Presentation on theme: "The Federal Government’s Budget. The government ’ s fiscal year runs from April 1 to March 31. The upcoming budget will estimate revenues and expenditures."— Presentation transcript:
The government ’ s fiscal year runs from April 1 to March 31. The upcoming budget will estimate revenues and expenditures for the next fiscal period (April 1, 2015 to March 31, 2016). It is expect to be released in April.
What are the government ’ s expenditures? The federal government is responsible for matters of national concern, such as defence, international trade and public safety. To deliver on these responsibilities the federal government must spend money. These costs are known as expenditures. The projected expenditures for 2015-2016 are $292.6 billion.
What are the government ’ s revenues? In order for the federal government to pay for its expenditures, the government collects money from individuals and businesses through taxes and other forms of income or profits. The money collected or earned is called revenue. Projected revenue for 2015-2016 is $294.5 billion.
Surplus vs. Deficit A surplus occurs when you have more revenue than expenditures. A deficit happens when you have more expenditures than revenue, or when you are spending more than you are earning. The federal government initially projected a surplus of $6.4 billion for next year. In the fall economic update, the surplus was adjusted to $1.9 billion.
How much is our federal debt? When you have a deficit, you need to borrow money to cover the shortfall or gap. The money you borrow becomes your debt. Your debt is the accumulation of annual deficits. The federal government ’ s current debt is approximately $613.9 billion.
How much interest do we pay? Just like individuals and businesses, the government has to pay interest on its debt. Interest is the amount charged by lenders to carry the debt. Most of this debt is owed to Canadians, including citizens and domestic institutions holding federal bonds, treasury bills and other forms of the debt. Next year, the federal government ’ s interest charges are expected to be $30 billion.
Discussion Questions Are you surprised with the amount of Canada ’ s debt (approximately $615 billion)? The 2015-2016 federal budget is expected to include a surplus. What should the government do with the surplus?