Canadian Governments as a whole continue to run a surplus for the fiscal year ending March 31,2007, announced Stats Canada today. These groups of government built up a surplus of over $29 Billion which is quite impressive, until you realize that heavy weight on your back is YOU paying that money. The problem we currently have is our free spending parents in the 70’s and 80’s racked up huge deficits in government which then led to HUGE debts, which now have to be paid back (yes I am being facetious here, a little).
Spending increased 4.9% in 2007, a somewhat faster pace than the increase in revenues of 4.7%, reversing the trend of the past few years. During the last five years, expenditures have increased by 25%, slightly lower than the growth rate of 29% in revenues.
The three main components of revenues are income taxes, consumption taxes and contributions to social insurance plans. Combined, they account for over 70% of total revenues.
That answers our questions about where all this money came from. I realize in a Social-Democratic nation like Canada there is an importance in the government and their programs, and a lot of this spending goes into useful things like health care and such, but given the expenditures include payment back of debts owed:
Debt charges represented 7.6 cents out of every dollar of government revenues in 2007, down from 7.9 cents in 2006. This continues the declining trend of the last 10 years.
(this declining is a good thing (in that they are actually paying DOWN the debt, where other nations are not doing this, currently)), but where is this surplus going? Straight onto owed debt or into NEW spending? I hope onto the debt mostly and then onto existing programs like health care.
In other news, if you remember my Thomas The Tank Engine and Financial Planning article, you might also be interested that these same toys have been recalled due to lead being in the paint of some of the engines. My son’s toy collection is now a little smaller, as we have taken away the affected objects. Read more about the Thomas the Tank Engine Toy Recall here.