Archived - The Fiscal Monitor A publication of the Department of Finance: 2016-02

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.

February 2016: budgetary surplus of $3.2 billion

There was a budgetary surplus of $3.2 billion in February 2016, down $1.4 billion from the budgetary surplus reported for February 2015. Revenues increased by $7 million. Program expenses increased by $1.6 billion, or 7.7 per cent, reflecting increases in major transfers to persons and other levels of government and direct program expenses. Public debt charges decreased by $0.1 billion, or 6.8 per cent, largely reflecting a lower average effective interest rate on the stock of interest-bearing debt.

April 2015 to February 2016: budgetary surplus of $7.5 billion

For the April to February period of the 2015–16 fiscal year, the Government posted a budgetary surplus of $7.5 billion, compared to a surplus of $5.9 billion reported for the same period of 2014–15. Revenues were up $15.6 billion, or 6.2 per cent, reflecting increases in all revenue streams. Program expenses were up $15.3 billion, or 7.0 per cent, reflecting increases in major transfers to persons and other levels of government and direct program expenses. Public debt charges were down $1.2 billion, or 5.0 per cent, largely reflecting a lower average effective interest rate on the stock of interest-bearing debt.

There was a budgetary surplus of $3.2 billion in February 2016, down $1.4 billion from the budgetary surplus reported for February 2015.

Revenues in February 2016 totalled $26.6 billion, up $7 million from February 2015.

• Personal income tax revenues were down $0.6 billion, or 5.7 per cent.
• Corporate income tax revenues were up $0.2 billion, or 3.6 per cent.
• Non-resident income tax revenues were down $0.1 billion, or 26.9 per cent.
• Excise taxes and duties were up $0.5 billion, or 14.3 per cent. Goods and Services Tax (GST) revenues increased by $0.4 billion, energy taxes decreased by $6 million, customs import duties increased by $0.1 billion, and other excise taxes and duties increased by $46 million.
• Employment Insurance (EI) premium revenues were up $20 million, or 0.7 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 $46 million, or 2.2 per cent.

Program expenses in February 2016 were $21.8 billion, up $1.6 billion, or 7.7 per cent, from February 2015.

• Major transfers to persons, consisting of elderly, EI and children’s benefits, increased by $0.8 billion, or 11.9 per cent. Elderly benefits increased by $0.1 billion, or 3.7 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 $0.2 billion, or 10.7 per cent. Children’s benefits, which consist of the Canada Child Tax Benefit and the Universal Child Care Benefit (UCCB), increased by $0.4 billion, or 43.0 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 9.4 per cent, reflecting legislated growth in the Canada Health Transfer, the Canada Social Transfer, Equalization transfers and transfers to the territories, as well as a Fiscal Stabilization payment to Alberta.
• 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 $0.3 billion, or 3.5 per cent. Within direct program expenses:
  • Transfer payments decreased by $0.2 billion, or 6.7 per cent.
  • Other direct program expenses increased by $0.5 billion, or 7.8 per cent.

Public debt charges decreased by $0.1 billion, or 6.8 per cent, largely reflecting a lower average effective interest rate on the stock of interest-bearing debt.

For the April to February period of the 2015–16 fiscal year, there was a budgetary surplus of $7.5 billion, compared to a surplus of $5.9 billion reported during the same period of 2014–15.

Revenues increased by $15.6 billion, or 6.2 per cent, to $265.5 billion.

• Personal income tax revenues were up $5.5 billion, or 4.5 per cent.
• Corporate income tax revenues were up $4.6 billion, or 13.8 per cent.
• Non-resident income tax revenues were up $0.2 billion, or 3.0 per cent.
• Excise taxes and duties were up $3.4 billion, or 7.7 per cent. GST revenues increased by $2.3 billion, or 7.9 per cent, energy taxes by $0.1 billion, customs import duties by $0.7 billion, and other excise taxes and duties by $0.2 billion.
• EI premium revenues were up $0.6 billion, or 2.9 per cent, reflecting growth in earnings.
• Other revenues were up $1.3 billion, or 5.2 per cent.

Program expenses increased by $15.3 billion, or 7.0 per cent, to $234.5 billion.

• Major transfers to persons were up $7.8 billion, or 11.4 per cent. Elderly benefits increased by $1.6 billion, or 4.0 per cent, reflecting growth in the elderly population and changes in consumer prices, to which benefits are fully indexed. EI benefit payments increased by $1.6 billion, or 9.8 per cent, and children’s benefits were up $4.5 billion, or 38.3 per cent, largely reflecting increased benefits related to the enhancement and expansion of the UCCB.
• Major transfers to other levels of government were up $2.9 billion, or 5.0 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 $4.6 billion, or 4.9 per cent. Within direct program expenses:
  • Transfer payments decreased by $0.4 billion, or 1.4 per cent.
  • Other direct program expenses increased by $5.0 billion, or 7.7 per cent, due in large part to an increase in Crown corporation expenses and an increase in pension and other future benefit costs based on the Government’s latest actuarial valuations.

Public debt charges decreased by $1.2 billion, or 5.0 per cent, largely reflecting a lower average effective interest rate on the stock of interest-bearing debt.

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 $7.5 billion and a financial requirement of $21.6 billion from non-budgetary transactions, there was a financial requirement of $14.1 billion for the April 2015 to February 2016 period, compared to a financial requirement of $3.8 billion for the same period the previous year.

The Government financed its financial requirement of $14.1 billion and increased cash balances by $14.9 billion by increasing unmatured debt by $29.0 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 February 2016 stood at $42.8 billion, up $14.4 billion from their level at the end of February 2015.

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.

April 2016