| Your
Answer |
Correct
Answer |
1.
How much does the federal government spend annually? |
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b)
$164 billion |
In the 2001 / 2002 fiscal
year, the federal government spent $164.4 billion, as follows:
- Transfers to persons: 23.8%
- Public debt interest: 23%
- Transfers to governments: 16.2%
- Operating and capital: 16.1%
- Other transfers: 12.1%
- Defence: 6.4%
- Crown corporations: 2.5% |
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2.
How much does the federal government spend on debt service charges
annually? |
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c)
$38 billion |
In the 2001 / 2002 fiscal
year, the federal government spent $37.7 billion on debt service
charges. This represents almost ¼ of total expenditures and
is the second highest expense category, just behind transfers to
persons (e.g. pensions, employment insurance payments, etc.). |
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3.
How much has the federal government’s accumulated debt grown
between 1961 and 2001? |
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d)
3,600% |
The federal debt in 1961
was $14.8 billion, compared to an accumulated federal debt of $536.5
billion in 2001/2002, an astounding 3,600% increase over 40 years.
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4.
Of the total accumulated federal government debt, how much of this
is attributable to the effects of compound interest over the years? |
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c)
90% |
Approximately 90% of
the current accumulated federal debt of $536.5 billion can be attributed
to the effects of compound interest. Debt grew exponentially in
the 1970s and 1980s as federal government spending far outstripped
growth in revenues and debt was piled upon debt. Subsequent governments
have managed to produce annual operating surpluses, but have not
substantially reduced the accumulated debt. This is a result of
the “debt spiral” created by years upon years of compound
interest. |
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5.
Of Canada’s entire Gross Domestic Product (GDP), how much
is generated by government spending at all levels? |
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a)
38% |
In 2002/2003, total spending
by all governments in Canada (federal, provincial and local) totaled
approximately $440 billion. Given that Canada’s GDP (the value
of all goods and services produced) is $1,159 billion, that means
that 38% of our GDP is the result of government spending of some
kind or other. This represents a huge portion of Canada’s
economy, and many economists would argue a much too large portion.
It points to close to 40% of the economy more focused on re-distributing
wealth than actually creating it. |
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6.
How much do Canadians pay in taxes annually to all levels of government? |
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c)
$357 billion |
In 2002/2003 total taxes
collected from Canadians by all levels of government (federal, provincial
and local) totaled approximately $357 million, broken down as follows:
- Income taxes (personal and corporate): $179 billion
- Consumption taxes: $97 billion
- Property and related taxes: $43 billion
- Other taxes: $4 billion
- Heath and drug insurance: $3 billion
- Contributions to social security: $30 billion |
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7.
Each year, The Fraser Institute calculates Tax Freedom Day, the
first day of the year in which the money that Canadians earn is
for themselves. All money earned prior to Tax Freedom Day goes to
one of three levels of government – federal, provincial, or
local. What date was Tax Freedom Day in Canada in 2003? |
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a)
June 28 |
For 2003, The Fraser
Institute declared June 28 to be Tax Freedom Day. In essence, Canadians
work for half a year to support their heavy tax burden. |
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8.
At the peak of the “Brain Drain” exodus of highly educated
Canadians in the late 1990s, how many Canadians went to the United
States annually to assume permanent positions? |
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d)
60,000 |
Don Devoretz, a professor
at Simon Fraser University, estimated that approximately 60,000
of Canada’s best and brightest left for jobs in the U.S. in
1999. This was the equivalent of the output of two and half Simon
Fraser universities. |
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9.
What percentage of Canada’s Gross Domestic Product is devoted
to defence expenditures? |
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c)
1.1% |
Canada’s defence
spending is only 1.1% of its GDP. The NATO Alliance is Canada’s
primary collective security relationship and obligation. Of all
NATO members, Canada’s financial commitment as a percentage
of its wealth is ahead of only two other NATO members – Luxembourg
and Iceland. |
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10.
The 2001 federal Auditor General’s Report noted that the Canadian
Armed Forces faced an annual shortfall in its equipment and operating
budget of how much? |
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a)
Between $1 billion and $2 billion |
The Auditor General pointed
to serious deficiencies in the resources accorded our Armed Forces
in order to carry out the obligations we ask of them. |
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11.
Throughout various peacekeeping missions in the former Yugoslavia
throughout the 1990s, how many casualties were suffered by Canadian
troops? |
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d)
17 killed and 100 seriously injured |
Although Canadians are
rightfully proud of our country’s various peacekeeping missions worldwide, the
fact is, in the post Cold-War era, there is rarely a peace to keep
in most of the world’s hot spots. Our peacekeeping
troops are often placed in the midst of warring factions with inadequate
equipment, and unclear or unrealistic missions, placing them in
extreme danger. And this is usually done without the benefit of
Parliamentary debate or sanction. |
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12.
The Federal Liberal Party of Canada formed the government with a
very large majority (172 seats to 129 opposition seats) after the
2000 election with what percentage of the popular vote? |
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c)
41% |
Because of Canada’s
first-past-the-post electoral system, the collective voice of Canadian
voters does not often get accurately reflected in the Parliaments
we elect. With only 40.8% of the popular vote, the Liberals received
a huge majority of 177 seats to the opposition parties’ total
of 129. Because non-Liberal votes were spread across many ridings,
a party with much less than 50% support can gain a majority, which
in our system is the equivalent of a four-year free reign to govern
as one sees fit. Introduction of some sort of proportional representation
system would better reflect voters’ desires in the formation
of Parliament. |
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13.
The House of Commons, as the peoples’ representative assembly,
and in its role of holding government to account for its actions,
must approve all expenditures made by the federal government. |
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b)
False |
Up until the 1960s, the
House of Commons used to sit as a Committee of the Whole to debate
and vote, item by item, on the government’s spending Estimates
for the coming year. This parliamentary oversight of government
spending moved to various parliamentary committees. However, under
new rules adopted at that time, if the committees did not address
Estimates by a certain date in June of every year, these estimates
were “deemed to have passed.” This amounted to a virtual
blank cheque for governments to spend as they pleased, without being
held properly accountable for these decisions.
Parliamentary oversight of government expenditures continues
to be eroded. The federal government did not introduce a budget
in 2001, and the Ontario provincial government unveiled their
2003 budget, not in the provincial assembly, but at an off-site
media event / news conference. |
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14.
Between 1913 and 1979, closure (the closing down of political debate
to force a vote on a bill) was used by the federal government in
the House of Commons 31 times. How many times has closure been used
since 1980? |
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a)
166 times |
Closure has become much
more common in the past two decades. This points to a further decline
in parliamentary process and oversight. |
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15.
The Canada Infrastructure Works Program (CIWP) spent $8.3 billion
of public funds and created how many jobs across the country? |
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d)
unknown |
Although the federal
government claims that thousands of jobs were created as a result
of the Infrastructure program, the underground royal
commission has been unable to substantiate these claims.
The records on how and why projects were approved for funding, and
what long-term benefits were created, if any, are either very shoddy
or non-existent. Any claims of end outcomes, particularly jobs created,
are merely conjecture at best and falsehoods at worst. |
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16.
A Member of Parliament’s primary allegiance is to the people
who elected him / her to office? |
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b)
false |
In our system of strict
party discipline and few free votes in the House of Commons, MPs
have very little opportunity to do other than voice the party line
and vote according to party dictates. This is especially true for
MPs in the governing party. |
How did you do? Did some of the answers surprise you? Did some shock
you? Take some time to reflect on these issues, and keep notes on those
issues of most concern to you. Join the discussion
forums and let your fellow Canadians know how you feel about these
issues. Need we worry about the size of our public debt, our tax burden,
the state of our nation’s defence capabilities, and the nature of
political accountability in this country? You may well disagree with the
findings of The underground royal commission
Report. That is fine, but join the debate and let others know your thoughts
on these issues. We have all, as Canadian citizens, been too far removed
from the debate, and from our governing institutions. It is time to be
heard.
Continue on to the next section of the course, which explains the nature
of Canada’s fiscal mess.
