at birth: In 2009, Canada's life expectancy at birth was 81.2 years, above the OECD average of 79.5 years. Canada's life expectancy at birth is above that of the United States (78.2 years in 2009) and of the United Kingdom (80.4 years in 2009).

Poverty rate: Canada's poverty rate See footnote ² was recorded most recently at 11.4 per cent; the poverty rate of France, Japan and the United States, its G7 partners, was recorded at 7.2 per cent, 15.7 per cent, and 17.3 per cent, respectively. The average poverty rate for OECD countries is 11.1 per cent (see Society at a Glance 2011 - OECD Social Indicators).

3. International affairs

As the host of the G8 Muskoka Summit and the G20 Toronto Summit, Canada played an important role in shaping global actions on the economy and international security in
2010–11. At the G20 Summit, the major economies agreed on the steps needed to reform and strengthen financial systems, and to create strong, sustainable and balanced global growth. The government also supported a number of new initiatives that build upon private sector ideas and resources to address global priorities such as poverty reduction, where Canada is at the forefront of efforts to promote private sector participation.

Working with its allies and the Government of Afghanistan, Canada successfully met its benchmarks for stabilization; the Canadian Forces ended their participation in the combat mission and began the transition to a new training mission. The Canadian Forces' withdrawal from Kandahar Province will be completed by the end of December 2011. The government's newly mandated participation in the North Atlantic Treaty Organization (NATO) Training Mission—Afghanistan (Operation ATTENTION) was a key aspect of planning during 2010–11. The Theatre Activation Team for Operation ATTENTION was deployed; use of Operation ATHENA equipment minimized the acquisition of equipment from Canada. The incremental cost of the current mission in Afghanistan to the Government of Canada from 2001 to 2011 is estimated at $11.3 billion

Table 3. Summary of Expenditures for International Affairs (in $billions)

Outcome Areas	2010–11 Planned Spending	2010–11 Actual Spending
Total for International Affairs	26.1	25.5
Note: Due to rounding, numbers may not sum exactly to totals.
A safe and secure world through international engagement	21.4	20.5
Global poverty reduction through international sustainable development	3.7	4.1
A strong and mutually beneficial North American partnership	0.5	0.5
A prosperous Canada through global commerce	0.5	0.4

Highlights of the year:

• In 2010–11, 18 federal organizations invested $25.5 billion in International Affairs, which accounted for 9 per cent of total government expenditures.
• Following the Muskoka Summit, Prime Minister Stephen Harper announced that the total Canadian contribution for maternal, newborn and child health initiatives will be $2.9 billion over five years. In addition to $1.1 billion in new spending, the government will renew existing funding of $1.8 billion over the next five years for what will be a long-term commitment.
• On February 4, 2011, Canada and the United States announced Beyond the Border: a shared vision for perimeter security and economic competitiveness. This initiative will strengthen Canada's security, trade and regulatory cooperation with the United States; secure the border; and ensure that people and goods can flow freely and safely between the two countries.
• Funded at $178 million in 2010–11, Foreign Affairs and International Trade Canada's Global Peace and Security Fund facilitated timely and effective whole-of-government responses to crises and post-conflict situations. These included recent events in the Middle East and North Africa, and natural disasters in Japan, New Zealand and Pakistan.

International comparison

Foreign direct investment (FDI): Direct investment inside and outside the country is a strong indicator of economic well-being. In 2010, FDI in Canada increased by 2.6 per cent to $561.6 billion Canadian dollars, while Canadian direct investment abroad decreased by 0.7 per cent to $616.7 billion Canadian dollars See footnote ³. For OECD countries in general, FDI inflows averaged $159.2 billion US dollars in 2010, and outflows averaged $253.8 billion US dollars.

Developmental aid: The United Nations and the OECD both expect that countries will contribute a portion of their gross national income (GNI) in the form of official development assistance (ODA). Total net ODA from Developmental Assistance Committee (DAC) donors totalled $129 billion US dollars in 2010, the highest level achieved and an increase of 6.5 per cent over 2009. This represents about 0.3 per cent of the combined GNI of DAC member countries. Canada's ODA contribution as a percentage of GNI in 2010 was 0.3 per cent compared with the United States at 0.2 per cent, the United Kingdom at 0.6 per cent, Australia at 0.3 per cent and Japan at 0.2 per cent.

4. Government affairs

Several federal organizations contribute to Government Affairs by maintaining strong and independent democratic institutions; by creating a federal government that is transparent, accountable, and responsive to its citizens; and by ensuring that government operations are well-managed and efficient. The Government of Canada is also committed to strengthening integrity and accountability in government and political activity.

Table 4. Summary of Expenditures for Government Affairs (in $billions)

Outcome Areas	2010–11 Planned Spending	2010–11 Actual Spending
Total for Government Affairs	11.5	10.6
Note: Due to rounding, numbers may not sum exactly to totals.
Well-managed and efficient government operations	7.4	7.6
A transparent, accountable and responsive federal government	2.9	1.8
Strong and independent democratic institutions	1.2	1.2

Highlights of the year:

• In 2010–11, 37 federal organizations invested $10.6 billion in Government Affairs, which accounted for 4 per cent of total government expenditures.
• Delivering on the commitment announced in Budget 2010, the Government of Canada created the Red Tape Reduction Commission. The Commission will help find effective and lasting solutions to reduce red tape for Canadian small and medium-sized businesses. In the fall of 2011, the Commission will make recommendations to the government to address regulatory irritants and provide options for lasting reforms, while protecting the health, safety and security of Canadians.

International comparison

Government effectiveness: The quality of public services, the civil service, and policy formulation and implementation; the credibility of the government's commitment to policy; and the degree of civil service independence from political pressures all contribute to measuring government effectiveness. Canada's percentile ranking in government effectiveness vis-à-vis other members of the OECD increased from 95.7 in 2008 to 96.7 in 2009.

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