Arthur Berger

Arthur Berger

GDP by Final Expenditure, Shenzhen, China, 25-29 April 2011

Estimation of Government Current Expenditure on Goods and Services in the Canadian

SNA

23-04-20Statistics Canada • Statistique Canada2

Outline

1. Government sub-sectors in the Canadian SNA

2. Accounts that include Government Current Expenditure (GCE) in the Canadian SNA

3. Revision cycle

4. GCE estimation in nominal terms

5. Deflation of GCE


Government sub-sectors in the Canadian SNA

Federal government Provincial and territorial government Local government Canada Pension Plan (CPP) & Quebec Pension

Plan (QPP)


Accounts that include GCE in the Canadian SNA

Supply Use Accounts

Income & Expenditure Accounts


Revision cycle

Annual revisions Once a year, quarterly IEA are revised going back 3

years to align with the most recent supply-use tables

Sub-annual revisions Between annual revisions, quarterly IEA is revised

within the most recent reference year only


Revision cycle: GDP by final expenditure

Quarterly IEA annual supply-use

Jan-11

Feb-11 Q1/2010 - Q4/2010

Mar-11

Apr-11 2008 GDP C$

May-11 Q1/2008 - Q1/2011

Jun-11

Jul-11

Aug-11 Q1/2011 - Q2/2011 2008 GDP K$

Sep-11

Oct-11 2008 detail

Nov-11 Q1/2011 - Q3/2011

Dec-11


Revision cycle: GDP by final expenditure

2010 2009 2008

Feb-2011 1st annual estimate

May-2011 2nd annual estimate 3rd annual estimate final annual estimate

May-2012 3rd annual estimate final annual estimate

May-2013 final annual estimate


GCE estimation in nominal terms

“Current” quarterly estimation

Preliminary annual estimation

Final annual estimation

Federal government

Provincial and territorial governments

Local governments

CPP & QPP


GCE nominal: Federal government Final annual estimation Divided into budgetary and extra budgetary

components Budgetary – accounting system data Extra budgetary- annual and sub- annual

financial reports and statements of the extra-budgetary entities (about 100 entities)


GCE nominal: Federal government Final annual estimation

Total budgetary expendituresLess

Spending not on goods and services Transfer payments, Interest on public debt,

Intergovernmental transfers, Transfers to extra-budgetary entities

= Current and capital budgetary expenditures


GCE nominal: Federal government Final annual estimation Extra-budgetary part Transactions in the source documents are

analyzed and those that are purchases of goods and services are identified and aggregated


GCE nominal: Federal government Final annual estimation Current and capital expenditures – Capital

spending + Capital consumption allowances + consumption of FISIM = Gross current expenditure on goods and services

Gross current expenditure on goods and

services - Sales of goods and services = Net current expenditure on goods and services


GCE nominal: Federal government Preliminary annual estimation Budgetary part Similar to final annual estimation except that

since the Public Accounts of Canada is not usually available for the most recent year, monthly reports are used.


GCE nominal: Federal government Preliminary annual estimation Extra-budgetary part Similar to final annual estimation The main difference is source-data availability;

for some extra-budgetary entities, financial statements are not available for the reference year and previous year annual estimates must be projected.


GCE nominal: Federal governmentQuarterly estimation

Budgetary part: same information source as preliminary annual estimates


GCE nominal: Federal governmentQuarterly estimation

Extra budgetary part: similar to annual estimation, but not as much data available for some entities.

In these cases, the most recent data are projected forward using an average growth rate.


GCE nominal: Provincial government Final annual estimation Source documents: public accounts of each

province and territory for budgetary components and audited financial statements and annual reports of extra-budgetary entities.


GCE nominal: Provincial government Final annual estimation Current and capital expenditures – Capital

spending + Capital consumption allowances + consumption of FISIM = Gross current expenditure on goods and services

Gross current expenditure on goods and

services - Sales of goods and services = Net current expenditure on goods and services


GCE nominal: Provincial Health Final annual estimation Public health and social services: includes

hospitals, residential care facilities and other health and social service entities

Data sources include Canadian Institute for Health Information (CIHI), Statistics Canada surveys and provincial health ministry records


GCE nominal: Provincial Health Final annual estimation Public health and social services:

GCE is obtained by summing their operating expenditures. These surveys and records also provide the information to estimate sales of goods and services.


GCE nominal: Provincial post-secondary Final annual estimation

Public universities and colleges: expenditures on goods and services as well as sales of goods and services are obtained by Statistics Canada surveys


GCE nominal: Provincial government Preliminary annual estimation

Source information: budget estimates, quarterly and monthly financial reports obtained directly from governments and their subordinate entities


GCE nominal: Provincial health Preliminary annual estimation

For public health, social and universities, and post-secondary education, estimates for the more current years are projected using indicators such as provincial and territorial funding transfers and labour income time series.


GCE nominal: Provincial government Quarterly estimation

Information sources vary widely across jurisdictions: • accounting-system information• official budget estimates

public health, social services, and post-secondary education GCE growth rate is based on labour income


GCE nominal: Local government Final annual estimation

Information source: Financial reporting system information from municipalities is available from the Internet

Primary and secondary public education: data comes from census of provincial and territorial departments of education


GCE nominal: Local government Preliminary annual estimation

Sample surveys of information developed for budget estimate some financial statements is used

Primary and secondary public education: data comes from survey of provincial departments of education


GCE nominal: Local government Quarterly estimation

GCE growth rate is based on labour income


GCE nominal: CPP & QPP Annual estimation

Administrative expenditures of the Canada Pension Plan and Quebec Pension Plan are obtained from the accounting statements of the plans for both the preliminary and final estimates.


GCE nominal: CPP & QPP Quarterly estimation

Quarterly accounting statements of the plans


Deflation of GCE

For deflation purposes, GCE is broken down into components.

The deflation is carried out in three broad segments: compensation of employees; capital consumption allowances; and, all other current expenditures.


Deflation of GCE - Compensation of employees

Represents about 60% of GCE Hours worked is used as a measure of volume

of labour input. Hours worked is estimated using employment

data multiplied by average hours worked per employee

Quality change in labour input


Deflation of GCE Capital consumption allowance

• Current and constant linear depreciation are calculated by asset type from a perpetual inventory of capital stock model.


Deflation of GCE Other nonwage current expenditures

Other non-wage GCE is broken down into four parts: • defence • medicare • hospitals • a remainder for all other outlays

Combined, they represent about 30% of net government expenditure on goods and services.



Defense: a combination of various material and average hourly earnings indexes

Medicare expenditures are deflated using a fee-benefits index for physicians

Hospital expenditures are deflated with a fixed-weighted index of commodities used in hospitals.



The remaining portion of GCE is deflated using a base-weighted composite price index covering major operating expenditure categories

Prices come mostly form CPI, some from IPPI The weights come from the latest Input-Output

Tables.

Documents

Arthur Berger