June 24, 1940

STATEMENT OP REVENUES FOR THE LAST FIVE FISCAL YEARS


(000 omitted) - 1935-36 1936-37 1937-38 1938-39 Estimated 1939-40S $ i t tTax Revenues- 78,751 Customs import duties 74,004 83,771 93,456 104,301Excise duties 44,410 45,957 52,037 51,314 61,032War tax revenues- Banks 1,281 1,210 1,107 1,014 949Insurance companies 761 775 867 891 926Income tax 82,710 102,365 120,366 142,026 134,449Sales tax 77,552 112,832 138,055 122,139 137,446Manufacturers', importations, stamps, 42,764 39,572 28,582transportation taxes, etc 35,181 39,641 Tax on gold 1,413 - - - -Total revenue from taxes 317,312 386,551 448,652 435,707 467,685Non-tax Revenues- Canada Grain Act 1,213 1,192 680 1,156 1,711Canada Gazette 49 48 47 49 55Canals 890 1,004 1,866 723 762Casual 4,636 6,276 6,597 7,440 9,373Chinese revenue 6 7 2 2 2Electricity 542 646 692 726 715Fines and forfeitures 295 134 209 211 88Fisheries 42 56 60 52 54Gas inspection 91 93 88 84 81Insurance inspection 147 152 162 172 179Interest on investments 10,614 11,231 13,120 13,163 13,394Lands, Parks and Forests 458 478 541 681 677Marine 222 263 336 377 349Mariners' fund 187 205 206 211 278Military college 20 20 20 20 14Militia pensions revenue 178 187 194 209 233Ordnance lands 16 15 16 20 18Patent and copyright fees 455 464 452 442 416Penitentiaries 68 62 63 82 137Post Office 32,508 34,275 35,546 35,288 36,729Premium, discount and exchange 36 - 27 478 7,940Public Works 251 274 318 297 306Radio Licences 1,574 (>) 990 - - -R.C.M.P. officers' pensions 11 10 11 11 11Weights and measures 401 396 393 416 411Total non-tax revenue 54,910 58,478 61,646 62,310 73,933Total ordinary revenues 372,222 445,029 510,298 498,017 541,618Special Receipts- Sundry receipts 320 (*) 8,464 3,010 1,256 164Other credits- Refunds on capital account 27 616 1,543 40 21Credits to non-active accounts 27 45 819 2,858 20,292Net credit resulting from various adjustments in Railway accounts authorized by Canadian National Railways Capital Revision Act, 1937 - - 1,023 - -Total Special Receipts and Credits 374 9,125 6,395 4,154 20,477Grand Total Revenue 372,596 454,154 516,693 502,171 562,095 (*) As from November 1936, radio licence fees have been deposited to credit of The Canadian Broadcasting Corporation. (') Includes $8,000,000'rfrom Canadian Wheat Board taken into the accounts as an offset, in part, to the disbursements in 1935-36 re losses on 1930 wheat pool and stabilization operations.



The Budget-Mr. Ralston


STATEMENT OF EXPENDITURES BY MAJOR CATEGORIES AND BY DEPARTMENTS FOR THE LAST FIVE FISCAL YEARS


(000 omitted) - 1935-36 1936-37 1937-38 1938-39 Estimated 1939-40$ $ $ $ $Ordinary Expenditure Agriculture 9,399 8,741 9,017 9,527 11,817Auditor General's Office 429 423 463 473 459Civil Service Commission 259 305 358 379 398External Affairs, including Office of Prime Minister 1,290 1,341 1,450 1,057 1,228Finance- Interest on Public Debt 134,549 137,410 132,118 127,996 129,315Cost of Loan Flotations and Annual Amortization of Bond Discounts and Commissions 3,577 3,839 4,555 4,914 4,992Premium, Discount and Exchange (net) - 400 - - -Subsidies to Provinces 13,769 13,735 13,735 13,752 13,769Special Grants to Provinces 3,975 3,225 7,475 7,475 5,475Other Grants and Contributions 736 540 560 643 660Civil Pensions and Superannuation.... 854 787 712 638 574Government contribution to Super- annuation Fund 1,875 2,019 2,065 2,220 2,271Old Age Pensions, including pensions to blind persons commencing in 1937- 38 16,764 21,149 28,653 29,044 29,977General Expenditure 3,654 3,498 3,573 3,689 3,959Fisheries 1,710 1,691 1,850 2,036 2,320Governor General and Lieutenant Gov- ernors 219 224 225 226 227Insurance 163 172 187 194 195Justice 2,748 2,773 2,790 2,748 2,725Penitentiaries 2,377 2,372 2,577 2,675 2,941Labour 660 720 706 788 788Technical Education 99 76 49 27 31Government Annuities- Payments to maintain reserve 272 541 8,941 - -Legislation- House of Commons 1,486 1,760 1,516 1,800 1,286Library of Parliament 76 75 79 72 76Senate 491 587 536 600 432General 55 73 57 75 68Dominion Franchise Office 498 53 76 50 -Chief Electoral Officer, including elec- tions 1,089 72 45 114 458Mines and Resources- Administration - - (>) 1,491 (i) 184 (*) 180Immigration and Colonization 1,322 1,313 1,163 1,335 1,338Indian Affairs 4,869 4,904 4,897 5,305 5,579[Interior 2,939 2,887 f - - -Lands, Parks and Forests - - [DOT] f 1,910 2,249 2,117Surveys and Engineering - - [ 933 1,325 1, 106Mines and Geological Survey 1,040 1,135 658 1,340 1,325Movement of Coal and Subsidies under Domestic Fuel Act 2,103 2,277 2,521 1,921 4,532National Defence- Administration - - - («) 409 (' ) 166Militia Service 10,141 11,346 17,221 15,772 5,995Naval Service 2,380 4,763 4,372 6,590 1,869Air Service 3,777 5,822 10,018 11,216 4,852Sundry Services 879 992 1,149 447 310National Revenue (including Income Tax) 10,963 11,205 11,870 11,899 12,064Pensions and National Health- Administration - - - (*) 118 (*) 126Treatment and after-care of returned soldiers 11,060 11,579 12,109 13,453 14,778Pensions, War and Military 42,790 42,801 42,240 42,181 42,217Health Division 993 873 957 1,012 1,113 (>) Prior to 1937-38 general administration expenses were not segregated from other expenditures of the respective services of the departments which were amalgamated to form the Department of Mines and Eesources. The figures from 1938-39 represent only Departmental Administration, other administration costs being included as in other departments, under the respective services. (Mr. Ralston.] The Budget-Mr. Ralston


STATEMENT OF EXPENDITURES BY MAJOR CATEGORIES AND BY DEPARTMENTS FOR THE LAST


five fiscal years-Continued (000 omitted) - 1935-36 1936-37 1937-38 1938-39 Estimated 1939-40$ $ $ $ *Ordinary Expenditure-Concluded Post Office 31,438 31,906 33,762 35,456 36,727Privy Council 46 45 48 49 59Public Archives 165 160 170 159 149Public Printing and Stationery 169 169 161 191 199Public Works 12,945 14,519 12,382 15,484 13,066Royal Canadian Mounted Police 6,165 5,901 6,308 6,145 5,667Secretary of State 705 655 693 730 836Soldier Settlement 762 806 801 758 621Trade and Commerce 3,458 5,523 4,070 4,763 4,950Canada Grain Act 1,848 1,739 1,675 1,847 1,983Mail Subsidies and Steamship Subven- tions 2,426 2,120 2,029 1,993 1,907T ransport- Administration - - (!) 417 («) 371 (!) 364Air Service - - (*) 2,935 (') 3,457 (*) 3,862Marine Service 5,857 5,614 4,290 4,271 4,215Canadian Radio Commission 1,500 878 - - Canadian Travel Bureau 248 250 250 249 312Railways and Canals 4,002 3,769 3,661 4,371 3,756Maritime Freight Rates Act 2,348 2,506 3,183 2,583 2,660Railway Grade Crossing Fund 128 54 180 187 255Total ordinary expenditure 372,539 387,112 414,892 413,032 397,996Capital Expenditure Canals 458 52 Railways 287 203 71 26 23Public Works 5,799 3,237 4,359 5,398 7,006Total capital expenditure 6,544 3,492 4,430 5,424 7,029Special Expenditure Unemployment Relief Act, 1930 26 Unemployment Relief Act, 1931 26 - - - -Unemployment Relief Act, 1932 111 - - - Unemployment Relief Act, 1933 494 - - - Unemployment Relief Act, 1934 1,152 - - - Unemployment Relief Act, 1935 48,027 - - - Administration-Relief Acts - 194 378 260 287Grants-in-aid to Provinces - 28,930 19,493 17,037 Material Aid to Provinces, including municipal improvements projects - - - - 19,534Dominion share of joint Dominion- Provincial projects - 12,692 8,841 6,259 7,147Dominion Projects - 23,554 13,913 12,981 24,919Transportation facilities into mining areas - 1,221 1,324 1,213 1,121Railway Maintenance Relief Work - 2,662 - - -49,836 69,253 43,949 37,750 53,008Western Drought Area Relief- Direct Relief 5,144 11,9251 8,869 1,605Feed and fodder and freight thereon.. Freight charges on movement of cattle - 3,517 90 11,352/ Expenses of marketing cattle - - 337 - Purchase and distribution of food stuffs - - 972 277 Prairie Farm Assistance Act, 1939- Net Expenditure - - - - 7,500- 8,751 24,586 9,146 9,105 (') Prior to 1937-38 in the case of the Department of Transport and prior to 1938-39 in the case of National Defence and Pensions and National Health general administration expenses were not segregated from other expenditure of the respective services of the departments. (*) Prior to 1937-38 expenditures on civil aviation, now the Air Service Branch of the Department of Transport, were included under expenditures for the Air Service Branch of the Department of National Defence 95826-06J The Budget-Mr. Ralston


STATEMENT OF EXPENDITURES BY MAJOR CATEGORIES AND BY DEPARTMENTS FOR THE LAST


five fiscal years-Continued (000 omitted) - 1935-36 1936-37 1937-38 1938-39 Estimated 1939-40* $ $ S sSpecial Expenditure-Concluded Public Works Construction Acts 29,581 1930 Wheat Crop Equalization Payments Act 6,600 _ _Loss on 1930 Wheat Pool and stabilization operations- Payment to Canadian Wheat Board of net liability assumed as at Dec. 2, 1935 15,856 Loss on 1930 oats pool under guarantee of bank advances to Canadian Cooperative Wheat Producers, Limited 174 Provision for reserve against estimated losses on 1938 wheat marketing guarantees 25,000 27,00052,211 - - 25,000 27,000War Expenditure - - - - 118,340Total special expenditure 102,047 78,004 68,535 71,896 207,453Government Owned Enterprises Losses charged to Consolidated Fund- Canadian National Railway System, ex-eastern lines 41,796 37,449 37,882 48,194 34,851Eastern Lines 5,625 5,854 4,464 6,120 5,245Prince Edward Island Car Ferry and Terminals _ _ (*) 388 427Canadian National Steamships 270 - - - -National Harbours Board 1,126 250 289 138 94Trans-Canada Air Lines - - 111 818 412Central Mortgage Bank - - - - 16Total charged to consolidated fund 48,817 43,553 42,746 55,658 41,045Loans and advances non-active- Canadian National Steamships (Cr.) 333 (Cr.) 1,754 104 6 8National Harbours Board 2,456 2,419 1,983 3,279 1,027Total non-active advances 2,123 665 2,087 3,285 1,035Total government-owned enterprises 50,940 44,218 44,833 58,943 42,080Other Charges Write-down of assets chargeable to Consolidated Fund- Drought Area Relief Loans, 1934-35- Province of Saskatchewan 1,374Reduction in soldier and general land settlement loans 488 628 750 1,023 1,643Yearly established losses in seed grain and relief accounts-Department of Mines and Resources 27 44 14 18 10Canadian National Railways Securities Trust Stock-Reduction due to line abandonments during calendar years 1938 and 1939 (*) - 2,713 2,600Cancellation of Canadian Farm Loan Board-Capital Stock 20 10 14 11Province of Manitoba Treasury Bills.. - - (*) 805 - -Province of Saskatchewan Treasury Bills - - - (*) 17,682 The Budget-Mr. Ralston


STATEMENT OF EXPENDITURES BY MAJOR CATEGORIES AND BY DEPARTMENTS FOR THE LAST


five fiscal years-Concluded (000 omitted) - 1935-36 1936-37 1937-38 1938-39 Estimated 193940 Non-active Accounts- General Land Settlement Loans - - 139 - -Active assets transferred to non-active. - (*) 18,487 - - -Fulfilment of guarantees- The Saskatchewan Seed Grain Loans 2,638Guarantee Act, 1936 - - - Total other charges 515 19,179 1,718 3,768 25,958Grand total expenditures 532,585 532,005 534,408 553,063 680,516(>) Included with Eastern lines in previous years. . (>) An amount of $711,000 representing line abandonments during the calendar year 1937 was included in the adjustments resulting from the Canadian National Railways Capital Revision Act, 1937. (*) Dominion contribution to Voluntary Debt Adjustment Program effected in Provinces of Manitoba and Saskatchewan respecting Drought Area Relief that was financed by the Dominion up to January 1, 1935-Manitoba $805,000, Saskatchewan $17,682,000. (*) These amounts are offset by a contra account on the revenue side. summary of revenues and expenditures (000 omitted) 1935-36 1936-37 1937-38 1938-39 Estimated 1939+0$ $ t $ $372,539 372,222 387,112 445,029 414,892 510,298 413,032 498,017 397,996 541,618-317 +57,917 +95,406 +84,985 +143,622102,047 320 78,004 8,464 68,535 3,010 71,896 1,256 207,453 164101,727 6,544 50,940 515 69,540 3,492 44,218 19,179 65,525 4,430 44.833 1,718 70,640 5,424 58,943 3,768 207,289 7,029 42,080 25,958159,726 54 136,429 661 116,506 3.3S5 138,775 2,898 282,356 20,313159,672 317 135,768 57,917 113.121 95,406 135,877 84,985 262,043 143,622159,989 77,851 17,715 50,892 118,421Ordinary expenditures. Ordinary revenues Deficit (-) or surplus (+) on ordinary account Special expenditures.... Less special receipts. Balance Add-Capital expenditures " Government owned Enterprises. " Other charges Less other credits Add deficit or deduct surplus as above. Over-all deficit or increase of direct ne debt The Budget-Mr. Ralston


REVENUES, 1939-40


3. The total revenues of the dominion from taxation and other sources, not including $20,292,000 of credits to non-active account which necessarily appears also on the expenditure statement, aggregated $541,803,000. This represents an increase of $26,952,000 or 5-2 per cent over the previous all-time record revenue received in the fiscal year 1937-38. Compared with last fiscal year, 1938-39, the increase was $42,490,000, or 8-5 per cent. 4. Total revenue from taxation amounted to $467,685,000, an increase of $31,978,000 over that collected in the previous year. With the exception of (1) income tax, and (2) manufacturers', importations, stamps, transportation taxes, etc., the main sources of taxation recorded substantial increases over last fiscal year. These increases arose out of taxation changes effected by the emergency budget of September 12, 1939 and improvement of business conditions generally. 5. The sales tax replaced income tax as the largest single revenue producer. Receipts from this tax totalled $137,446,000, an increase of $15,307,000 over 1938-39. This increase was due in part to improvement in general business activity and in part to the removal from the schedule of exemptions of electricity and gas used for domestic purposes, salted or smoked meats and canned fish, as provided for in the budget of September 12, 1939. 6. Income tax receipts totalled $134,449,000, a decline of $7,577,000 from that collected in the previous year. This decline was principally in the collections of the tax on corporation incomes based on 1938 earnings. Of the receipts, $77,920,000 was from the tax on corporation incomes, $45,407,000 from the tax on individual incomes, and $11,122,000 from the 5 per cent tax collected at the source on interest and dividends. 7. Other excise taxes including the stamp tax on cheques, etc., and the taxes on sugar, automobiles and rubber tires, matches, toilet preparations, pullman tickets, telegraph and telephone messages and other miscellaneous commodities realized $28,582,000, a decrease of $10,990,000 from the previous year. The removal of the 3 per cent tax on importations under the intermediate tariff resulted in a loss in revenue from this source of $13,612,000. The difference, namely $2,622,000, represents the net increase in other items of excise taxes. 8. Receipts from excise duties, mainly on liquor and tobacco totalled $61,032,000, an increase of $9,718,000. This increase was due largely to the increased duties on liquor and tobacco following the budget of September 12, 1939. 9. The greatest increase in revenues from any one source occurred in customs import duties, where a total of $104,301,000 was realized, compared with $78,751,000 for the previous fiscal year, an increase of $25,550,000 or 32-4 per cent. Of this increase it is estimated that approximately $6,600,000 was obtained from the tariff increases provided for in the September, 1939, budget. The balance of the increase reflects improvement in conditions generally due in part at least to expanding activity brought about by the war. 10. Non-tax revenues or revenues from services rendered by the various departments and interest on investments, totalled $73,933,000 compared with $62,310,000 in the previous year. The largest non-tax item is the receipts of the Post Office which totalled $36,729,000 during 1939-40, an increase of $1,441,000 over the preceding fiscal year. The cost of operations of the Post Office last year was practically the same as its receipts, there being a nominal surplus of $2,000. Last fiscal year there was a nominal deficit of $168,000. The Post Office accounts do not include the rental value and other costs of premises occupied and equipment used, nor do they include any credit to the Post Office for services rendered to other departments through the free use of the mails. The second largest non-tax revenue item is Interest on Investments which totalled $13,394,000, an increase of $231,000 over that received in the previous year. Casual Revenue including mint handling charges and net profits on coinage, Dominion's share of surplus profits of the Bank of Canada, receipts from various provinces for services rendered by the Royal Canadian Mounted Police and other miscellaneous items totalled $9,373,000. The large amount shown as Premium, Discount and Exchange revenue is due mainly to the redemption of the 31 per cent 1930-50 loan of £28,162,776, which was called for payment and paid at the current rate of sterling. 11. Special Receipts and other credits amounted to $20,477,000. The main item in this category is the credit of $20,292,000 made up of $17,682,000 of Province of Saskatchewan treasury bills written off from non-active account; $2,600,000 of Canadian National Railways Securities Trust Stock written off because of line abandonments during the calendar year 1939; and $10,000 representing the yearly established losses in the seed grain and relief accounts of the Department of Mines and Resources. All of these amounts necessarily appear on the expenditure statement under the heading of "Other Charges".



The Budget-Mr. Ralston


EXPENDITURES, 1939-40


12. The comments which follow will deal with expenditures classified by the usual main categories: Ordinary Expenditures, Capital Expenditures, Special Expenditures (including relief and war), Operating Deficits of and Nonactive Advances to Government Owned Enterprises, and Other Charges. All disbursements under these categories are included as expenditure in arriving at the over-all deficit or increase in net debt.


ORDINARY EXPENDITURES


13. Ordinary expenditures, which include interest on the public debt and the general administrative expenses of the Government totalled $397,996,000, a decrease of $15,036,000 from the previous fiscal year. The largest decrease in ordinary expenditures is in the Department of National Defence where by reason of the war a change in policy was instituted as from September 1, 1939 which involved the charging of certain expenditures of this department to War Expenditures. These are included in the totals shown under section 15. Certain Defence Expenditures, totalling $3,770,000, originally set up as Capital have been charged to Ordinary Account pursuant to Item 205 of the Main Estimates, 1940-41. Ordinary expenditures of the Public Works Department decreased approximately $2,400,000 and special grants to provinces were reduced by $2,000,000. There were no very large increases in the ordinary expenditures of any particular department. Expenditures of the Department of Agriculture increased by $2,290,000. Interest on public debt was up by $1,319,000. The dominion's share of Old Age Pensions, including pensions to blind persons was $933,000 higher than last fiscal year. Payments in connection with the movement of ceal under the Department of Mines and Resources increased by $2,611,000. The only other increase of any considerable amount was for the treatment and after-care of returned soldiers which increased by $1,325,000.


CAPITAL EXPENDITURES


14. Total expenditures charged to capital amounted to $7,029,000 compared with $5,424,000 in the previous year. The main items in this category are expenditures arising out of dredging the St. Lawrence Ship Channel and the construction and improvements of airways and airports.


June 24, 1940