This federal state includes thirteen entities - ten provinces and three territories, and Canada's budget system can be considered in two directions, since the subjects of the federation are clearly divided into two types. There are explanations for this division. The first is the composition of indigenous peoples. The population of Canada is formed by explicit large groups, compactly living in certain territories. Secondly, the structure of the subjects of the federation is quite mobile. The budget system of Canada covers five thousand local municipalities. These are counties, rural settlements and cities (municipalities). It should be noted that there is no more decentralized federation in the world.
Finance
In this country, relations between society and the state are very well balanced, while regional entities have the highest level of autonomy. You can not talk about absolute equality. It seems that the federation loves some provinces more than others (especially the French-speaking Quebec). There are two official languages in Canada - English and French, the reasons for this phenomenon will be discussed below.
The budget system of Canada and the whole construction of financial relations is characterized most of all by the fact that the role of regions in the conduct of business is unusually high. The subjects of the federation use an increased share in GDP (taking into account the local level) in comparison with what the federation has, and the overall share in state expenditures in GDP decreases. The consolidated budget (a set of it at all levels) increases the share of local and sub-federal levels.
Center and regions
The separation of powers between the regions and the Federation of Canadians owe their Constitution. This document states that the broadest powers of expenditure are vested in provincial administrations. Canada’s budget system provides for local distribution of expenditures on health care, education, public services, the judiciary and municipal organizations, as well as many other needs of local authorities and provinces.
However, the Constitution does not determine how to use all these powers, and therefore each province develops its own laws. In 2016, the country's GDP exceeded a trillion dollars (translated into US dollars - 701 billion). The Canadian economy is characterized by high growth in all indicators compared with other countries considered to be developed.
GDP structure
Canada's GDP structure indicates a very high level of development of the country's economy. Agriculture accounts for only three percent, and industry accounts for thirty-one percent of GDP. Significantly more than sixty percent go to the intangible industry. Since 1993, inflation in Canada has never exceeded two percent. It should be noted that Canada’s economy has always been open: exports are forty-five percent, and in total, imports and exports by the year 2000 have grown to eighty-five percent of GDP. For the most part, this is the result of a NAFTA agreement. As a result, the population of Canada, Mexico and the United States, resources, goods, services, capital of the federation freely move in all territories of these countries.
In the G7, Canada has the lowest cost of living. Here you can use a lot of free or state subsidized services, including in the field of education and health.The price level and the exchange rate of the country are stable, since the financial system of Canada works like a clock. The government eliminated the existing budget deficit, and this generally affected all macroeconomic indicators. To understand how and due to what this system works, one needs to take into account the existing historical features, of which there are a long series, and they all fundamentally influenced the foundations of the budget system.
Story
Until 1763, these territories were a French colony, and the country was ruled by a French governor. And before that, the Seven Years War flared, as a result of which Canada withdrew to Great Britain, and therefore the British general became the governor. However, officially, as a state, Canada was born only in 1867, when they signed the Confederate Treaty, adopted in the English parliament. The process of state formation was a long one - provinces entered Canada until 1949, even in the 90s of the twentieth century, new territories were still forming (for example, Nunavut in 1999). The Governor-General is English, and therefore he was the representative of the Queen of Great Britain (she is still, by the way, the head of state of Canada), and the local parliament could not control the budget and budget system in order to make decisions about expenses and revenues without the corresponding message from the governor, which contained his recommendations.
Naturally, at the federal level they deal with the most important sources of state revenue. This is how the structure of the budget system of any country is formed, and Canada is no exception. Previously, the provinces had very limited budgets by federal subsidies, but gradually the transfer of powers did occur, and the subjects of the federation became more and more independent from year to year in the formation of their profits and expenses. Before World War II, the government exerted a rather large influence on all levels of the country's budget system. And after its completion, the state participated in the development of its own economy, perhaps more and more actively.
The reform
All fundamental reforms were carried out in the nineties of the twentieth century, and the area of state regulation in the Canadian economy has narrowed significantly, this especially affected the sphere of finance. Privatization was more than large-scale: all Canadian industries, all large enterprises - manufacturing, oil and gas, rail and air transport, communications - were sold to private investors. Subsidies have fallen sharply, for the most part they have been canceled altogether. In greatly reduced amounts, they were preserved only in agriculture. All transport, without exception, lost subsidies. Territories and provinces received transfers in a substantially reduced form. The task of the government of the second half of the nineties was the only one - to improve the economy.
For this purpose, government spending has been drastically reduced with the remaining tax rates. Now Canada’s fiscal policy has taken a completely different look. Centralized finances included the federal budget formed and executed by the government, the budgets of territories and provinces, and local budgets. In addition, the government retained extrabudgetary funds, as well as municipal and state loans. And the finances of organizations and enterprises remained decentralized. In the same way, powers were divided. The federal government deals with military strategy and defense issues, regulates the rule of law, and manages public debt and state property. It also forms a banking and monetary system, builds commercial and trade relations. The federal budget consists mainly of constantly incoming taxes, but this is ninety percent of all revenues.
Taxes
Canada's tax system has many steps, taxation is based on agreements between the territories and the center regarding the division of powers. First of all, this concerns personal income tax and corporate income taxes. Two legislative acts - regarding revenues and regarding government expenditures - concern federalwow budgetbut. The budgets of the local and sub-federal levels finance health care, education, the rule of law and infrastructure. There are extrabudgetary funds in Canada that have either a social purpose, or economic or research. The state also has social funds, primarily state funds for old-age pensions and employment insurance. Everyone pays these funds - both employers and employees themselves.
Pension insurance has parity rates, which is very different from employment insurance. Health insurance is compulsory, and in the provinces these payroll accruals appeared before everyone else. By the way, the federal government did not participate in medical programs until 1948 at all. Current legislation allows borrowing at all levels of government. Mostly transactions are carried out on the securities market. However, the amount of borrowing is legally established with self-restrictions in each province of Canada. Size usually corresponds to the state of the economy and finance, as well as social obligations. The source of loans for regional authorities are debt securities that are placed on the domestic market, as well as loans issued under the Canadian pension program. Loans for local authorities are usually set by the provincial government.
Natural resources
The provincial right to impose retail sales taxes was obtained as a result of a Supreme Court decision. The population of Canada literally won their rights in the regions. It was also very important for building the tax system in Canada to solve the issue of ownership of natural resources for their possible taxation.
Now, according to the Constitution, all natural resources belong to the jurisdiction of the provinces completely and completely, and therefore only the local government received the exclusive right to tax them. This means that the federal authorities cannot introduce a tax on the extraction of mineral resources located in the province. Therefore, now only the wealth of the subsoil that is located on the federal territories and on the continental shelf is at the disposal of the federals.
Stages of economic development
Industrialization in Canada after World War II went very fast. The country's economy has literally flourished for twenty years, but too rapid growth has caused a shortage of skilled workers. That is why in the sixties of the last century, immigrants of various nationalities poured into the country. Then, in the province of Alberta, the largest oil deposits were discovered. This led to a sharp economic leap in these territories. And now Edmonton and Calgary are the most important financial, industrial and railway centers, and the province itself is growing economically much faster than the rest of the country.
After the recession of 70-80 years, government spending increased significantly, the state budget was increasing the deficit of tens of billions of US dollars - this is a real reason for gloom. But in 1993, Canada was lucky with the Minister of Finance. Over the course of literally a decade, the economy has improved significantly, trade taxes have been reduced (thanks to NAFTA and FTA, again). The national debt of thirty-six billion US dollars was even paid off, the budget deficit - forty-two billion dollars - was also canceled. Moreover, at present, there is an excess of the budget of the Canadian government - almost thirty-four billion dollars.
Privatization
The Canadian authorities began the privatization program back in 1985, and ended in 1998. It was carried out according to the principle of an individual approach to transferring each enterprise to private ownership, stocks were offered to the population by the stock market, sales were carried out both through a tender and through negotiations. By 1997, the twenty-six largest state-owned enterprises had been privatized.
Among them: airline, railway, oil companies, uranium enrichment plant, aircraft manufacturing and weapons, as well as telecommunications companies. The federal budget received huge amounts of money - about six billion US dollars were received by the government. As a result, the capital markets in Canada expanded with the implementation of the privatization program, and former state-owned enterprises became much more efficient. The Bank of Canada specifically kept inflation in the middle of the target range - at the calculated level.
Three percent of GDP
It will be about agriculture in Canada. It is diverse and covers almost all existing industries. Approximately seven percent of the country’s territory has been allocated for agriculture, their lion's share in the Central West. Canada is the world's largest producer of wheat, which is grown here. Along the way, rapeseed, lentils and even ginseng are cultivated. Provinces located near the Atlantic grow mainly potatoes. There is a good long summer in Quebec and on the shores of Ontario, which is why farmers can afford to grow crops such as lettuce, corn, cucumber, strawberries, apples, tobacco.
Cattle breeding is developed in the province of Alberta, it is here that the largest livestock of valuable meat breed of cows bred in Canada - Bostaurus. Chickens and eggs are produced in British Columbia, and cows, but dairy, are bred in Quebec and Ontario. All livestock and crop products are of excellent quality, and a huge part of them are exported.
Of course, fishing is very well developed in Canada. This is not surprising in the country of many huge lakes and two oceans. They fished too zealously, so in the seventies there was a so-called cod crisis, the consequences of which are still felt.
Forty percent of Canada is forested. Therefore, this country is the leader in the quantity and quality of paper production, and Canada is always the largest of the world's exporters of wood.