Current transfers paid

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The concept used for the SPSD/M is the income tax paid on the income of the reference year, whether it was paid during the calendar year or at tax filing time (usually the following spring). Any amounts paid in April of the reference year for the previous year's balance of liabilities are not considered.

For practical and quality reasons, the macroeconomic reference period for income taxes is different as it is on a cash basis instead of using an accrual method referring to the period of the economic activity: all amounts paid during the year as income tax are counted whether they are for past, current or future liabilities net of any over-payments for prior years. This generates inconsistencies within the MEA and renders reconciliations more difficult. The inconsistencies would be greater in periods when income tax rates or economic activity is more variable.

In addition to government income taxes paid, while the SPSD/M includes only employees’ contributions to social insurance plans - such as premium payments for EI, CPP/QPP, provincial health premiums and various other federal and provincial taxes - the MEA concept includes both employees’ and employers’ contributions to those social insurance plans.

As noted above, employer pension plan income (benefits) are included in the current transfers received from corporations, while the current transferred paid to corporations include all income that is not actually received by households (contributions and investment income).

Transfers to NPISH mainly include charitable donations, while transfers to non-residents are mainly payments of income taxes to foreign government on earnings received from investments in foreign securities, as well as transfers to non-resident households for purposes such as providing financial assistance.