Main heads of revenue and expenditure - B Com PDF Download

Revenue

Own source revenue

 Income taxes

(a) Personal income tax - Encompasses general levies on income of individuals and unincorporated businesses as well as special levies on income, such as a surtax that governments charge from time to time. The proceeds from the income tax on capital gains of individuals and unincorporated businesses are included here. Some provinces, for example Ontario, levy health premiums based on the incomes of individualsand the revenues raised are not specifically designated to finance their hospitalization, medical care and drug insurance programs. In these instances the revenues are classified as income taxes. Also, refundable personal income tax credits are in this category. Revenue and expenditures are both grossed up by the full amount of the refundable tax credit. A refundable tax credit could be considered as an expenditure program delivered via the tax system. Consequently such a credit reduces the tax liabilities and the portion of the credits remaining, after the tax liabilities are reduced to zero, is refunded to the tax payer. The Ontario sales tax credit represents a good example. Until 1992/1993, the credit was delivered through the budgetary expenditure appropriation called "Sales tax grants to pensioners." After 1992/1993 the Ontario government decided to switch to the income tax mechanism by incorporating the Ontario sales tax credit to deliver the assistance to pensioners.

(b) Corporation income tax - Includes most federal, provincial and territorial taxes on taxable profits of corporations. It also includes special taxes which are occasionally levied on profits of corporations. Corporate Income Tax (CIT) revenues are shown on a gross basis by including the full amount of the CIT refundable tax credits as revenue. An equivalent amount of the refundable tax credit is also shown as an expenditure.

(c) Mining and logging taxes - Accounts for specific taxes which are sometimes levied on profits of natural resource based industries. Also included are refundable tax credits that are grossed up as revenue and expenditures. These taxes were previously classified to natural resource revenue.

(d) Taxes on payments to non-residents - Includes the federal tax withheld at source on payments to non-residents (both individuals and corporations) of dividends, interest, rents, royalties, alimony, managerial fees and amounts arising from trusts and estates as well as withholdings on foreign insurance companies.

(e) Other income taxes - Includes income taxes which cannot be allocated to any of the other categories.

6.07 Consumption taxes

(a) General sales tax - The proceeds of the federal Goods and Services Tax (GST) and of provincial retail sales taxes are recorded in this category. In April 1996, the federal government reached an agreement with three provinces to harmonize their provincial retail sales taxes with the federal GST (Newfoundland and Labrador, New Brunswick and Nova Scotia). The federal remittances to these provinces for this Harmonized Sales Taxes (HST) are classified under the general sales tax. However, the one time compensation of the federal to the provinces for harmonization is included under general purpose transfers. Where amusement taxes and other specific consumption taxes are reported in the source documents with revenue from the general sales taxes, the proceeds from these specific taxes, e.g., the Ontario amusement tax, are excluded from this category and reported under their appropriate group. Hotel and motel taxes, telecommunications and advertising taxes and the Quebec sales tax on insurance premiums are not part of the general sales tax.

(b) Alcoholic beverages taxes - Two sub-groups have been devised:

Liquor gallonage taxes - Encompasses a levy on volume of alcoholic beverages produced.

Other liquor taxes - Includes all forms of special levies, excise tax, excise duty or other, imposed on the production and sale of alcoholic beverages. When a general sales tax applies to alcoholic beverages, the related proceeds are classified under the "General sales tax" group. Similarly, customs duties on imported alcoholic beverages are classified under the "Custom duties" heading.

(c) Tobacco tax - Encompasses special levies such as excise tax, excise duty and provincial specific taxes on the production and sale of tobacco products. General sales taxes and customs duties applicable to tobacco products are included under their respective headings.

(d) Amusement tax - Includes tax receipts from admissions to theaters, cinemas, recreational, cultural or other entertainment activities. Taxes levied by provincial and territorial governments on pari-mutuel betting at horse race tracks and on casinos' gaming activities are also included here.

(e) Gasoline and motive fuel taxes - Includes the proceeds of specific taxes on gasoline, on aviation and diesel fuel and on propane or other substances when used as motive fuel.

(f) Customs duties - Applies only to the federal level and take into account the proceeds from levies on commodities imported into Canada such as manufactured goods and food, beverages and tobacco.

(g) Remitted liquor profits - Accounts for total remitted profits of government owned liquor boards. Because government owned liquor boards operate as fiscal monopolies their profits are treated as taxes on products (indirect taxes). They were previously classified as investment income.

(h) Remitted gaming profits - Accounts for total remitted profits of government owned lottery and other gaming corporations. Because government owned lottery and other gaming corporations operate as fiscal monopolies, their profits are considered as taxes on products (indirect taxes). Those amounts were previously classified as investment income.

(i) Other consumption taxes - Three sub-groups have been devised:

Air transportation tax- Accounts for the tax levied by the federal government on the price of air transportation purchased either in Canada or outside the country for the use of air transportation facilities in Canada. This tax was discontinued on November 1, 1998.

Taxes on meals and hotels - Includes the proceeds from special taxes on meals and hotel accommodations.

Miscellaneous consumption taxes - Accounts at the federal level for the yield of special excise levies on jewellery and watches, toilet preparations and an assortment of sundry items and for revenue paid to the federal government from provincial lottery corporations. At the provincial level, it includes the proceeds from special taxes on telecommunications and advertising taxes, computer software, electricity, gas, coal, and fuel oil and on other goods and services as well as the Quebec tax on insurance premiums.

6.08 Property and related taxes

(a) General property taxes

Real property taxes - In Canada, taxation of real property (land and improvements) is shared by provincial and local governments. The amount shown as revenue from real property taxation by provincial governments is exclusive of amounts collected for and passed on. Local governments' real property taxes include the amount collected for and remitted to local governments as well as the amount they collected themselves. Property owned and occupied by most general governments is exempt from property tax. To compensate a government for the loss of revenue due to the exemption, grants in lieu of taxes are paid by the federal and provincial governments to provincial and local governments levying property taxes. See paragraph 6.08 (a) (Miscellaneous general property taxes) below.

Lot levies - Includes imposts or additional lump sum development charges levied on properties benefiting from local improvements or additional capital facilities. The imposition of these imposts or levies involves an agreement between the developer and the municipality, whereby, the developer is required to pay a levy to the municipality to finance specific services.

Special assessments - Are levies made by a municipality on a specific group of properties to pay for a service, such as the provision of a sidewalk, supplied to those properties only.

Grants in lieu of taxes - Includes provincial, territorial and local government revenue from higher levels of government as grants in lieu of property taxes, which are isolated for each level of government concerned. Prior to the 1997 historical revision, this item was classified under general purpose transfers from other levels of government.

Miscellaneous general property taxes - Includes any other general property taxes.

(b) Capital taxes - Includes the taxes levied by federal, provincial and territorial governments on the paid-up capital of corporations.

(c) Other property-related taxes

Land transfer tax - Includes the proceeds of levies on the value of property transferred.

Business taxes- Includes taxes levied on businesses in lieu of, or in addition to, property taxes. Taxes on income or profits of such businesses are classified under income taxes.

Wealth transfer taxes - Includes succession duties and gift taxes. The federal succession duties and gift taxes were eliminated in 1971 and by mid-1985 all provinces had withdrawn from these fields of taxation. However, governments are still collecting duty related to unsettled cases prior to the taxes being abandoned.

Miscellaneous property-related taxes - Any other property related taxes.

6.09 Other taxes- This category now includes different kinds of licences and permits. During the 1997 historical revision of the CSNA, the FMS adopted the following recommendations of the 1993 System of National Accounts (SNA):

1. Payments by a household for specific licences such as licences to own or use a vehicle, boat or aircraft, and licences to hunt, shoot or fish are to be treated as taxes. Payments for all type of other licences are to be treated as sales of goods and services.

2. Licences purchased by businesses are to be considered taxes. This "Other taxes" category is divided into four sub-categories:

(a) Payroll taxes - This revenue sub-category encompasses tax revenues that are collected from employers as a percentage of their payroll. Payroll taxes collected from employees as a percentage of their salaries and wages are classified as personal income taxes. However, those that are designated for social insurance plans are classified as contributions to social insurance plans. In some provinces, the proceeds from these taxes are used to help finance a number of functions while in others they are specifically assigned to health and/or education or to workers training. As of 1998, four provinces were levying a payroll tax, Newfoundland and Labrador, Quebec, Ontario and Manitoba. Employer contributions to Canada Pension Plan (CPP), Quebec Pension Plan (QPP), Employment Insurance (EI), etc., which to an extent are also based on salaries and wages paid by the employer are found under the category "Contributions to social insurance plans" (see paragraph 6.11).

(b) Motor vehicle licences - Accounts for the proceeds of registration fees, drivers' licences, permits and other fees relating to the ownership and operation of motor vehicles. These amounts were previously classified to "Privileges, licences, and permits" a category that was eliminated during the 1997 historical revision of the CSNA.

(c) Natural resource taxes and licences - Accounts for the proceeds of taxes levied on private properties and/or production of natural resources. Freehold mineral right tax is classified under this category. This category also includes licence fees paid to be able to conduct activities related to natural resources but excludes activities related to exploration of natural resources.

(d) Miscellaneous taxes

Agricultural insurance premiums - Includes agricultural insurance premiums levied by most provinces. The proceeds are used specifically to finance crop insurance and farm income stabilization insurance schemes.

Insurance premium taxes - Encompasses the proceeds of special taxes levied on gross insurance premium income earned by insurance companies, on life, sickness, accident, fire and other insurance. At the federal level, it includes taxes on certain premiums for insurance contracted outside Canada.

Hunting and fishing licences, liquor licences and other licences and permits - Includes licences paid by persons to hunt, shoot or fish; liquor licences to retailers of alcoholic beverages; all business licences other than motor vehicle licences and liquor licences mentioned above. At the local government level, it includes all licences because data limitations prevent any allocation to other revenue categories.

Business fines and penalties - Accounts for fines and penalties imposed by tax authorities on overdue taxes by businesses. (See paragraph 6.14 for "Other fines and penalties").

Business donations - Includes contributions and gifts from businesses.

Other miscellaneous taxes - This category brings together the field of taxes not elsewhere specified such as premiums paid by financial corporations to federal and provincial deposit insurance corporations.

6.10 Health and drug insurance premiums - Includes premiums levied by some provinces and used specifically to finance their hospitalization, medical care and drug insurance programs. This category and the category "Contributions to social insurance plans" described in the next paragraph (6.11) are two new categories resulting from the division of the old category "Health and social insurance levies." To harmonize with the System of National Accounts (SNA), health insurance premiums and contributions to social insurance plans are no longer shown as taxes in the FMS. In the SNA they are presented in separate series. Some provinces, for example Ontario, levy health premiums based on the incomes of individualsand the revenues raised are not specifically designated to finance their hospitalization, medical care and drug insurance programs. In these instances the revenues are classified as income taxes.

6.11 Contributions to social insurance plans - These contributions are broken down into five types of plans. Contributions to social insurance plans are still reported on a gross basis. However, unlike prior to the 1997 historical revision, government's own contributions are not offset against the corresponding revenue of the plans (see Chapter 8).

(a) Employment Insurance (EI) contributions - Covers employer and employee contributions toward income maintenance payments under the federal EI program.

(b) Contributions to Workers' Compensation Boards (WCBs) - Comprises government and non-government employer contributions to provincially-operated workers' compensation schemes. It is worth noting that most general governments act as their own insurers against risks of employee injury in the course of duty and do not contribute to their workers' compensation regular program. However, certain classes of their employees are covered under separate agreement with the boards.

(c) Contributions to non-autonomous pension plans - Covers employer and employee contributions to non-autonomous pension plans. A non- autonomous pension plan is a plan that is not backed by invested assets. All employer and employee contributions are deposited in the consolidated fund of the government and when pension payments are made, they come out of the consolidated fund. Although the governments do not maintain separate portfolio investments, they do show separate financial statements for the plans. The federal public service superannuation account is considered a non-autonomous pension plan.

(d) Contributions to Canada and Quebec Pension Plans - This category covers contributions to the CPP by employers and employees outside the province of Quebec and the corresponding contributions to the QPP by employers and employees in Quebec.

(e) Other social insurance plan contributions - Comprises contributions to social insurance plans not included elsewhere, such as employee contributions to pension plans that are embedded in the budgetary transactions of governments.

Sales of goods and services

6.12 As providers of public goods and services, institutions within the government component of the public sector engage in transactions of commercial nature with organizations or individuals in the private sector and with other institutions within the government component. The revenues generated from such transactions are called "Sales of goods and services," are defined as receipts of fees and charges paid in proportion to the cost or distribution of the government goods and services provided to the payer. These revenue sales are broken down into three components, namely:

(a) Sales of goods and services to other government sub-sectors - Includes all sales of goods and services by a government sub-sector to another government sub-sector. For example, the sale of educational services by the provinces and school boards to the federal government or revenue received by provinces from municipalities for provincial police services.

(b) Sales of goods and services to own business enterprises - Includes all sales of goods and services by a government sub-sector to own business enterprises. For example, fees charges to a provincial hydro-electric corporation by its provincial government for guaranteeing its debt.

(c) Other sales of goods and services - Includes all sales of goods and services to persons, businesses, etc. For example, tuition fees charged to students or sale of government statutes to businesses and individuals.

following is an extensive list of government goods and services sold:

Sales of goods include:

water, rents on buildings, equipment, etc., land, used buildings, used machinery and equipment, materials and supplies, livestock and animal products, furniture, publications, documents, forms and other printed material

Sales of services include:

court, and probate fees

tolls for the use of transportation services and facilities

concessions and franchises

fees for the use of dockage or wharfage facilities

admission fees to government museums, cultural and recreational facilities

administrative and technical fees (search, certification and registration, assaying, testing and other laboratory fees)

fees for other services rendered by government officials

tuitions, correspondence course and examination fees

amounts charged to patients for services (e.g., private or semi-private accommodations in hospitals and residential care facilities, charges to non-residents of a province, special duty nursing, etc.)

royalties on books, recordings, films, etc.

debt guarantee fees charged to government business enterprises, etc.

sales of natural resources goods and services such as camping fees, crude oil marketing fees, research and mineral analysis fees, etc.

all personal licences other than licences to own or use vehicles, boats or aircraft and licences to hunt, shoot or fish

The sale and privatization of government business enterprises and government revenue derived from them are not included in this category. Information on such transactions are presented in paragraph 6.13.

6.13 Investment income - This category is divided into four sub-categories: natural resource royalties, remitted trading profits, interest income and other investment income.

(a) Natural resource royalties - Includes all royalties on natural resources. Royalties cover leases of land ("Rentals" including rentals and fees, and bonus bids) and royalties paid on extraction. It also includes revenue from the auction of licences for the electro-magnetic spectrum. Royalties on books, recordings, films, etc., are covered in paragraph 6.12. Revenue from the auction of the licences of the electro-magnetic spectrum prior to 2008/2009 are amortized over the period of the licence. Commencing in 2008/2009 the auction of licences of the electro-magnetic spectrum is considered a sale of assets and the revenue from the auction is included in the year (period) it is received. Prior to the 1997 historical revision the natural resource royalties were included in the "Natural resource revenue" category.

(b) Remitted trading profits - Returns from own enterprises comprise two categories: remitted profits and dividends. Prior to the 1997 historical revision, remittances of profits of provincial liquor boards and lottery and gaming corporations were classified under this category. They are now included in the consumption taxes category [see paragraph 6.07 (g) and (h)]. When a government business enterprise is privatized or when sale of selected facilities of a government business enterprise takes place, the revenue created may be classified in a variety of ways, depending on the nature of the transaction and the entities involved in the transaction.

If a government sells a government business enterprise by disposing of its participation in the capital stock or in other equity of the enterprise, three cases are possible: (1) When the investment is recorded in the government's books, the gain or loss on sale of the securities constitutes a new flow of funds for the government. However, the FMS treats the value of the gain or loss as a balance sheet adjustment and excludes it from the government revenue. (2) On the other hand, if the investment is recorded on the books of a government business enterprise, the gain or loss on the sale of the investments is classified by the FMS as a revenue (investment income) of the enterprise and the remittances of such gain to the government are considered as government revenue and classified as "Remitted trading profits" under the "Investment income" category. (3) In the case where a production plant or a productive division (a physical asset) of a government owned business enterprise is sold, the gain or loss on the sale of the fixed assets represents a new flow of funds for the government business enterprise but the FMS treats this gain or loss as a balance sheet adjustment and excludes it from the enterprise revenue. However, the remittances of such gain to the government (dividends paid the parent government) are considered by the FMS, as government revenue and classified as "Remitted trading profits" under the "Investment income" category.

(c) Interest income - Includes interest received on loans and investments as well as interest on overdue taxes. Interest received by non-autonomous pension plans on the amount of debt the government is obligated to pay them, are also included here. Based on the FMS practice of showing revenue and expenditures on the gross basis of accounting, interest recovered from crown agencies and other public organizations are included in this category with an equivalent amount shown as interest on public debt on the expenditures side.

(d) Other investment income - Consists of other return on investment not classified elsewhere. Prior to the 1997 historical revision, other investment income included gains or losses on foreign exchange transactions and gains or losses on sale of securities. Those gains or losses are no longer included in any revenue category. They are now part of the financing accounts.

6.14 Other revenue from own sources

(a) Other fines and penalties - Comprises personal paid fines and penalties arising from infractions of laws, by-laws and ordinances, whether civil or criminal.

(b) Capital transfers from own sources - Includes cancellation of a liability by a creditor or similar transactions that reduce net debt of the recipient.

(c) Other donations - Includes revenue from fund-raising campaigns and other donations in cash or securities from individuals, businesses, etc.

(d) Miscellaneous revenue from own sources - Provides for revenue not elsewhere classified such as indemnities and recoveries under insurance policies, gifts, contributions from private sources, escheat and forfeitures of election deposits, as well as adjustments resulting from consolidation of two or more components of the public sector (see paragraph 8.05). The gains of the federal government on bullion are also reported here. Prior to the 1997 historical revision, seigniorage were also included in this category. Seigniorage is now excluded from the revenue because it is treated as a liability of the government.

Transfers

General purpose transfers from other government sub-sectors

6.15 General purpose transfers are broken down by level of government from which the transfers originate. Transfers from the federal government are compiled as follows:

(a) General purpose capital transfers from federal government - Includes cancellation of a liability by the federal government or similar transactions that increase the saving of the recipients. Transfers of land or buildings, are not included here, because no payments or receipts occur.

(b) Statutory subsidies - Includes provincial government revenue received in accordance with the Constitution Act and certain other legislation. The purpose of the program is to provide a source of revenue to the provinces, to compensate provinces for revenues lost on joining Confederation; and to support provincial and territorial governments and legislatures.

(c) Shares of federal taxes on preferred share dividends and on income of certain public utilities - Since 1990/1991 the federal government shares with the provinces and territories the proceeds from the net taxes that it collects with respect to preferred share dividends paid by corporations. The proceeds are included here. The federal-provincial agreement on sharing the proceeds from the income tax on certain public utilities was discontinued in 1995/1996 but transitional payments to the provinces and territories will continue until 1999/2000.

(d) Tax revenue guarantees - Represents money given to the provinces under the terms of the Federal-provincial tax revenue guarantee agreement. Under this agreement, the federal government provides a guarantee that the provinces would not suffer a loss of revenue if they adopted their personal income tax acts modeled on the federal tax acts.

(e) Equalization - Identifies transfers received from the federal government to reduce inter-provincial disparities in per capita fiscal capacity and to bring less endowed provinces up to a specified standards.

(f) Canada Health and Social Transfer (CHST) - Includes payments received under the CHST program which was introduced in 1996/1997. It replaced transfers to the provinces and territories under the Established Programs Financing (EPF) and Canada Assistance Plan (CAP) arrangements. The amounts for the CHST reported by the FMS, are net of the tax abatement (13.5 personal income tax points) allowed in Quebec since 1965.

(g) Canada Social Transfer (CST) - Includes payments under the CST program which was introduced in 2004/2005. The CHST was replaced by the CST and the Canada Health Transfer (CHT) beginning April 1, 2004.

(h) Reciprocal taxation - The reciprocal taxation agreements were nullified by the goods and services tax (GST) legislation, effective January 1, 1991. Provincial governments are not subject to the GST on their purchases, and the federal government is exempt from provincial retail sales taxes. However, eight provinces and the federal government have agreed to pay each other's specific commodity taxes, (e.g., gasoline, tobacco and alcohol taxes) and signed an agreement to waive their right to a refund.

(i) Stabilization - Represents transfers received from the federal government to protect provincial governments from precipitous declines in revenue.

(j) Other general purpose transfers from federal government - Consists of items not classified elsewhere. This includes:

Transfers from the federal government to territorial governments under the terms of the Territorial Formula Financing (TFF). This transfer enables territorial governments to provide a range of public services to their residents that are similar to that offered by provincial governments elsewhere. The new agreements that came into effect on April 1, 1999, cover Nunavut, Northwest Territories and Yukon.

The offshore offset payments from the federal government to the provinces under various federal-provincial offshore development agreements.

The one time federal compensation to provinces for their losses of revenue resulting from the harmonization of their retail sales tax with the federal GST.

Any other general purpose transfers from the federal government. At the federal level, it includes amounts equivalent to the proceeds of the 3.0 personal income tax points (granted to Quebec under the Youth Allowances Program). Because the program was abolished, Quebec returns the proceeds of the above tax points to the federal government. The federal-provincial fiscal arrangements are also discussed in paragraphs 5.30 to 5.38.

Specific purpose transfers from other government sub-sectors

6.16 Specific purpose transfers are broken down by level of government from which the transfers originate. This group covers transfers that must be applied to particular activities such as: federal transfers to provinces for the improvement of certain highways; provincial transfers to municipalities for sewage and refuse disposal; provincial transfers to education and health institutions to help them finance their operations.

Expenditures

6.17 The FMS classifies government expenditures by function. There are 17 functions and 73 sub-functions to which expenditures are allocated in the FMS (see Appendix C, Part 2). An expenditure function is defined as a classification that identifies the principal purpose for which an expenditure is made rather than the activity involved. The following examples illustrate this definition:

(a) Expenditures on the transport of pupils to and from school are classified as "Education" and not "Transportation"; because the main purpose of the expenditures are to permit pupils to receive educational services.

(b) In general, government transfers to universities are of two kinds: transfers for operating and capital expenditures and transfers for research. In the first case, transfers for operations and capital formation are classified to "Education" because the principal purpose of the transfers is to enable universities to provide educational services. In the second case, transfers for research are classified according to the purpose for which research and investigation are made. If the research grants are used by university researchers to improve existing or develop new hospital equipment, the transfer payments are classified to "Health" and not "Education." On the other hand, if the research is devoted to improve methods of instruction, the transfer payments are classified to

"Education."

(c) An expenditure resulting from a court award is classified to the function which best fits the main purpose of the award. For example, an expenditure to compensate eligible class members for damages, for loss of income, and uninsured medication and treatment costs is classified to the function Social Services, not Health.

6.18 General government services - This classification comprises of three sub-functions. They are:

(a) Executive and legislature - Covers identifiable expenditures pertaining to the constitutional, political and law enactment aspects of government activity. At the federal, provincial and territorial levels it includes outlays relating to the governor-general and lieutenant-governors, prime ministers and premiers, cabinet ministers and members of legislative assemblies and their staffs; to the construction, repair, maintenance and upkeep of official residences and legislative building; to elections, referendums and revisions of statutes. At the local level it includes all corresponding expenditure items in respect of elected and appointed officials and their staffs.

(b) General administration - Includes all expenditures on administration that cannot be allocated to more specific functions. It includes outlays for central accounting, auditing, budgeting and staffing; for tax administration and collection, for the administrative costs of servicing the public debt. Prior to the 1997 historical revision, operation and maintenance of government buildings and provision of computer services were included in this sub-function. They are now assigned to the function to which they relate.

(c) Other general government services - Includes expenditures of a general nature which cannot be allocated to the other sub-functions. Included are those in respect of central statistical organizations, intergovernment services, conventions, delegations and public receptions, general accident and damage claims, fire and public liability insurance, court litigations, planning costs for the establishment of a new provincial or territorial government and general purpose grants to organizations and individuals which cannot be more specifically allocated.

Prior to the 1997 historical revision, the government contributions as an employer to employee pension plans were classified to the sub-function "Contributions to pension plans not operated by government and payments under government operated pension plans." Because they are now assigned to the function to which they relate, this sub-function was deleted.

6.19 Protection of persons and property - Includes outlays for services provided to ensure the security of persons and property. Protection extends beyond safeguard from external aggression and criminal action; it includes measures to protect the individual from negligence and abuse, and activities to ensure the orderly transaction of affairs of the community. The category is broken down into the following seven sub-functions:

(a) National defence - Includes outlays for the armed forces and military bases and installations; it also covers expenditures related to defence research, military hospitals and colleges and schools located on military bases.

(b) Courts of law - Includes outlays pertaining to the judicial system including the Supreme Court of Canada, Federal Court of Canada, Tax Court of Canada, provincial superior courts which include both a court of general trial jurisdiction and a provincial court of appeal, provincial courts that deal with a broad range of criminal matters, litigation in the area of family law and the civil litigation in which the amount at issue is relatively small. The expenditures of the administrative tribunals which are an integral component of the judicial system are also included. These tribunals deal with labour relations, individual claims of discrimination in areas like employment, housing and access to services and facilities customarily available to the public. This sub-function also includes any expenditures concerning prosecuting, such as outlays for attorneys, coroners, witnesses, jurors, court interpreters and premises used in the judicial process.

(c) Correction and rehabilitation services - Consists of outlays in respect of the incarceration and rehabilitation of individuals convicted of criminal action and sentenced to terms in penitentiaries, jails and other detention establishments. This sub-function also covers expenditures for probation services.

(d) Policing - Includes outlays pertaining to the maintenance of law and order. It comprises expenditures for the establishment, training, operation, maintenance and equipment of police forces; specialized training establishments; transportation, communication and laboratory equipment, as well as weapons and related equipment. It also accounts for expenditures for the purchase of police services from other governments or private agencies, for the custody and detention of arrested persons pending their release on bail or appearance before court of law and for expenditures on forensic science.

(e) Firefighting - Provides for outlays pertaining to the prevention, investigation and extinction of fire, to fire investigation officers, to fire fighting forces, to specialized training establishments, to fire trucks and fire fighting equipment. It also takes into account expenditures on the purchase of firefighting services from other governments or non-government sources.

(f) Regulatory measures - Includes outlays for a wide array of services provided specifically to ensure that the public interest objectives are achieved. Under the sub-function "Regulatory measures" are recorded outlays pertaining to trusteeship services; ombudsmen and adjudicator or referee services; protection of borrowers, consumers and investors; commercial standards and business practices; superintendents of insurance; rent control; human rights; regulation of profession; film censorship; motor vehicle driver licences and highway safety; industrial accident prevention; liquor licensing boards; the registry of land titles; the inspection of buildings; electrical systems, plumbing and gas installations and other systems likely to give rise to safety problems. However, where the purpose of the program is to protect or to foster a particular industry or activity, the cost is classified under the same function as the industry or activity to which it relates. For example, the federal government outlays pertaining to the Canadian Radio-television and Telecommunications Commission (CRTC) are classified under the sub-function "Telecommunications."

(g) Other protection of persons and property - Includes outlays for special actions taken to cope with emergency situations and expenditures for permanent organizations established to deal with such contingencies [e.g., the rescue operations of the Canadian Coast Guard (CCG)]. It also includes expenditures on animal and pest control services and on activities of a protection nature not covered by the other sub-functions.

6.20 Transportation and communications - This category is divided into seven sub-functions which cover outlays for all phases of the acquisition, construction, operation and maintenance of the relevant transportation and communications facilities and equipment as well as expenditures pertaining to related engineering and technical surveys. This function now includes the government transfers to own business enterprises engaged in the transportation activities, especially public transit and railway services which were previously included in the ex-function "Transfers to own enterprises." With the establishment of the Canada Post Corporation in 1981 and the inclusion of the corporation into the government business enterprises universe of the public sector, the operations of the postal services ceased to be classified as government expenditures in the FMS. Consequently, the sub-function "Postal services" was deleted. In addition to these general outlays, each sub-function accounts for particular expenditures as follows:

(a) Air transport - At the federal level, this sub-function reflects expenditures for navigational, air traffic (i.e., transition period payments to NAV Canada) and other related services, operating subsidy payments to regional air carriers and municipal airports, grants to flying clubs and payments for international air navigational services. At the provincial level, it includes assistance to aviation industry, municipal airports and other related services. At the local level, it includes outlays related to municipal airports.

(b) Road transport - Takes into account expenditures on highways, secondary roads, roads to resource areas, boulevards, avenues and streets together with related storm sewers (where separated from sanitary sewers). Expenditures on bridges, over and underpasses and road tunnels incorporated in highways, etc., are also included as well as those ferries, usually operated by highway departments, which form integral parts of road systems. Such ferries are distinguished from major lake and seagoing vessels and their supporting operations which, if not classified as enterprises, are assigned to the sub-function "Water transport." The category also includes the costs of removing snow, debris, leaves and other deposits as well as street lighting, surface sanding and flushing, expenses pertaining to traffic control and parking facilities.

(c) Public transit - Provides for expenditures on planning and research related to public transit systems. Capital and operating subsidies to public transit systems (including rail systems) are included here.

(d) Rail transport - Accounts for expenditures on development, implementation and monitoring of policies and programs related to railway network rationalization and effectiveness. It also includes payments for railway relocation, contributions to railway passenger services infrastructure and to freight movements in certain geographical regions as well as grants for operations of railway facilities to resource areas.

(e) Water transport - Includes expenditures on development, maintenance, operation and control of navigational channels, canals, harbor and wharf facilities, ferries that do not form integral part of road systems, landings and other marine facilities. It also includes the costs of the icebreaking operations of the CCG and certain northern transportation services.

(f) Pipelines - Covers expenditures on the operation, construction, use and maintenance of pipeline as well as grants and contributions to support the operation, construction and maintenance of pipeline systems.

(g) Telecommunications - Includes disbursements for research, planning, coordinating and controlling the development of telecommunication requirements, both domestic and international. Operating expenditures of the CRTC, and other communication systems are also part of this category.

(h) Other transportation and communications - Includes outlays which, although allocated to "Transportation and communications," cannot be further identified as to sub-function or which overlap several sub-functions.

6.21 Health - Includes expenditures made to ensure that necessary health services are available to all citizens. Residential care facilities and other health and social services institutions providing medical care and professional nursing supervision are considered as institutions providing health services while those providing room and board with no or limited medical care and nursing supervision are considered as institutions providing social services (see also paragraph 6.22). Also included are expenditures of hospitals' ancillary enterprises, i.e., entities that exist to provide goods and services to patients, staff and others (food services, parking, etc.). This function is composed of four sub-functions.

(a) Hospital care - Covers outlays in respect of all kinds of hospital services, i.e., those provided by general hospitals, public health clinics, as well as by acute disease, chronic disease, convalescent, isolation and mental hospitals. It also includes expenditures pertaining to nursing schools attached to hospitals. Where nursing schools come under the responsibility of the Department of Education, the related expenditures are allocated to the sub-function "Education - post-secondary." Expenditures of all hospitals (private, public, religious, etc.) are included except for national defence and veterans hospitals whose costs are allocated to the "National defence" and "Veterans benefits" sub-functions respectively.

(b) Medical care - Comprises outlays in respect of general medical care and drug programs as well as outlays incurred for dental and visiting-nurse services and on out-patient care services. It also includes outlays for medical care provided by hospitals, public residential care facilities, WCBs and other public health and social service institutions. Transfers to private residential care facilities and other health and social service institutions to help them finance their medical care activities are included here.

(c) Preventive care - Consists of a wide variety of outlays which are intended to prevent the occurrence of diseases and to mitigate their effect. It covers public health clinics; communicable disease control services, including immunization, treatment, isolation and quarantine outside hospital premises; food and drug inspection services; hospitals which offer preventive services to patients; government establishments (not located in hospitals, e.g., residential care facilities and other health and social services institutions) providing nursing, hygiene and nutrition advisory services, and government organizations conducting research on the causes and consequences of particular diseases or addictions. Also included are transfers to private facilities providing preventive care, such as private residential care facilities.

(d) Other health services - Includes outlays on clinics for the treatment of retarded or emotionally disturbed persons and on laboratory and diagnostic services, grants to health-oriented organizations, and expenditures on other health-related services such as health department administration, health statistics, staff training and other services of health establishments (e.g., hospitals and other health and social service institutions), ambulance services, medical rehabilitation and indemnities to injured persons and their dependants which cannot be allocated to the other sub-functions. Also included are outlays on protection of health and health inspection, and expenditures of ancillary enterprises of health and social services institutions. Included are the Canada Health Transfer (CHT) payments.

6.22 Social services - Covers actions taken by a government, either alone or in co-operation with the citizenry, to offset or to forestall situations where the well-being of individuals or families is threatened by circumstances beyond their control. It goes beyond the concept of welfare which covers assistance (transfers) and services to individuals who are so disadvantaged that the universal social security services are inadequate to provide for their well-being or who fail to qualify for support from those services. The function comprises the following six sub-functions:

(a) Social assistance - Consists of transfer payments, including refundable tax credits, to help individuals and families maintain a socially acceptable level of earnings. Although the workers' compensation benefits, pension plan benefits, veteran's benefits and motor vehicle accident compensations, are considered a form of income assistance, they are reported in separate sub-function (see b, c, d and e below). This sub-function comprises the following programs: the general welfare payments to disadvantaged individuals, the refundable tax credits and rebates for low-and-middle income individuals or families (which are used more and more as instruments of social policy to offset taxation of the elderly and disadvantaged i.e., property and sales tax credits), outlays relating to contributory plans such as the CPP and QPP, and non-contributory plans, such as Old Age Security (including the guaranteed income supplement), family allowance payments and child tax benefits made under federal, provincial and territorial government programs, the employment insurance benefits, the rent supplement, the spouse's allowances and the blind and disabled persons allowances. The administration costs related to those programs are also included.

(b) Workers' compensation benefits - Includes expenditures on administration and benefits, other than rehabilitation and medical care, related to workers' compensation schemes.

(c) Pension plan benefits and other expenditures - Accounts for the following transactions:

Pensions and other benefits paid under pension schemes that are embedded in the government's budgetary framework (pay as you go plans) such as the Public Service Superannuation Plan of Saskatchewan.

Pension and other benefits paid under the non-autonomous pension schemes, i.e., plans that have full separate accounts within the Consolidated Revenue Fund but are not separate institutional units such as the federal public service superannuation account.

The change in equity of households is the difference between the sum of employee/employer contributions to non-autonomous pension plans plus the investment income of the plans and the benefits paid for the period. The difference is considered household claims on government.

(d) Veterans benefits - Includes pensions, allowances, as well as administrative costs and grants. It also includes outlays pertaining to the administration of veterans' hospitals, to the provision of medical supplies and prosthetic appliances, to the provision of medical, educational and social welfare services and to the forgiveness of loans under the Veterans' Land Act.

(e) Motor vehicle accident compensations - Includes compensations paid to victims of bodily injuries provided for by government automobile insurance plans.

(f) Other social services - Accounts for expenses related to the provision of services to old age, to persons who are unable to lead a normal life due to a physical or mental impairment, to persons temporarily unable to work due to sickness, to households with dependent children, to persons who are survivors of a deceased person (spouse, children, etc.) and to other needy persons. It also includes direct expenditures of public institutions (hospitals, residential care facilities, other health and social services institutions) providing social services and transfers to private organizations (e.g., residential care facilities) providing similar services.

Examples of services mentioned above include the operations of specialized institutions (i.e., residential care facilities) that provide lodging and board to elderly persons, children and families; provision of legal aid; home care services; transport services; services and goods provided to elderly, disabled and survivors to enable them to participate in leisure and cultural and social activities; counseling services; nursery and daycare services; essential goods such as food, clothing, fuel, etc.; rehabilitation services (for alcohol, drug, etc.) and other similar services.

6.23 Education- Includes the costs of developing, improving and operating educational systems and the provision of specific education services. Also included are expenditures of colleges and universities' ancillary enterprises, i.e., entities providing goods and services to students, staff and others (bookstores, food services, residences, parking). It is sub-divided into the following four sub-functions:

(a) Elementary and secondary education - Encompasses outlays for educational services from kindergarten to senior matriculation. It also includes expenditures for technical and vocational training which is provided separately at the secondary school level as well as expenditures for general administration and maintenance of standards, contributions of governments, as employers, to teachers pension plans, support to students, the construction of buildings and the operation of education programs. Also included are expenses for pupil transportation, and for text books, electronics, equipment and supplies used in the education process. Expenditures of schools for the handicapped, schools for Indians and Inuit and transfers to private elementary and secondary schools come are part of this sub-function.

(b) Post-secondary education - Refers to the kind of education generally obtained in universities or in degree and non-degree granting community colleges and specialized educational institutions. Included in these colleges and institutions are teachers' colleges, advanced technical institutes and junior colleges, Collèges d'enseignement général et professionnel (CEGEPs), music conservatories and schools specializing in the instruction and training of artists, and nursing education provided by universities and colleges. This category includes the transfers or direct expenditures for the operations of universities, colleges and institutions providing this kind of education. Also included are bursaries, scholarships and other types of financial assistance to students (loan forgiveness, interest relief, etc.) as well as refundable learning tax credits. Federal government contributions to registered education savings plans are classified here. The particular types of expenditures covered by the sub-function are essentially similar to those referred to in connection with the sub-function "Elementary and secondary."

(c) Special retraining services - Comprises outlays made for the purpose of up-grading the skills of individuals. It includes the cost of courses provided under the Federal Manpower Training Program and the new Labor Market Development Agreement, the purchases of on-the-job training for unemployed insurance recipients, cash allowances or subsidies to workers and persons available for work undergoing training, tax credits intended to encourage systematic employee training by corporations and other similar services. Police training is excluded as it is classified under "Protection of persons and property."

(d) Other education - Covers outlays that either overlap or cannot be allocated to the other sub-functions. It includes the general administration expenses of departments of education, the costs of statistical and research activities pertaining to education and the expenses of apprenticeship training. Payments made by one government to another or to the private sector to encourage proficiency in the official languages are also included, as are costs of special instructional arrangements such as evening classes and correspondence courses. Expenditures of ancillary enterprises of colleges and universities, e.g., bookstores and cafeterias, are included here.

6.24 Resource conservation and industrial development - This function includes a wide array of services related to the conservation and development of natural resources and the development and promotion of industries. This function has nine sub-functions:

(a) Agriculture - Covers outlays for drainage and irrigation of farm land; agricultural research and development; agricultural protection and quality control; inspection and veterinary care of farm animals; weed and agricultural product pest control; control, regulation, promotion and marketing of farm production; bonuses, subsidies and tax credits in support of farm production; grants to agriculture and farm-oriented organizations, and soil survey and conservation.

(b) Fish and game - Includes outlays for research in fish and wildlife pathology, control and regulation of fishing and hunting activities, promotion and marketing of sea foods and animal furs, conservation and rehabilitation of fish and game stocks, and financial assistance to commercial fishermen and hunters. Some of the outlays allocated here, such as the remuneration of fish and game wardens, might also be recorded under "recreation and culture - recreation" (see paragraph 6.26 below); in instances of this kind of overlap, however, priority is given to the "fish and game" sub-function.

(c) Oil and gas - Covers outlays for the control and regulation of oil and gas exploration and development, geological and mineralogical survey and research, construction of oil and gas field roads, promotion of oil and gas products, special instruction courses pertaining to oil and gas activities. Outlays incurred by the National Energy Board are included here.

(d) Forestry - Embraces expenditures for the inspection and survey of forest resources, forest ranging and fire control; research into the causes, prevention and cure of tree diseases; construction of logging roads; measurement of forest products; promotion and marketing of forest products; reforestation and grants to forestry-oriented organizations.

(e) Mining - Includes outlays for the control and regulation of mining exploration and development, geological and mineralogical survey and research, mineral testing and essaying, construction of mining roads, promotion of mining products, bonuses, subsidies and tax credits in support of mining activities and special instruction courses pertaining to mining activities.

(f) Water power - Covers expenditures for hydraulic research and survey, control and regulation of dams and other water storage facilities, promotion and planning of hydraulic power installations and flood control measures.

(g) Tourism promotion - Accounts for spending in respect of tourist bureaus, camping sites outside public parks, the improvement and expansion of hotel facilities and the promotion of tourism. It also includes outlays for assistance to convention centres.

(h) Trade and industry - Accounts for expenditures on the promotion, protection and development of general industrial and commercial activities. It includes the expenses of departments or agencies established to serve such purposes as well as grants, subsidies and refundable tax credits made to business concerns to foster them. Examples of services rendered to industries by general government bodies are research in developing industrial products, processes and equipment; technical support for the industrial, scientific and technical development; development and maintenance of industrial parks; registry of companies and other similar services.

(i) Other resource conservation and industrial development - Includes expenditures of a general nature on resource conservation and industrial development and, in particular, the administration expenses of government departments entrusted with responsibilities that straddle more than one sub-function-i.e., the ministries of natural resources' contributions to employee benefits plans which, because of data limitations, cannot be allocated to the other sub-functions.

6.25 Environment - While certain components of this function are similar to some sub-functions of "Protection of persons and property" and others with sub-function of "Health," they are grouped in this function through their common aim of ensuring the most favorable environment for people and of minimizing the deleterious effects of modern living on that environment. There are four sub-functions:

(a) Water purification and supply, sewage collection and disposal - Covers outlays for the construction, operation and maintenance of water acquisition, treatment and distribution facilities, of sewage removal and treatment facilities including expenditures on sanitary sewers and combined sanitary-storm sewers (separate storm sewers are classified under "Transportation and communications - Roads," see paragraph 6.20), booster stations, reclamation of sludge areas, and on inspection, cleaning and flushing of sewers. It also covers grants and subsidies in aid of research in this field.

(b) Garbage and waste collection and disposal - Includes outlays for these services as well as expenditures for incinerators, nuisance grounds or dumps for garbage and for waste disposal purposes. Recycling operations are included here.

(c) Pollution control - Provides for expenditures on the prevention of pollution and on obviating its detrimental effects on the environment, but only where such expenditures cannot be allocated to a more specific sub-function, e.g., "Garbage collection and disposal," "Fish and game," or "Recreation," etc. This sub-function accounts for outlays on general research and control activities; it includes grants and subsidies toward the development and use of anti-pollution devices and toward undertakings designed to restore or maintain a healthy environment.

(d) Other environmental services - Encompasses miscellaneous expenditures relating to the "Environment" function which cannot be identified with any specific sub-function or which applies to several sub-functions, e.g., the administrative expenditures of a department of the environment or a government agency engaged in environment activities.

6.26 Recreation and culture - The purpose of this function is to portray government participation in the field of leisure either through developing, improving or operating leisure facilities or through assistance payments to individuals and private organizations engaged in promoting leisure activities. The principal sub-functions are "Recreation," and "Culture." These sub-functions, however, are not mutually exclusive; frequently a given set of installations serves both recreation and culture ends. In such cases expenditures are allocated to the sub-function relating to major or predominant use made of the installations. The particular sub-functions are as follows:

(a) Recreation - Is concerned with the provision of sporting and recreational services. It includes outlays on stadiums, community centers, swimming pools, beaches, marinas, golf courses, skating rinks and arenas, amusement parks, exhibition grounds, parks and playgrounds. While expenditures on parks can be a "Resource conservation" function, such expenditures are classified as "Recreation" because of the association of these parks with leisure activity.

(b) Culture - Covers outlays on archives, historic sites, art galleries, museums, libraries, centers for the performing arts, zoos, aquariums, aviaries and planetariums.

(c) Broadcasting - Covers outlays for management, operation and support of broadcasting services associated with education and culture. Because CBC and the provincial and territorial government broadcasting agencies provide education and cultural programming, their activities are included in this sub-function.

(d) Other recreation and culture - Encompasses administrative expenditures of departments and agencies with activities spanning both recreation and culture as well as expenditures on cinematography, amateur sport and miscellaneous services related to recreation and culture. This category includes the video and film production refundable tax credits which are also considered as expenditures within the FMS. (see paragraph 5.09).

6.27 Labour, employment and immigration - This function includes outlays related to the development and promotion of labour relations and fair employment conditions, as well as to various immigration programs. The function has three sub-functions:

(a) Labour and employment - Provides for expenditures for labour market research and matters pertaining to employer and employee relations, including the promotion of improved working conditions and the provision of arbitration and conciliation services in collective bargaining. It also covers the expenditures of employment agencies or institutions as well as that pertaining to the application of employment standards and minimum wage laws.

(b) Immigration - Takes account of expenditures on the promotion of immigration, on assistance to immigrants as well as outlays incurred in controlling the entry of individuals into the country.

(c) Other labour, employment and immigration - Includes the administration expenditures of government departments or agencies whose activities straddle the "Labour and employment" and "Immigration" sub-functions. It also includes expenditures for the registration of citizens and the promotion of citizenship-oriented activities.

6.28 Housing - This function now includes all government outlays on housing with the exception of transfers to individuals made to help alleviate their current rental cost (rent supplement) which are allocated to the sub-function "Social assistance" (see paragraph 6.22 above). It also covers the expenditures of Canada Mortgage and Housing Corporation (CMHC) (which for its housing operations is considered to be a special fund of the federal government) and provincial housing authorities which, prior to the 1997 historical revision, were classified as government business enterprises. The function "Housing" has three sub-functions:

(a) Housing operations - Covers expenditures on additions to and renovation or improvement of the stock of housing which it owns, on the operations and maintenance of rental housing owned by government and on research, general administration and other activities related to housing operations.

(b) Housing assistance - Includes transfers to individuals, groups, corporations and other governments (and their special funds) to assist in providing additions to the existing stocks of housing not owned by the transferring government or to renovate or improve that stocks, to owners of rental accommodation to enable them to provide housing at less than market rates, to qualified persons to assist them to buy homes. It also accounts for other forms of assistance related to housing.

(c) Other housing - Covers outlays that either overlap or cannot be allocated to the other sub-functions.

6.29 Foreign affairs and international assistance - Provides for expenditures pertaining to the formal relations of Canada with other sovereign states. It accounts for contributions made to foster economic development and to improve social conditions in foreign lands, e.g., the expenditures of the Canadian International Development Agency. Expenditures on trade or immigration promotion abroad and cultural exchange with foreign countries are respectively classified under "Trade and industry," "Immigration" and "Culture."

6.30 Regional planning and development - Covers expenditures related to community and region development affairs and services. There are three sub-functions under this function:

(a) Planning and zoning - Includes expenditures of planning boards, on research and planning, official plans and the operations of departments and agencies entrusted with matters relating to planning and zoning.

(b) Community and regional development - Accounts for expenditures of departments, agencies and urban communities engaged in urban renewal projects, beautification and land rehabilitation, general land assembly as well as other expenditures specifically related to community and regional development and assistance, e.g., the National Capital Commission, the provincial regional development corporations' expenditures and land claim settlements.

(c) Other regional planning and development - Covers all expenditures which cannot be specifically attributed, such as expenditures for the establishment of standard municipal assessment procedures, approval of municipal budgets and administration of assistance for municipal financing.

Research establishments - This function provides for expenditures pertaining to organizations like the National Research Council of Canada and certain provincial research establishments whose prime purpose is pure or applied scientific research and the promotion of developments resulting from such activities. Also included are grants to individuals and non-government establishments engaged in similar types of research as well as refundable tax credits for research and development. It does not cover the expenditures of the Medical Research Council which is allocated to the function "Health."

General purpose transfers to other government sub-sectors - As in the case of revenue, intergovernment transfers are classified and specified by the level of government providing the money. The main federal general purpose transfers paid are described in paragraph 6.15. Transfers paid in lieu of property taxes, which prior to the 1997 historical revision, were reported under this caption, are now functionalized. Included in this function is the CHST program which has replaced the EPF and CAP transfers previously classified as specific purpose transfers. Effective April 1, 2004 the CHST was restructured into two new transfers. The CHST was apportioned between the Canada Health Transfer (CHT), supporting provincial and territorial health programs and the Canada Social Transfer (CST), supporting post-secondary education and social programs, including early childhood development and early learning and child care services. The CST is classified as a general purpose transfer while the CHT is classified under the health sub-function "Other health services." Also included is Quebec's transfer to the federal government of the proceeds of the 3.0 personal income tax points granted to Quebec under the old Youth Allowances Program. Specific purpose transfers are not included here. Because they are made on the condition that the recipient carries out specific programs, they are included in the related expenditures function.

Debt charges - This category is sub-divided into "Interest" and "Other debt charges." It excludes debt retirement as well as realized and unrealized gains and losses on foreign exchange which are now classified as part of the financing account, and not considered as expenditures.

(a) Interest - Includes interest paid in respect of:

Bank overdrafts, loans and advances, certificates of deposits, bonds and debentures, mortgages, notes.

Liabilities to non-autonomous pension plans, e.g., the federal government liabilities to Public Service and Canadian Forces Superannuation Accounts.

Other forms of borrowing.

(b) Other debt charges - Covers commissions and other charges on sale of securities, net discounts (or the amount thereof amortized) on sale of securities, net premiums (or the amount thereof amortized) on purchase of securities, bank service charges, and other charges pertaining to the servicing of the public debt excluding administrative costs which are classified under "General government services."

 Other expenditures - This category provides for expenditures which cannot be allocated to any of the other functions. It is occasionally used in the estimate cycles to include contingency reserves which are there mainly to handle unforeseen changes in the economy. It also includes the balancing adjustments as a result of consolidating components of the public sector. See paragraph 8.05 for details on these consolidation balancing adjustments.