Archived - The Fiscal Monitor A publication of the Department of Finance: 2016-01
The Fiscal Monitor provides an overview of monthly and year-to-date financial results for the Government of Canada. It is prepared in accordance with the same accounting policies used in the annual audited financial statements of the Government of Canada. Summary financial results reported in The Fiscal Monitor are based on financial transactions recorded in the Accounts of Canada, maintained by the Receiver General for Canada.
There can be significant volatility in monthly results due to the timing of revenue receipts and expense recognition. For instance, a large share of government spending is typically reported in the March Fiscal Monitor. For fiscal year 2015–16, while a surplus is expected for February, Budget 2016 projects that the cumulative budgetary balance will deteriorate to reach a year-end deficit of $5.4 billion.
In this context, the year-to-date cumulative surplus is expected to be overtaken by:
- A significant deficit in March, as historically, a large share of total expenses is recorded in that month (see chart below).
- Negative year-end adjustments relating to corporate income tax revenues, reflecting actual results for the 2015 tax year. Although the recent decline in oil prices is unprecedented, negative year-end adjustments have been recorded in previous years following periods of economic weakness.
- The cost of measures undertaken to improve benefits for veterans announced in Budget 2016.
March budgetary balance
January 2016: budgetary surplus of $1.1 billion
There was a budgetary surplus of $1.1 billion in January 2016, compared to a surplus of $2.2 billion in January 2015. Revenues increased by $1.4 billion, or 5.4 per cent, reflecting increases in most revenue streams. Program expenses increased by $2.5 billion, or 11.8 per cent, reflecting increases in major transfers to persons and other levels of government and direct program expenses. Public debt charges increased by $1 million, or 0.1 per cent.
April 2015 to January 2016: budgetary surplus of $4.3 billion
For the April 2015 to January 2016 period of the 2015–16 fiscal year, the Government posted a budgetary surplus of $4.3 billion, compared to a surplus of $1.3 billion reported for the same period of 2014–15. Revenues were up $15.6 billion, or 7.0 per cent, reflecting increases in all revenue streams. Program expenses were up $13.7 billion, or 6.9 per cent, reflecting increases in major transfers to persons and other levels of government and direct program expenses. Public debt charges were down $1.1 billion, or 4.8 per cent, largely reflecting lower average effective interest rates on Government of Canada bonds and treasury bills.
There was a budgetary surplus of $1.1 billion in January 2016, compared to a surplus of $2.2 billion in January 2015.
Revenues in January 2016 totalled $26.8 billion, up $1.4 billion, or 5.4 per cent, from January 2015.
- Personal income tax revenues were up $0.7 billion, or 5.3 per cent.
- Corporate income tax revenues were up $0.1 billion, or 4.1 per cent.
- Non-resident income tax revenues were up $0.1 billion, or 10.5 per cent.
- Excise taxes and duties were up $0.3 billion, or 7.3 per cent. Goods and Services Tax (GST) revenues increased by $0.2 billion, energy taxes decreased by $5 million, customs import duties increased by $0.1 billion, and other excise taxes and duties increased by $4 million.
- Employment Insurance (EI) premium revenues were up $32 million, or 1.2 per cent.
- Other revenues, consisting of net profits from enterprise Crown corporations, revenues of consolidated Crown corporations, revenues from sales of goods and services, returns on investments, net foreign exchange revenues and miscellaneous revenues, were up by $0.2 billion, or 7.0 per cent.
Program expenses in January 2016 were $23.7 billion, up $2.5 billion, or 11.8 per cent, from January 2015.
- Major transfers to persons, consisting of elderly, EI and children’s benefits, increased by $1.0 billion, or 15.9 per cent. Elderly benefits increased by $0.2 billion, or 4.6 per cent, due to growth in the elderly population and changes in consumer prices, to which benefits are fully indexed. EI benefit payments increased by $0.5 billion, or 27.1 per cent, reflecting in part year-over-year differences in the timing of payments. Children’s benefits, which consist of the Canada Child Tax Benefit and the Universal Child Care Benefit (UCCB), increased by $0.4 billion, or 37.7 per cent, largely reflecting increased benefits related to the enhancement and expansion of the UCCB in 2015.
- Major transfers to other levels of government consist of federal transfers in support of health and other social programs (primarily the Canada Health Transfer and the Canada Social Transfer), fiscal arrangements and other transfers (Equalization, transfers to the territories, as well as a number of smaller transfer programs), transfers to provinces on behalf of Canada’s cities and communities, and the Quebec Abatement. Major transfers to other levels of government increased by $0.5 billion, or 9.6 per cent, largely reflecting legislated growth in the Canada Health Transfer, the Canada Social Transfer, Equalization transfers and transfers to the territories, as well as a downward adjustment to the Quebec Abatement, based on the latest estimated value of these tax point transfers.
- Direct program expenses include transfer payments to individuals and organizations not included in major transfers to persons and other levels of government, and other direct program expenses, which consist of operating expenses of National Defence, other departments and agencies, and expenses of Crown corporations. Direct program expenses were up $1.0 billion, or 10.2 per cent. Within direct program expenses:
- Transfer payments increased by $0.8 billion, or 19.8 per cent, primarily reflecting higher claims expenses at Indigenous and Northern Affairs Canada.
- Other direct program expenses increased by $0.2 billion, or 3.9 per cent.
Public debt charges increased by $1 million, or 0.1 per cent.
For the April 2015 to January 2016 period of the 2015–16 fiscal year, there was a budgetary surplus of $4.3 billion, compared to a surplus of $1.3 billion reported during the same period of 2014–15.
Revenues increased by $15.6 billion, or 7.0 per cent, to $238.8 billion.
- Personal income tax revenues were up $6.2 billion, or 5.6 per cent.
- Corporate income tax revenues were up $4.4 billion, or 16.3 per cent.
- Non-resident income tax revenues were up $0.3 billion, or 5.9 per cent.
- Excise taxes and duties were up $2.9 billion, or 7.2 per cent. GST revenues increased by $1.9 billion, or 7.1 per cent, energy taxes by $0.1 billion, customs import duties by $0.7 billion, and other excise taxes and duties by $0.1 billion.
- EI premium revenues were up $0.6 billion, or 3.2 per cent, reflecting growth in earnings.
- Other revenues were up $1.3 billion, or 5.5 per cent, largely reflecting increased profits of enterprise Crown corporations.
For the April 2015 to January 2016 period, program expenses were $212.8 billion, up $13.7 billion, or 6.9 per cent, from the same period the previous year.
- Major transfers to persons were up $7.0 billion or 11.3 per cent. Elderly benefits increased by $1.5 billion, or 4.1 per cent, reflecting growth in the elderly population and changes in consumer prices, to which benefits are fully indexed. EI benefit payments increased by $1.4 billion, or 9.7 per cent, and children’s benefits were up $4.1 billion, or 37.8 per cent, largely reflecting increased benefits related to the enhancement and expansion of the UCCB.
- Major transfers to other levels of government were up $2.4 billion, or 4.6 per cent, largely reflecting legislated growth in the Canada Health Transfer, the Canada Social Transfer, Equalization transfers and transfers to the territories.
- Direct program expenses were up $4.3 billion, or 5.1 per cent. Within direct program expenses:
- Transfer payments decreased by $0.2 billion, or 0.8 per cent, largely reflecting the accelerated repayment of contributions by Pratt & Whitney Canada, offset in part by higher claims expenses at Indigenous and Northern Affairs Canada.
- Other direct program expenses increased by $4.5 billion, or 7.7 per cent, due in large part to an increase in Crown corporation expenses and an increase in government pension and benefit costs based on the Government’s latest actuarial valuations.
Public debt charges decreased by $1.1 billion, or 4.8 per cent, largely reflecting lower average effective interest rates on Government of Canada bonds and treasury bills.
Revenues and expenses (April 2015 to January 2016)
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 $4.3 billion and a financial requirement of $21.5 billion from non-budgetary transactions, there was a financial requirement of $17.3 billion for the April 2015 to January 2016 period, compared to a financial requirement of $6.1 billion for the same period the previous year.
The Government financed its financial requirement of $17.3 billion and increased cash balances by $22.2 billion by increasing unmatured debt by $39.5 billion. The increase in unmatured debt was achieved primarily through the issuance of marketable bonds and treasury bills.
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 January 2016 stood at $50.1 billion, up $13.4 billion from their level at the end of January 2015.
Table 1
Summary statement of transactions
$ millions
January | April to January | |||
---|---|---|---|---|
|
|
|||
2015 | 2016 | 2014–15 | 2015–16 | |
Budgetary transactions | ||||
Revenues | 25,415 | 26,775 | 223,282 | 238,839 |
Expenses | ||||
Program expenses | -21,232 | -23,732 | -199,059 | -212,766 |
Public debt charges | -1,972 | -1,973 | -22,914 | -21,805 |
|
|
|||
Budgetary balance (deficit/surplus) | 2,211 | 1,070 | 1,309 | 4,268 |
Non-budgetary transactions | -8,983 | -629 | -7,382 | -21,539 |
|
|
|||
Financial source/requirement | -6,772 | 441 | -6,073 | -17,271 |
Net change in financing activities | 15,407 | 10,752 | 16,769 | 39,466 |
|
|
|||
Net change in cash balances | 8,635 | 11,193 | 10,696 | 22,195 |
Cash balance at end of period | 36,768 | 50,146 |
Table 2
Revenues
January | April to January | |||||
---|---|---|---|---|---|---|
|
|
|||||
2015 ($ millions) |
2016 ($ millions) |
Change (%) |
2014–15 ($ millions) |
2015–16 ($ millions) |
Change (%) |
|
Tax revenues | ||||||
Income taxes | ||||||
Personal income tax | 12,869 | 13,545 | 5.3 | 110,659 | 116,843 | 5.6 |
Corporate income tax | 2,793 | 2,907 | 4.1 | 26,949 | 31,330 | 16.3 |
Non-resident income tax | 977 | 1,080 | 10.5 | 5,213 | 5,519 | 5.9 |
|
|
|||||
Total income tax | 16,639 | 17,532 | 5.4 | 142,821 | 153,692 | 7.6 |
Excise taxes and duties | ||||||
Goods and Services Tax | 2,583 | 2,778 | 7.5 | 26,743 | 28,654 | 7.1 |
Energy taxes | 460 | 455 | -1.1 | 4,610 | 4,756 | 3.2 |
Customs import duties | 356 | 440 | 23.6 | 3,775 | 4,447 | 17.8 |
Other excise taxes and duties | 424 | 428 | 0.9 | 4,935 | 5,073 | 2.8 |
|
|
|||||
Total excise taxes and duties | 3,823 | 4,101 | 7.3 | 40,063 | 42,930 | 7.2 |
|
|
|||||
Total tax revenues | 20,462 | 21,633 | 5.7 | 182,884 | 196,622 | 7.5 |
Employment Insurance premiums | 2,718 | 2,750 | 1.2 | 17,220 | 17,772 | 3.2 |
Other revenues | 2,235 | 2,392 | 7.0 | 23,178 | 24,445 | 5.5 |
|
|
|||||
Total revenues | 25,415 | 26,775 | 5.4 | 223,282 | 238,839 | 7.0 |
Table 3
Expenses
January | April to January | |||||
---|---|---|---|---|---|---|
|
|
|||||
2015 ($ millions) |
2016 ($ millions) |
Change (%) |
2014–15 ($ millions) |
2015–16 ($ millions) |
Change (%) |
|
Major transfers to persons | ||||||
Elderly benefits | 3,696 | 3,865 | 4.6 | 36,232 | 37,706 | 4.1 |
Employment Insurance benefits | 1,673 | 2,127 | 27.1 | 14,565 | 15,980 | 9.7 |
Children's benefits | 1,063 | 1,464 | 37.7 | 10,821 | 14,914 | 37.8 |
|
|
|||||
Total | 6,432 | 7,456 | 15.9 | 61,618 | 68,600 | 11.3 |
Major transfers to other levels of government |
||||||
Support for health and other social programs |
||||||
Canada Health Transfer | 2,676 | 2,836 | 6.0 | 26,762 | 28,354 | 5.9 |
Canada Social Transfer | 1,048 | 1,080 | 3.1 | 10,485 | 10,799 | 3.0 |
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|
|||||
Total | 3,724 | 3,916 | 5.2 | 37,247 | 39,153 | 5.1 |
Fiscal arrangements and other transfers1 | 1,641 | 1,703 | 3.8 | 17,077 | 17,562 | 2.8 |
Canada's cities and communities | 28 | 28 | 0.0 | 1,932 | 1,910 | -1.1 |
Quebec Abatement | -376 | -148 | -60.6 | -3,758 | -3,710 | -1.3 |
|
|
|||||
Total | 5,017 | 5,499 | 9.6 | 52,498 | 54,915 | 4.6 |
Direct program expenses | ||||||
Transfer payments | ||||||
Aboriginal Affairs and Northern Development |
487 | 1,248 | 156.3 | 4,966 | 5,922 | 19.3 |
Agriculture and Agri-Food | 96 | 114 | 18.8 | 764 | 962 | 25.9 |
Employment and Social Development | 785 | 890 | 13.4 | 4,758 | 4,858 | 2.1 |
Foreign Affairs, Trade and Development | 358 | 396 | 10.6 | 1,966 | 2,402 | 22.2 |
Health | 298 | 290 | -2.7 | 2,530 | 2,553 | 0.9 |
Industry | 144 | 169 | 17.4 | 1,815 | 753 | -58.5 |
Other1 | 1,683 | 1,506 | -10.5 | 9,117 | 8,248 | -9.5 |
|
|
|||||
Total | 3,851 | 4,613 | 19.8 | 25,916 | 25,698 | -0.8 |
Other direct program expenses | ||||||
Crown corporations | 627 | 597 | -4.8 | 6,113 | 7,013 | 14.7 |
National Defence | 1,551 | 1,856 | 19.7 | 16,626 | 18,711 | 12.5 |
All other departments and agencies |
3,754 | 3,711 | -1.1 | 36,288 | 37,829 | 4.2 |
|
|
|||||
Total other direct program expenses | 5,932 | 6,164 | 3.9 | 59,027 | 63,553 | 7.7 |
|
|
|||||
Total direct program expenses | 9,783 | 10,777 | 10.2 | 84,943 | 89,251 | 5.1 |
|
|
|||||
Total program expenses | 21,232 | 23,732 | 11.8 | 199,059 | 212,766 | 6.9 |
Public debt charges | 1,972 | 1,973 | 0.1 | 22,914 | 21,805 | -4.8 |
|
|
|||||
Total expenses | 23,204 | 25,705 | 10.8 | 221,973 | 234,571 | 5.7 |
Table 4
The budgetary balance and financial source/requirement
$ millions
January | April to January | |||
---|---|---|---|---|
|
|
|||
2015 | 2016 | 2014–15 | 2015–16 | |
Budgetary balance (deficit/surplus) | 2,211 | 1,070 | 1,309 | 4,268 |
Non-budgetary transactions | ||||
Capital investment activities | -300 | -529 | -2,913 | -3,560 |
Other investing activities | -606 | 208 | 2,474 | -5,939 |
Pension and other accounts | 262 | 564 | 1,746 | 4,041 |
Other activities | ||||
Accounts payable, receivables, accruals and allowances | -1,417 | 1,344 | -2,937 | -4,827 |
Foreign exchange activities | -7,046 | -2,508 | -8,820 | -14,772 |
Amortization of tangible capital assets | 124 | 292 | 3,068 | 3,518 |
|
|
|||
Total other activities | -8,339 | -872 | -8,689 | -16,081 |
|
|
|||
Total non-budgetary transactions | -8,983 | -629 | -7,382 | -21,539 |
|
|
|||
Financial source/requirement | -6,772 | 441 | -6,073 | -17,271 |
Table 5
Financial source/requirement and net financing activities
$ millions
January | April to January | |||
---|---|---|---|---|
|
|
|||
2015 | 2016 | 2014–15 | 2015–16 | |
Financial source/requirement | -6,772 | 441 | -6,073 | -17,271 |
Net increase (+)/decrease (-) in financing activities | ||||
Unmatured debt transactions | ||||
Canadian currency borrowings | ||||
Marketable bonds | 6,754 | 9,111 | 16,003 | 17,198 |
Treasury bills | 2,200 | 500 | -4,300 | 12,100 |
Retail debt | 8 | 55 | -630 | -562 |
|
|
|||
Total | 8,962 | 9,666 | 11,073 | 28,736 |
Foreign currency borrowings | 1,690 | 419 | 166 | 3,835 |
|
|
|||
Total | 10,652 | 10,085 | 11,239 | 32,571 |
Cross-currency swap revaluation | 4,486 | 574 | 5,349 | 6,376 |
Unamortized discounts and premiums on market debt | 255 | 106 | 534 | 722 |
Obligations related to capital leases and other unmatured debt | 14 | -13 | -353 | -203 |
|
|
|||
Net change in financing activities | 15,407 | 10,752 | 16,769 | 39,466 |
Change in cash balance | 8,635 | 11,193 | 10,696 | 22,195 |
Table 6
Condensed statement of assets and liabilities
$ millions
March 31, 2015 |
January 31, 2016 |
Change | |
---|---|---|---|
Liabilities | |||
Accounts payable and accrued liabilities | 123,631 | 122,499 | -1,132 |
Interest-bearing debt | |||
Unmatured debt | |||
Payable in Canadian currency | |||
Marketable bonds | 487,881 | 505,079 | 17,198 |
Treasury bills | 135,692 | 147,792 | 12,100 |
Retail debt | 5,660 | 5,098 | -562 |
|
|||
Subtotal | 629,233 | 657,969 | 28,736 |
Payable in foreign currencies | 20,267 | 24,102 | 3,835 |
Cross-currency swap revaluation | 6,669 | 13,045 | 6,376 |
Unamortized discounts and premiums on market debt | 4,296 | 5,018 | 722 |
Obligations related to capital leases and other unmatured debt | 4,715 | 4,512 | -203 |
|
|||
Total unmatured debt | 665,180 | 704,646 | 39,466 |
Pension and other liabilities | |||
Public sector pensions | 152,664 | 152,102 | -562 |
Other employee and veteran future benefits | 76,140 | 80,879 | 4,739 |
Other liabilities | 6,002 | 5,866 | -136 |
|
|||
Total pension and other liabilities | 234,806 | 238,847 | 4,041 |
|
|||
Total interest-bearing debt | 899,986 | 943,493 | 43,507 |
|
|||
Total liabilities | 1,023,617 | 1,065,992 | 42,375 |
Financial assets | |||
Cash and accounts receivable | 136,696 | 162,586 | 25,890 |
Foreign exchange accounts | 85,018 | 99,790 | 14,772 |
Loans, investments, and advances (net of allowances)1 | 113,681 | 118,118 | 4,437 |
Public sector pension assets | 1,263 | 1,263 | 0 |
|
|||
Total financial assets | 336,658 | 381,757 | 45,099 |
|
|||
Net debt | 686,959 | 684,235 | -2,724 |
Non-financial assets | 74,629 | 74,671 | 42 |
|
|||
Federal debt (accumulated deficit) | 612,330 | 609,564 | -2,766 |
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.
March 2016
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