Classification of Government Expenditures

1 - Final expenditure on goods and services

'Government final consumption expenditure' includes the amount of expenditure on consumption goods and services. General government final consumption expenditure consists of expenditure, including expenditure whose value must be estimated indirectly, incurred by general government on both individual consumption goods and services and collective consumption services.

2 - Current transfers to households

'Current transfers from government to households' includes payments such as the Child Tax Benefit Child Tax Credit, Employment Insurance benefits, old age security benefits, welfare payments, scholarships and research grants, workers' compensation benefits, grants to Aboriginal peoples and their organizations, pensions paid under the Canada and Quebec pension plans, and veterans' allowances.

3 - Current transfers to non-profit institutions serving households

'Current transfers to non-profit institutions serving households' refers to transfers received by non-profit institutions serving households from other resident or non-resident institutional units in the form of membership dues, subscriptions, voluntary donations, etc., whether made on a regular or occasional basis. Transfers are intended to cover the costs of the non-market production of non-profit institutions serving households or to provide the funds out of which current transfers may be made to resident or non-resident households in the form of social benefits.

4 - Subsidies

'Subsidies' refers to current unrequited payments that government units, including non-resident government units, make to enterprises on the basis of the levels of their production activities or the quantities or values of the goods or services that they produce, sell or import. They are receivable by resident producers or importers. In the case of resident producers, they may be designed to influence their levels of production, the prices at which their outputs are sold or the remuneration of the institutional units engaged in production. Subsidies have the same impact as negative taxes on production in so far as their impact on the operating surplus is in the opposite direction to that of taxes on production. Subsidies are not payable to final consumers; current transfers that governments make directly to households as consumers are treated as social benefits. Subsidies do not include grants that governments make to enterprises in order to finance their capital formation, or to compensate them for damage to their capital assets, such grants being treated as capital transfers. Included are transfers to public corporations and other enterprises that are intended to compensate for operating losses.

5 - Current transfers to general governments

6 - Current transfers to non-residents

'Current transfers from government to non-residents' includes pensions paid to non-residents, contributions to international organizations and economic and technical assistance as well as food aid provided by the Canadian International Development Agency and other governmental agencies.

7 - Capital transfers

'Capital transfer' refers to unrequited transfers where either the party making the transfer realizes the funds involved by disposing of an asset (other than cash or inventories), relinquishing a financial claim (other than accounts receivable) or the party receiving the transfer is obliged to acquire an asset (other than cash) or both conditions are met.

8 - Interest on debt

'Interest on the public debt' refers to interest payments on liabilities of the government.