Archived - The Fiscal Monitor A publication of the Department of Finance: 2015-03

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March 2015: budgetary deficit of $3.0 billion

There was a budgetary deficit of $3.0 billion in March 2015, down $3.7 billion from the budgetary deficit reported for March 2014. Revenues increased by $4.6 billion, or 18.6 per cent, reflecting significant increases in corporate income tax revenues and other revenues. Program expenses increased by $1.3 billion, or 4.5 per cent, reflecting increases in major transfers to persons and other levels of government and direct program expenses. Public debt charges decreased by $0.4 billion, or 16.6 per cent, largely reflecting a lower average effective interest rate on the stock of interest-bearing debt.

April 2014 to March 2015: budgetary surplus of $2.9 billion

For the April to March period of the 2014–15 fiscal year, the Government posted a budgetary surplus of $2.9 billion, compared to a deficit of $11.4 billion reported for the same period of 2013–14. Revenues were up $11.7 billion, or 4.4 per cent, reflecting increases in most revenue streams. Program expenses were down $1.2 billion, or 0.5 per cent, reflecting a decrease in direct program expenses, offset in part by increases in major transfers to persons and other levels of government. Public debt charges were down $1.5 billion, or 5.3 per cent, reflecting a lower average effective interest rate on interest-bearing debt.

The April 2014 to March 2015 monthly results are not the final results for the year as a whole. The final results will also reflect end-of-year adjustments that will be made once further information becomes available, including the accrual of tax revenues reflecting assessments of tax returns and valuation adjustments for assets and liabilities. In addition, these results do not include the fiscal impact of announced Government initiatives such as enhancements to the New Veterans Charter ($1.6 billion) and the Universal Child Care Benefit ($1.1 billion). The fiscal impact of these initiatives will be recorded once Bill C-59, the Economic Action Plan 2015 Act, No. 1, receives Royal Assent. Taking these and other expected year-end adjustments into account, results to date are broadly in line with a small deficit in 2014–15, as projected in Budget 2015.

The Government will release the final audited outcome for 2014–15 in the Annual Financial Report of the Government of Canada in the fall.

There was a budgetary deficit of $3.0 billion in March 2015, down $3.7 billion from the budgetary deficit reported for March 2014.

Revenues in March 2015 totalled $29.1 billion, up $4.6 billion, or 18.6 per cent, from March 2014.

Program expenses in March 2015 were $30.2 billion, up $1.3 billion, or 4.5 per cent, from March 2014.

Public debt charges decreased by $0.4 billion, or 16.6 per cent, largely reflecting a lower average effective interest rate on the stock of interest-bearing debt.

For the April to March period of the 2014–15 fiscal year, the Government posted a budgetary surplus of $2.9 billion, compared to a deficit of $11.4 billion reported for the same period of 2013–14.

Revenues increased by $11.7 billion, or 4.4 per cent, to $279.0 billion.

Program expenses were $249.4 billion, down $1.2 billion, or 0.5 per cent, from the same period the previous year.

Public debt charges decreased by $1.5 billion, or 5.3 per cent, largely reflecting a lower average effective interest rate on the stock of interest-bearing debt.

Revenues and expenses (April 2014 to March 2015)

Revenues and expenses (April 2014 to March 2015) - For details, refer to preceding paragraphs.
Note: Totals may not add due to rounding.

The budgetary balance is presented on an accrual basis of accounting, recording government revenues and expenses when they are earned or incurred, regardless of when the cash is received or paid. In contrast, the financial source/requirement measures the difference between cash coming in to the Government and cash going out. This measure is affected not only by changes in the budgetary balance but also by the cash source/requirement resulting from the Government’s investing activities through its acquisition of capital assets and its loans, financial investments and advances, as well as from other activities, including payment of accounts payable and collection of accounts receivable, foreign exchange activities, and the amortization of its tangible capital assets. The difference between the budgetary balance and financial source/requirement is recorded in non-budgetary transactions.

With a budgetary surplus of $2.9 billion and a financial requirement of $7.2 billion from non-budgetary transactions, there was a financial requirement of $4.3 billion for the April 2014 to March 2015 period, compared to a financial source of $15.5 billion for the same period the previous year. The change in the financial source/requirement over the previous year mainly reflects reduced repayments in 2014–15 of principal on assets maturing under the Insured Mortgage Purchase Program, offset in part by the improvement in the budgetary balance in 2014–15.

The Government financed the financial requirement of $4.3 billion and increased cash balances by $1.9 billion by increasing unmatured debt by $6.2 billion. The increase in unmatured debt was achieved primarily through the issuance of marketable bonds.

The level of cash balances varies from month to month based on a number of factors including periodic large debt maturities, which can be quite volatile on a monthly basis. Cash balances at the end of March 2015 stood at $28.0 billion, up $1.9 billion from their level at the end of March 2014.

Table 1
Summary statement of transactions
$ millions

March April to March


20141 2015 2013–141 2014–15
Budgetary transactions
Revenues 24,530 29,099 267,347 279,022
Expenses
Program expenses -28,889 -30,176 -250,645 -249,449
Public debt charges -2,298 -1,917 -28,121 -26,632


Budgetary balance (deficit/surplus) -6,657 -2,994 -11,419 2,941
Non-budgetary transactions 13,481 2,517 26,889 -7,216


Financial source/requirement 6,824 -477 15,470 -4,275
Net change in financing activities -10,996 36 -13,714 6,153


Net change in cash balances -4,172 -441 1,756 1,878
Cash balance at end of period 26,072 27,952
Note: Positive numbers indicate a net source of funds. Negative numbers indicate a net requirement for funds. 1 Certain comparative figures have been restated to reflect a change in the Government's accounting policy for bond buyback operations as reported in the Annual Financial Report of the Government of Canada for 2013–14.

Table 2
Revenues

March April to March


2014
($ millions)
2015
($ millions)
Change
(%)
2013–14
($ millions)
2014–15
($ millions)
Change
(%)
Tax revenues
Income taxes
Personal income tax 10,924 11,530 5.5 130,364 133,581 2.5
Corporate income tax 3,294 5,741 74.3 34,967 39,223 12.2
Non-resident income tax 602 666 10.6 6,543 6,378 -2.5


Total income tax 14,820 17,937 21.0 171,874 179,182 4.3
Excise taxes and duties
Goods and Services Tax 2,072 2,086 0.7 30,461 30,998 1.8
Energy taxes 444 374 -15.8 5,436 5,446 0.2
Customs import duties 310 393 26.8 4,210 4,558 8.3
Other excise taxes and duties 363 416 14.6 5,271 5,732 8.7


Total excise taxes and duties 3,189 3,269 2.5 45,378 46,734 3.0


Total tax revenues 18,009 21,206 17.8 217,252 225,916 4.0
Employment Insurance premiums 2,428 2,419 -0.4 21,601 22,354 3.5
Other revenues 4,093 5,474 33.7 28,494 30,752 7.9


Total revenues 24,530 29,099 18.6 267,347 279,022 4.4
Note: Totals may not add due to rounding.

Table 3
Expenses

March April to March


2014
($ millions)
2015
($ millions)
Change
(%)
2013–14
($ millions)
2014–15
($ millions)
Change
(%)
Major transfers to persons
Elderly benefits 3,591 3,786 5.4 41,862 43,763 4.5
Employment Insurance benefits 1,567 2,127 35.7 17,425 18,382 5.5
Children's benefits 1,348 1,185 -12.1 13,421 13,049 -2.8


Total 6,506 7,098 9.1 72,708 75,194 3.4
Major transfers to other levels
of government
Support for health and other
social programs
Canada Health Transfer 2,544 2,676 5.2 30,543 32,114 5.1
Canada Social Transfer 1,018 1,049 3.0 12,215 12,582 3.0


Total 3,562 3,725 4.6 42,758 44,696 4.5
Fiscal arrangements and other transfers 1,916 1,959 2.2 19,833 20,506 3.4
Canada's cities and communities 110 15 -86.4 2,107 1,973 -6.4
Quebec Abatement -357 -136 -61.9 -4,223 -4,234 0.3


Total 5,231 5,563 6.3 60,475 62,941 4.1
Direct program expenses
Transfer payments
Aboriginal Affairs and
Northern Development
1,051 1,952 85.7 6,160 7,444 20.8
Agriculture and Agri-Food 317 417 31.5 1,539 1,290 -16.2
Employment and Social Development 857 929 8.4 6,128 6,097 -0.5
Foreign Affairs, Trade and Development 1,323 1,511 14.2 3,872 3,904 0.8
Health 340 319 -6.2 2,830 2,949 4.2
Industry 582 414 -28.9 2,803 2,399 -14.4
Other 1,825 1,522 -16.6 15,125 11,604 -23.3


Total 6,295 7,064 12.2 38,457 35,687 -7.2
Other direct program expenses
Crown corporations 632 1,303 106.2 7,445 8,226 10.5
National Defence 4,051 3,426 -15.4 22,626 21,804 -3.6
All other departments
and agencies
6,174 5,722 -7.3 48,934 45,597 -6.8


Total other direct program expenses 10,857 10,451 -3.7 79,005 75,627 -4.3


Total direct program expenses 17,152 17,515 2.1 117,462 111,314 -5.2


Total program expenses 28,889 30,176 4.5 250,645 249,449 -0.5
Public debt charges1 2,298 1,917 -16.6 28,121 26,632 -5.3


Total expenses 31,187 32,093 2.9 278,766 276,081 -1.0
Note: Totals may not add due to rounding. 1 Comparative figures have been restated to reflect a change in the Government's accounting policy for bond buyback operations as reported in the Annual Financial Report of the Government of Canada for 2013–14.

Table 4
The budgetary balance and financial source/requirement
$ millions

March April to March


2014 2015 2013–14 2014–15
Budgetary balance (deficit/surplus) -6,657 -2,994 -11,419 2,941
Non-budgetary transactions
Capital investment activities -195 -253 -3,847 -3,802
Other investing activities 3,861 -61 40,670 3,040
Pension and other accounts 727 -86 5,485 2,018
Other activities
Accounts payable, receivables, accruals and allowances 8,302 7,749 -5,457 832
Foreign exchange activities 644 -4,872 -13,513 -12,756
Amortization of tangible capital assets 142 40 3,551 3,452


Total other activities 9,088 2,917 -15,419 -8,472


Total non-budgetary transactions 13,481 2,517 26,889 -7,216


Financial source/requirement 6,824 -477 15,470 -4,275
Note: Totals may not add due to rounding.

Table 5
Financial source/requirement and net financing activities
$ millions

March April to March


2014 2015 2013–14 2014–15
Financial source/requirement 6,824 -477 15,470 -4,275
Net increase (+)/decrease (-) in financing activities
Unmatured debt transactions
Canadian currency borrowings
Marketable bonds -8,864 4,397 4,273 14,495
Treasury bills -1,800 -9,500 -27,700 -17,300
Retail debt -55 -22 -1,191 -684
Other 0 0 0 0


Total -10,719 -5,125 -24,618 -3,489
Foreign currency borrowings -242 4,553 5,227 4,237


Total -10,961 -572 -19,391 748
Cross-currency swap revaluation 20 125 5,745 4,343
Unamortized discounts and premiums on market debt1 -76 169 -57 1,112
Obligations related to capital leases and other unmatured debt 21 314 -11 -50


Net change in financing activities -10,996 36 -13,714 6,153
Change in cash balance -4,172 -441 1,756 1,878
Note: Totals may not add due to rounding. 1 Comparative figures have been restated to reflect a change in the Government's accounting policy for bond buyback operations as reported in the Annual Financial Report of the Government of Canada for 2013–14.

Table 6
Condensed statement of assets and liabilities
$ millions

March 31,
2014
March 31,
2015
Change
Liabilities
Accounts payable and accrued liabilities 111,421 120,001 8,580
Interest-bearing debt
Unmatured debt
Payable in Canadian currency
Marketable bonds 473,319 487,814 14,495
Treasury bills 152,990 135,690 -17,300
Retail debt 6,327 5,643 -684

Subtotal 632,636 629,147 -3,489
Payable in foreign currencies 16,030 20,267 4,237
Cross-currency swap revaluation 2,326 6,669 4,343
Unamortized discounts and premiums on market debt 3,184 4,296 1,112
Obligations related to capital leases and other unmatured debt 4,782 4,732 -50

Total unmatured debt 658,958 665,111 6,153
Pension and other liabilities
Public sector pensions 153,083 152,408 -675
Other employee and veteran future benefits 71,409 73,964 2,555
Other liabilities 5,914 6,052 138

Total pension and other liabilities 230,406 232,424 2,018

Total interest-bearing debt 889,364 897,535 8,171

Total liabilities 1,000,785 1,017,536 16,751
Financial assets
Cash and accounts receivable 128,574 138,200 9,626
Foreign exchange accounts 72,262 85,018 12,756
Loans, investments, and advances (net of allowances)1 117,635 112,189 -5,446

Total financial assets 318,471 335,407 16,936

Net debt 682,314 682,129 -185
Non-financial assets 70,433 70,783 350

Federal debt (accumulated deficit) 611,881 611,346 -535
Note: Totals may not add due to rounding. 1 March 31, 2015 amount includes $2.4 billion in other comprehensive losses from enterprise Crown corporations and other government business enterprises for the April 2014 to March 2015 period.

Note: Unless otherwise noted, changes in financial results are presented on a year-over-year basis.

For inquiries about this publication, contact Glenn Purves at 613-369-5655.

May 2015

© Her Majesty the Queen in Right of Canada (2015)

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ISSN: 1487-0134

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