Transfer Payments

Transfer payments are direct payments from governments to other governments or to individuals, a mechanism for providing social security, income support and for alleviating regional disparities. Federal transfer payments to individuals include family allowances, old-age pensions and employment insurance. Federal transfer payments to provinces, including equalization payments, cash payments for medicare and post-secondary education under the Established Programs Financing Act and other, smaller programs, represent about 20% of federal spending and a large proportion of provincial revenue. Transfer payments from provincial governments to local governments, school boards, universities and hospitals are part of provincial PUBLIC FINANCE.