Canadian Government Finance Statistics
The Canadian government finance statistics program is designed to measure and analyze the economic dimensions of the public sector of Canada, including its profile. The economic dimensions that are measured consist of revenue, expenditures and the resulting surplus or deficit, financial assets and liabilities and net financial worth or net financial debt position. In order to properly measure the public sector, an up-to-date profile of the public sector universe must be maintained.
The public sector can be divided into two distinct groups. The first is general government, which includes all entities such as government departments, agencies or funds, which political authorities at the federal, provincial, territorial and local levels use to implement government social and economic policies. General government can be broken down into subsectors. Within the government finance statistics system there are five subsectors of government: federal, provincial and territorial, local, Aboriginal and social security funds. The provincial and territorial subsector is further divided into provincial and territorial governments, education institutions (colleges and universities), and health and social services institutions.
The second group of units are government business enterprises, or public corporations. Government business enterprises are legal entities that are created for the purpose of producing goods and services for the market. Government business enterprises are owned by government units. All the profit and financial gain of the government business enterprise flows back to the government unit that owns it.
The inclusion of government business enterprises is useful for analytic purposes. Government business enterprise activities are often an extension of the government fiscal policy. They may generate profits for the general government (or alternatively be a potential source of fiscal risk), protect key resources, provide competition where barriers to entry may be large and provide basic services where costs are prohibitive. Government business enterprises may also significantly impact key macroeconomic objectives such as bank credit, aggregate demand, borrowing abroad, and the balance of international payments.
The strength of the government finance statistics framework lies in the fact that it encompasses a set of interrelated statements that integrate flows and stock positions for different levels of government and government business enterprises. It provides an assessment of the role of government in the economy, helps monitor the impact current government policy and spending have on its stock of assets and liabilities, examines the liquidity of governments and the sustainability of government fiscal policy.
Government finance statistics are useful in helping understand the management of government finances and the effectiveness of policy decisions. They are also closely linked to other macroeconomic frameworks such as the System of National Accounts, balance of international payments and international investment position. This ensures the statistics are comparable to other macroeconomic indicators such as gross domestic product, the balance of payments, household debt, and net worth positions. Government finance statistics allow users to analyze the financial soundness of the government and government business enterprises in the same way that financial soundness and stability are measured in the corporate or household sectors. Government finance statistics also enable users to evaluate whether government decisions are sustainable over the long term, and assess government liquidity constraints as well as financing needs.
This analysis is facilitated through the use of three government finance statistics accounting statements:
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