February 25, 1937

PERCENTAGE DISTRIBUTION OF REVENUES AND EXPENDITURES. 1936-37


(000 omitted) Revenues Amount (estimated) Percentage of total Revenues Percentage to total ExpendituresOrdinary Revenue- Income Tax $102,000 22-56 18-91Customs Duties 81,500 18-03 15-11Excise Duties 45,500 10-06 8-43Sales Tax 115,500 25-55 21-41Manufacturers', importation, stamp taxes, etc 38,100 8-42 7-06Other tax revenues 2,018 *45 [DOT]37Total Revenue from taxes $384,618 85-07 71 29Non-tax Revenues 58,770 13-00 10-89Total Ordinary Revenues $443,38S 98-07 82-18Special Receipts and Credits 8,125 1-80 1 50Other Receipts and Credits- Refunds of capital expenditures and receipts on nonactive accounts 610 [DOT]13 [DOT]12Grand Total Revenues $452,123 100-00 83-80 The Budget-Mr. Dunning



PERCENTAGE DISTRIBUTION OF REVENUES AND EXPENDITURES, 1936-37-Concluded (000 omitted) Expenditures Amount (estimated) Percentage of total Expenditures Percentage to total Revenues Ordinary Expenditures- Interest on public debt $137,405 25-47 30-39 Cost of loan flotations- Amortization of bond discount, etc 3,900 [DOT]72 [DOT]S6Charges of management 197 [DOT]04 [DOT]05Total public debt charges $141,502 26-23 31-30Subsidies and special grants to Provinces $ 16,994 315 3-76Old Age Pensions 22,500 4-17 4-98Civil Servants' Pensions and Superannuation charges.. 2,822 [DOT]52 [DOT]62Pensions and after-care of soldiers- Pensions, War and military $ 43,092 7-99 9-53Treatment, and after-care of returned soldiers.... 12,041 2-23 2-66Total $ 55,133 10-22 1219Agriculture $ 8,929 1-66 1-97Fisheries 1,750 *32 [DOT]39Legislation 2,626 [DOT]49 [DOT]58Mines and Resources 12,701 2-35 2-81National Defence (including Civil Aviation) 23,497 4-36 5-20Post Office 32,417 600 7-17Public Works 14.643 2-71 3-24Transport 13,329 2-47 2-95All other 43,017 7-98 9-51Total Ordinary Expenditures S391,860 72-63 86-67Capital Expenditures- Canals $ 52 [DOT]01 [DOT]01Railways 217 *04 [DOT] 05Public Works 3,178 [DOT]59 [DOT]70Total Capital Expenditures $ 3,447 [DOT]64 [DOT]76Special Expenditures- Unemployment Relief and Assistance Act, 1936- Grants-in-Aid to Provinces $28,930 5-36 6-40All other assistance 17,134 3-18 3-79Total $46,0G4 8-54 10-19Drought area relief $ 9,741 1-81 215Dominion projects (special supplementary estimates) 24,624 4-56 5-45Total Special Expenditures $80,429 14-91 17-79Government Owned Enterprises- Losses charged to Consolidated Fund- Canadian National Railways *. $43,303 802 9-58National Harbours Board 250 *05 [DOT]06Loans and Advances Non-active- National Harbours Board and Canadian National Steamships 919 [DOT]17 [DOT]20Total Government Owned Enterprises $44,472 8-24 9-84Other Charges- Write-down of assets to Consolidated Fund $ 545 *10 *12Write-down of Active assets to non-active assets 18,765 3 48 415Total Other Charges $ 19,310 3-58 4-27Grand Total Expenditures $539,518 100-00 119-33 (Mr. Dunning.] The Budget-Mr. Dunning


OVER-ALL DEFICIT, 1936-37


Taking the total revenues for the year at $452,123,000 and the total expenditures at $539,518,000, it is apparent that there will be an over-all deficit for the fiscal year of


SS7,395,000.


This, of course, takes into account the railway deficit as well as other expenditures for which the government is responsible. It compares with a total deficit last year of $159,989,000. It is better than the figure of 100 millions deficit which I set as our goal in the budget last year. If we make allowance for the abnormal write-off of $18,765,000 which relates to the activities of previous years and also for the special receipt of $8,000,000 from the wheat board, it is indeed a very much better showing than we estimated a year ago. But while we have succeeded in cutting last year's deficit nearly in half, and while we are able to show a substantially smaller deficit than in any year since 1930-31 when the deficit was approximately the same as for this year, I think it will be realized by all members of the house that the gap between our total income and our total outgo is still very broad and that it must be bridged at the earliest possible date.


LOANS AND INVESTMENTS ACTIVE ASSETS


In addition to provision for the expenditures of the year as outlined, account should also be taken of loans and investments made which we regard as active assets in the public accounts. For the year such loans and investments are estimated at $36,785,000, excluding loans that may be made to provinces between February 15, 1937, and the close of the fiscal year on March 31. Loans to Provinces Loans made to the four western provinces which are the most important item in this category have shown a marked decrease during the present year. The Unemployment Relief and Assistance Act of 1936 restricted such assistance to a maximum amount measured by the provincial share of the cost of unemployment relief and undertakings during February and March, 1936, and under any agreements entered into pursuant to the act. Moreover, the act contemplated that any province desiring such assistance should establish the necessity therefor, and in practice we have required the submission of detailed statements of the financial position of the province. Up to February 15, 1937, the net loans made under this authority have amounted to $10,892,235 as compared with $42,304,150 made during the preceding fiscal year. As of this date, loans made to the four western provinces under authority of the various relief acts were outstanding in the dominion's books to an aggregate amount of $127,419,400. The totals for the various provinces were as follows: Manitoba, $19,415,855'; Saskatchewan, $51,898,717; Alberta, $25,759,748; and British Columbia, $30,345,080. It will be understood these figures relate to totals outstanding prior to the write-off referred to previously. I desire to place on Hansard tables showing the net loans made to each province during each of the last six fiscal years, and a classification of such loans on the basis of the general purpose for which the loans were obtained.


NET LOANS TO PROVINCES UNDER RELIEF ACTS BY FISCAL YEARS


- Manitoba Saskat- chewan Alberta British Columbia Total$ $ s $ $1931-32 2,788,812 10,934,341 4,097,740 4,813,124 22,634,0171932-33 5,171,904 7,578,556 1,902,041 912,636 15,565,1371933-34 2,273,283 5,469,240 4,050,743 1,321,761 13,115,0271934-35 2,874,631 10,141,014 1,926,476 7,966,714 22,908.8351935-36 2,396,226 14,245,478 13,104,000 12,5.58,445 42,304,1491936-37 (to Feb. 15, 1937) 3,911,000 3,530,088 678,748 2,772.399 10,892,235Net Loans Outstanding 19,415,856 51,898,717 25,759.748 30,345.079 127,419,400 The Budget-Mr. Dunning


NET LOANS TO PROVINCES UNDER RELIEF ACTS CLASSIFIED AS TO PURPOSE


- Loans specifically to meet maturing obligations and interest Loans specifically for agricultural relief including purchase of seed grain Loans for Provincial purposes generally including public works and direct relief Total$ $ $ s1,139,455 3,934,341 8,577,000 11,190,509 243,400 13,892,633 3,152,748 18.033.000 34,071,743 14.030.000 19,154,571 19,415,855 51,898,717 25,759,748 30,345,080 24,841,305 17,288,7S1 85,289,314 127,419,400


OTHER LOANS AND INVESTMENTS


Loans to Canadian National Railways for miscellaneous debt retirements, less repayments, already referred to, amounted to $4,614,000. Purchase of railway equipment for the Canadian National Railway amounted to $2,863,000 and for the Canadian Pacific Railway Company to $2,303,000. In addition, $555,000 was loaned to the latter company for railway betterment expenditures in connection with the government's unemployment relief program. During the fiscal year the government's purchases of Canadian Farm Loan Board 3J per cent bonds will amount to $11,100,000, and of the board's capital stock to $794,000. The total investment by the government of Canada in the farm loan board will reach approximately $28,684,000 at the close of the present fiscal year. The amount paid out by the government on loans approved under the terms of the Dominion Housing Act is expected to total $1,218,000 during the current fiscal year. The dominion's share of such loans represents 20 per cent of the lending value of each property financed under the act, and is paid out from time to time as required after loans are approved. During the year, $323,000 was advanced to the harbour commissions at Montreal and Vancouver. These loans are considered as active assets, as both commissions have paid a substantial part of the interest accrued on their obligations held by the government. Under authority of the Bank of Canada Act Amendment Act, the government purchased 102,000 shares of class B stock of the Bank of Canada, representing an investment of $5,100,000. Repayments of $2,977,000 were received during the year in reduction of soldier loans and loans to provinces for housing purposes. The following is a statement of the amount of loans and investments made during the last fiscal year, which are regarded as active assets, and the comparable figures for the four preceding years:



The Budget-Mr. Dunning


LOANS AND INVESTMENTS, ACTIVE


(000 omitted) - 1932-33 1933-34 1934-35 1935-36 (Estimated 1936-37)Canadian National Railways .. Canadian Pacific Railway Canadian Farm Loan Board Dominion Housing Act, Loans disbursed... Harbour Commissioners... Provinces-under relief legislation Provinces-housing Railway equipment purchased Soldier and general land settlement Bank of Canada-Purchase of class "B" shares Other $ 14,677 871 650 15,565 Cr. 139 Cr. 92 469 $ 2,628 416 1,677 13,115 Cr. 213 Cr. 2,492 $ 16,579 353 393 22,909 Cr. 397 Cr. 571 $ 3,689 1,270 7,933 82 1,438 42,304 Cr. 3,003 7,244 Cr. 1,054 $ 4,614 555 11,894 1,218 323 10,892 Cr. 2,038 5,166 Cr. 939 5,100 32,001 15,131 39,266 59,903 36,785


LOAN FLOTATIONS


During the fiscal year under review dominion obligations were issued to the amount of $3S2,996,000. In the case of treasury bills which have a three months' maturity and are refunded as they mature each fortnight, only the increase in the total outstanding during the year is included in the above figure. These issues, to the extent of $311,000,000 were for the purpose of meeting maturities and the remainder was for the deficit and other current purposes. This financing was done at a very satisfactory cost to the government. The rates of interest on new issues were lower than those pre-valing on maturing issues, resulting in a considerable saving to the treasury in annual interest charges. At the close of the fiscal year, the average rate of interest on the fundel debt and treasury bills outstanding was 3-75 per cent as compared with 3-9 per cent a year ago.


February 25, 1937