Slide Deck A: Budget Basics

Three Levels of Government Canada is a large country with different needs and interests. To serve citizens most effectively, there are three levels of government: Federal Provincial/Territorial Municipal/Local Each level has its own structure of elected representatives and appointed officials, and a unique set of responsibilities.

Federal The federal government is responsible for all national matters. For example: Defence and armed forces Public safety International trade The environment Citizenship and immigration

Provincial/Territorial Provincial or territorial governments look after regional issues. For example: Health-care delivery Agriculture Transportation Education Energy

Municipal/Local Local concerns are the responsibility of your municipal (or local) government. For example: Garbage and recycling Water and sewer Parks and playgrounds Public transit Fire protection

What is a budget? A budget is a financial plan or forecast – a breakdown of money to be received and money to be spent for a specific period. It helps to determine if you are able to save or need to borrow money, or whether you should reconsider certain spending decisions, to meet your priorities. Budgets are used by individuals, businesses, governments and organizations.

What makes up a budget? A budget involves two components: Income/Revenue: ‘money in’, money received, money earned, incoming money. Expenses/Expenditures: ‘money out,’ money spent, costs, payment for goods and services, outflow of money.

Surplus vs. Deficit A surplus occurs when you have more revenue than expenses. A deficit happens when you have more expenses than revenue, or when you spend more than you earn.

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 Budget The government’s fiscal year runs from April 1 to March 31. Each annual budget forecasts revenue and expenses for this period. The upcoming budget will estimate revenues and expenditures for the next fiscal period (April 1, 2019 to March 31, 2020). It will likely be released in February or March of 2019.

Discussion Questions What would happen if people, businesses or the government failed to budget their finances? Do you think it is important for you to care about the federal budget? Why should the federal government be consulting with youth about the budget?