Archived - The Fiscal Monitor A publication of the Department of Finance: 2017-07

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July 2017: budgetary deficit of $0.2 billion

There was a budgetary deficit of $0.2 billion in July 2017, compared to a deficit of $1.8 billion in July 2016. Revenues increased by $3.0 billion, or 12.8 per cent, as an increase in tax revenues was partially offset by decreases in Employment Insurance (EI) premium revenues and other revenues. Program expenses increased by $1.6 billion, or 7.0 per cent, primarily reflecting increases in major transfers to persons and direct program expenses. Public debt charges decreased by $0.2 billion, or 9.7 per cent, largely reflecting lower Consumer Price Index adjustments on Real Return Bonds and a lower average effective interest rate on the stock of interest-bearing debt.

April to July 2017: budgetary deficit of $0.1 billion

For the April to July 2017 period of the 2017–18 fiscal year, the Government posted a budgetary deficit of $0.1 billion, compared to a deficit of $2.8 billion reported in the same period of 2016–17. Revenues were up $6.4 billion, or 6.8 per cent, as increases in tax revenues and other revenues were partially offset by a decrease in EI premium revenues. Program expenses were up $4.3 billion, or 4.8 per cent, due to increases in major transfers to persons and other levels of government and direct program expenses. Public debt charges were down $0.5 billion, or 5.6 per cent, largely reflecting a lower average effective interest rate on the stock of interest-bearing debt.

There was a budgetary deficit of $0.2 billion in July 2017, compared to a deficit of $1.8 billion in July 2016.

Revenues increased by $3.0 billion, or 12.8 per cent, to $26.1 billion.

Program expenses in July 2017 were $24.3 billion, up $1.6 billion, or 7.0 per cent, from July 2016.

Public debt charges decreased by $0.2 billion, or 9.7 per cent, largely reflecting lower Consumer Price Index adjustments on Real Return Bonds and a lower average effective interest rate on the stock of interest-bearing debt.

For the April to July 2017 period of the 2017–18 fiscal year, there was a budgetary deficit of $0.1 billion, compared to a deficit of $2.8 billion reported during the same period of 2016–17.

Revenues increased by $6.4 billion, or 6.8 per cent, to $101.3 billion.

For the April to July 2017 period, program expenses were $93.4 billion, up $4.3 billion, or 4.8 per cent, from the same period the previous year.

Public debt charges decreased by $0.5 billion, or 5.6 per cent, largely reflecting a lower average effective interest rate on the stock of interest-bearing debt.

Revenues and expenses (April to July 2017)

Revenues and expenses (April to July 2017) - 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 deficit of $0.1 billion and a requirement of $11.7 billion from non-budgetary transactions, there was a financial requirement of $11.8 billion for the April to July 2017 period, compared to a financial requirement of $17.4 billion for the same period the previous year.

The Government financed this financial requirement of $11.8 billion and increased cash balances by $4.8 billion by increasing unmatured debt by $16.6 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 July 2017 stood at $41.7 billion, down $5.6 billion from their level at the end of July 2016.

Table 1
Summary statement of transactions
$ millions

July April to July


2016 2017 2016–17 2017–18
Budgetary transactions
Revenues 23,105 26,058 94,890 101,328
Expenses
Program expenses -22,716 -24,306 -89,112 -93,374
Public debt charges -2,153 -1,945 -8,537 -8,063


Budgetary balance (deficit/surplus) -1,764 -193 -2,759 -109
Non-budgetary transactions -2,020 4,744 -14,601 -11,717


Financial source/requirement -3,784 4,551 -17,360 -11,826
Net change in financing activities 12,567 -5,322 26,818 16,623


Net change in cash balances 8,783 -771 9,458 4,797
Cash balance at end of period 47,303 41,698
Note: Positive numbers indicate a net source of funds. Negative numbers indicate a net requirement for funds.

Table 2
Revenues

July April to July


2016
($ millions)
2017
($ millions)
Change
(%)
2016–17
($ millions)
2017–18
($ millions)
Change
(%)
Tax revenues
Income taxes
Personal income tax 11,946 12,762 6.8 45,188 47,786 5.7
Corporate income tax 2,143 3,417 59.4 12,621 14,487 14.8
Non-resident income tax 511 850 66.3 1,820 2,461 35.2


Total income tax 14,600 17,029 16.6 59,629 64,734 8.6
Excise taxes and duties
Goods and Services Tax 2,888 3,570 23.6 11,546 13,408 16.1
Energy taxes 395 472 19.5 1,574 1,701 8.1
Customs import duties 470 550 17.0 1,724 1,933 12.1
Other excise taxes and duties 548 506 -7.7 2,008 1,970 -1.9


Total excise taxes and duties 4,301 5,098 18.5 16,852 19,012 12.8


Total tax revenues 18,901 22,127 17.1 76,481 83,746 9.5
Employment Insurance premiums 1,871 1,651 -11.8 8,952 7,937 -11.3
Other revenues 2,333 2,280 -2.3 9,457 9,645 2.0


Total revenues 23,105 26,058 12.8 94,890 101,328 6.8
Note: Totals may not add due to rounding.

Table 3
Expenses

July April to July


2016
($ millions)
2017
($ millions)
Change
(%)
2016–17
($ millions)
2017–18
($ millions)
Change
(%)
Major transfers to persons
Elderly benefits 3,947 4,208 6.6 15,666 16,612 6.0
Employment Insurance benefits 1,470 1,689 14.9 6,469 6,643 2.7
Children's benefits 1,839 1,833 -0.3 6,430 7,728 20.2


Total 7,256 7,730 6.5 28,565 30,983 8.5
Major transfers to other levels
of government
Support for health and other
social programs
Canada Health Transfer 3,006 3,096 3.0 12,023 12,383 3.0
Canada Social Transfer 1,112 1,146 3.1 4,449 4,583 3.0


Total 4,118 4,242 3.0 16,472 16,966 3.0
Fiscal arrangements and other transfers 1,750 1,791 2.3 7,620 7,784 2.2
Canada's cities and communities 1,036 1,036 0.0 1,036 1,036 0.0
Quebec Abatement -381 -397 4.2 -1,526 -1,587 4.0


Total 6,523 6,672 2.3 23,602 24,199 2.5
Direct program expenses
Transfer payments
Agriculture and Agri-Food Canada 65 71 9.2 205 203 -1.0
Employment and Social Development Canada 388 491 26.5 1,781 2,049 15.0
Global Affairs Canada 310 302 -2.6 952 846 -11.1
Health Canada 297 339 14.1 1,282 1,396 8.9
Indigenous and Northern Affairs Canada 601 687 14.3 2,383 2,568 7.8
Innovation, Science and Economic Development Canada 302 238 -21.2 836 1,146 37.1
Other 500 676 35.2 4,240 3,079 -27.4


Total 2,463 2,804 13.8 11,679 11,287 -3.4
Other direct program expenses
Consolidated Crown corporations 740 938 26.8 3,055 3,521 15.3
National Defence 1,990 2,189 10.0 7,164 7,677 7.2
All other departments
and agencies
3,744 3,973 6.1 15,047 15,707 4.4


Total other direct program expenses 6,474 7,100 9.7 25,266 26,905 6.5


Total direct program expenses 8,937 9,904 10.8 36,945 38,192 3.4


Total program expenses 22,716 24,306 7.0 89,112 93,374 4.8
Public debt charges 2,153 1,945 -9.7 8,537 8,063 -5.6


Total expenses 24,869 26,251 5.6 97,649 101,437 3.9
Note: Totals may not add due to rounding.

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

July April to July


2016 2017 2016–17 2017–18
Budgetary balance (deficit/surplus) -1,764 -193 -2,759 -109
Non-budgetary transactions
Capital investment activities -330 329 -761 -406
Other investing activities -845 -514 -2,748 1,102
Pension and other accounts 508 651 1,430 1,186
Other activities
Accounts payable, receivables, accruals and allowances -1,287 1,246 -12,349 -17,673
Foreign exchange activities -351 3,628 -1,386 3,568
Amortization of tangible capital assets 285 -596 1,213 506


Total other activities -1,353 4,278 -12,522 -13,599


Total non-budgetary transactions -2,020 4,744 -14,601 -11,717


Financial source/requirement -3,784 4,551 -17,360 -11,826
Note: Totals may not add due to rounding.

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

July April to July


2016 2017 2016–17 2017–18
Financial source/requirement -3,784 4,551 -17,360 -11,826
Net increase (+)/decrease (-) in financing activities
Unmatured debt transactions
Canadian currency borrowings
Marketable bonds 13,065 7,247 13,234 16,949
Treasury bills -900 -9,200 13,100 4,600
Retail debt 20 -155 89 -230


Total 12,185 -2,108 26,423 21,319
Foreign currency borrowings -631 -788 458 -756


Total 11,554 -2,896 26,881 20,563
Cross-currency swap revaluation 900 -2,390 -499 -3,425
Unamortized discounts and premiums on market debt 126 -220 544 -595
Obligations related to capital leases and other unmatured debt -13 184 -108 80


Net change in financing activities 12,567 -5,322 26,818 16,623
Change in cash balance 8,783 -771 9,458 4,797
Note: Totals may not add due to rounding.

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

For inquiries about this publication, contact Bradley Recker at 613-369-5667.

September 2017

© Her Majesty the Queen in Right of Canada (2017)

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