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21 Tax Memo 1 (1959)

handle is hein.journals/taxmmo21 and id is 1 raw text is: TAX No. 21 MEMO November, 1959 PROVINCIAL FINANCES, 1959-60 The ten provincial governments of Canada expect to spend $2,562 million in 1959-60 and to take in $2,292 million in revenue. The excess of expenditure over revenue will approximate $270 million - about 12 per cent of revenue. Compared with the previous year, expenditures will be up by $283 million (12 per cent) and revenues by only $136 million (6 per cent). As a result the excess of expenditure over revenue will climb by $147 million (120 per cent). All of these figures are exclusive of pro- visions for debt retirement from current account. The provinces will allot an addi- tional $63 million for this purpose in the current year, thereby increasing the excess of expenditures over revenue to $333 million. In the previous year $68 million went to debt retirement from current account. Taxes will account for nearly half of provincial revenues, yielding an estimated $1,108 million in the current year. About 22 per cent of revenues ($508 million) will come from the :federal government. in the form of tax-sharing payments and subsidies. Another 20 per cent ($457 million) will come from privileges, licences and permits. Transportation and communication (mainly highways) will take the biggest slice of provincial expenditures-27 per cent ($696 million). Health and social welfare will account for nearly 26 per cent ($658 million), and education will take 23 per cent ($590 million). Over the past five years, revenues of provincial governments have increased by $880 million, or about 62 per cent. Expendi- tures have jumped by $1,178 million, an 85 per cent increase. As sources of revenue, taxes are now relatively more important and privileges, licences and permits and liquor profits relatively less important than in 1954-55. There has been a slight decrease in the proportion of revenue coming from the federal government. Of the major expendi- tures, outlays for education have increased most since 1954-55 whereas debt charges have declined relatively. Highways, health and social welfare together continue to claim over 50 per cent of total expenditures. Provincial payments to local authorities in 1959-60 will approximate $585 million. Of this sum, $518 million will be in the form of grants-in-aid and shared-cost contributions and the balance will be non-specific pay- ments. About three-quarters of the specific payments go to education. Total payments to local authorities account for almost 23 per cent of all provincial outlays. These are highlights of the more detailed analysis of provincial finances which appears in the following pages. Charts A and B illustrate the provincial revenue and expenditure patterns. Additional copies of this Memo may be obtained on request. CANADIAN TAX FOUNDATION

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