Archived - The Fiscal Monitor A publication of the Department of Finance: 2018-01

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January 2018: budgetary surplus of $0.2 billion

There was a budgetary surplus of $0.2 billion in January 2018, compared to a surplus of $1.2 billion in January 2017. Revenues increased by $2 million, or 0.0 per cent, as increases in revenues from excise taxes and duties and Employment Insurance (EI) premium revenues were largely offset by decreases in income tax revenues and other revenues. Program expenses increased by $0.8 billion, or 2.9 per cent, reflecting increases in major transfers to persons and other levels of government and direct program expenses. Public debt charges increased by $0.3 billion, or 17.6 per cent, largely reflecting higher Consumer Price Index adjustments on Real Return Bonds.

April 2017 to January 2018: budgetary deficit of $8.4 billion

For the April 2017 to January 2018 period of the 2017–18 fiscal year, the Government posted a budgetary deficit of $8.4 billion, compared to a deficit of $12.8 billion reported for the same period of 2016–17. Revenues were up $11.6 billion, or 4.9 per cent, reflecting increases in tax revenues and other revenues, partially offset by a decrease in EI premium revenues. Program expenses were up $7.4 billion, or 3.2 per cent, reflecting increases in major transfers to persons and other levels of government and direct program expenses. Public debt charges were down $0.2 billion, or 0.9 per cent, largely due to a lower average effective interest rate on the stock of interest-bearing debt.

There was a budgetary surplus of $0.2 billion in January 2018, compared to a surplus of $1.2 billion in January 2017.

Revenues in January 2018 totalled $28.7 billion, up $2 million, or 0.0 per cent, from January 2017.

Program expenses in January 2018 were $26.3 billion, up $0.8 billion, or 2.9 per cent, from January 2017.

Public debt charges increased by $0.3 billion, or 17.6 per cent, largely reflecting higher Consumer Price Index adjustments on Real Return Bonds.

For the April 2017 to January 2018 period of the 2017–18 fiscal year, there was a budgetary deficit of $8.4 billion, compared to a deficit of $12.8 billion reported during the same period of 2016–17.

Revenues increased by $11.6 billion, or 4.9 per cent, to $250.5 billion.

For the April 2017 to January 2018 period, program expenses were $238.7 billion, up $7.4 billion, or 3.2 per cent, from the same period the previous year.

Public debt charges were down $0.2 billion, or 0.9 per cent, largely due to a lower average effective interest rate on the stock of interest-bearing debt.

Revenues and expenses (April 2017 to January 2018)

Revenues and expenses (April 2017 to January 2018) - 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 $8.4 billion and a financial source of $2.9 billion from non-budgetary transactions, there was a financial requirement of $5.5 billion for the April 2017 to January 2018 period, compared to a financial requirement of $19.4 billion for the same period the previous year.

The Government financed its financial requirement of $5.5 billion and increased cash balances by $8.8 billion by increasing unmatured debt by $14.3 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 January 2018 stood at $45.7 billion, up $0.1 billion from their level at the end of January 2017.

Table 1
Summary statement of transactions
$ millions

January April to January


2017 2018 2016–17 2017–18
Budgetary transactions
Revenues 28,664 28,666 238,845 250,451
Expenses
Program expenses -25,564 -26,316 -231,289 -238,706
Public debt charges -1,857 -2,183 -20,307 -20,128


Budgetary balance (deficit/surplus) 1,243 167 -12,751 -8,383
Non-budgetary transactions 5,371 6,485 -6,658 2,865


Financial source/requirement 6,614 6,652 -19,409 -5,518
Net change in financing activities 282 -548 27,153 14,287


Net change in cash balances 6,896 6,104 7,744 8,769
Cash balance at end of period 45,590 45,669
Note: Positive numbers indicate a net source of funds. Negative numbers indicate a net requirement for funds.

Table 2
Revenues

January April to January


2017
($ millions)
2018
($ millions)
Change
(%)
2016–17
($ millions)
2017–18
($ millions)
Change
(%)
Tax revenues
Income taxes
Personal income tax 13,741 13,453 -2.1 116,074 122,736 5.7
Corporate income tax 3,608 3,642 0.9 32,634 35,499 8.8
Non-resident income tax 1,273 1,397 9.7 5,900 6,864 16.3


Total income tax 18,622 18,492 -0.7 154,608 165,099 6.8
Excise taxes and duties
Goods and Services Tax 3,789 4,004 5.7 29,756 31,905 7.2
Energy taxes 481 499 3.7 4,697 4,841 3.1
Customs import duties 453 425 -6.2 4,518 4,573 1.2
Other excise taxes and duties 415 514 23.9 4,962 5,088 2.5


Total excise taxes and duties 5,138 5,442 5.9 43,933 46,407 5.6


Total tax revenues 23,760 23,934 0.7 198,541 211,506 6.5
Employment Insurance premiums 2,439 2,578 5.7 17,683 15,999 -9.5
Other revenues 2,465 2,154 -12.6 22,621 22,946 1.4


Total revenues 28,664 28,666 0.0 238,845 250,451 4.9
Note: Totals may not add due to rounding.

Table 3
Expenses

January April to January


2017
($ millions)
2018
($ millions)
Change
(%)
2016–17
($ millions)
2017–18
($ millions)
Change
(%)
Major transfers to persons
Elderly benefits 4,077 4,297 5.4 39,924 42,125 5.5
Employment Insurance benefits 2,347 2,217 -5.5 17,111 16,380 -4.3
Children's benefits 1,925 1,941 0.8 18,128 19,485 7.5


Total 8,349 8,455 1.3 75,163 77,990 3.8
Major transfers to other levels
of government
Support for health and other
social programs
Canada Health Transfer 3,006 3,096 3.0 30,056 30,958 3.0
Canada Social Transfer 1,112 1,146 3.1 11,123 11,457 3.0
Home care and mental health n/a 0 n/a n/a 300 n/a


Total 4,118 4,242 3.0 41,179 42,715 3.7
Fiscal arrangements and other transfers 1,750 1,791 2.3 18,090 18,434 1.9
Canada's cities and communities 298 314 5.4 2,064 2,072 0.4
Quebec Abatement -398 -406 2.0 -3,979 -4,059 2.0


Total 5,768 5,941 3.0 57,354 59,162 3.2
Direct program expenses
Transfer payments
Agriculture and Agri-Food Canada 131 36 -72.5 1,047 756 -27.8
Employment and Social Development Canada 1,248 1,229 -1.5 5,900 6,365 7.9
Global Affairs Canada 595 682 14.6 2,832 3,047 7.6
Health Canada 345 332 -3.8 2,714 2,946 8.5
Indigenous and Northern Affairs Canada 892 886 -0.7 6,911 6,732 -2.6
Innovation, Science and Economic Development Canada 221 299 35.3 2,597 3,118 20.1
Other 1,255 1,243 -1.0 9,111 7,874 -13.6


Total 4,687 4,707 0.4 31,112 30,838 -0.9
Other direct program expenses
Consolidated Crown corporations 706 416 -41.1 7,699 7,979 3.6
National Defence 1,940 2,458 26.7 19,808 21,586 9.0
All other departments
and agencies
4,114 4,339 5.5 40,153 41,151 2.5


Total other direct program expenses 6,760 7,213 6.7 67,660 70,716 4.5


Total direct program expenses 11,447 11,920 4.1 98,772 101,554 2.8


Total program expenses 25,564 26,316 2.9 231,289 238,706 3.2
Public debt charges 1,857 2,183 17.6 20,307 20,128 -0.9


Total expenses 27,421 28,499 3.9 251,596 258,834 2.9
Note: Totals may not add due to rounding.

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

January April to January


2017 2018 2016–17 2017–18
Budgetary balance (deficit/surplus) 1,243 167 -12,751 -8,383
Non-budgetary transactions
Capital investment activities -274 251 -3,500 -2,048
Other investing activities -404 -554 -7,544 -3,144
Pension and other accounts 760 461 6,479 4,927
Other activities
Accounts payable, receivables, accruals and allowances 4,943 5,175 1,146 -37
Foreign exchange activities 236 1,505 -6,260 1,838
Amortization of tangible capital assets 110 -353 3,021 1,329


Total other activities 5,289 6,327 -2,093 3,130


Total non-budgetary transactions 5,371 6,485 -6,658 2,865


Financial source/requirement 6,614 6,652 -19,409 -5,518
Note: Totals may not add due to rounding.

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

January April to January


2017 2018 2016–17 2017–18
Financial source/requirement 6,614 6,652 -19,409 -5,518
Net increase (+)/decrease (-) in financing activities
Unmatured debt transactions
Canadian currency borrowings
Marketable bonds 7,223 8,898 33,740 43,085
Treasury bills -3,900 -7,700 -4,900 -24,100
Retail debt -743 -133 -494 -1,804


Total 2,580 1,065 28,346 17,181
Foreign currency borrowings -87 -546 530 1,903


Total 2,493 519 28,876 19,084
Cross-currency swap revaluation -1,995 -646 -2,036 -3,173
Unamortized discounts and premiums on market debt -191 -409 592 -1,582
Obligations related to capital leases and other unmatured debt -25 -12 -279 -42


Net change in financing activities 282 -548 27,153 14,287
Change in cash balance 6,896 6,104 7,744 8,769
Note: Totals may not add due to rounding.

Table 6
Condensed statement of assets and liabilities
$ millions

March 31,
2017
January 31,
2018
Change
Liabilities
Accounts payable and accrued liabilities 132,519 150,235 17,716
Interest-bearing debt
Unmatured debt
Payable in Canadian currency
Marketable bonds 536,280 579,365 43,085
Treasury bills 136,700 112,600 -24,100
Retail debt 4,533 2,729 -1,804

Subtotal 677,513 694,694 17,181
Payable in foreign currencies 17,609 19,512 1,903
Cross-currency swap revaluation 7,764 4,591 -3,173
Unamortized discounts and premiums on market debt 5,322 3,740 -1,582
Obligations related to capital leases and other unmatured debt 5,425 5,383 -42

Total unmatured debt 713,633 727,920 14,287
Pension and other liabilities
Public sector pensions 151,806 151,180 -626
Other employee and veteran future benefits 93,568 99,194 5,626
Other liabilities 5,689 5,616 -73

Total pension and other liabilities 251,063 255,990 4,927

Total interest-bearing debt 964,696 983,910 19,214

Total liabilities 1,097,215 1,134,145 36,930
Financial assets
Cash and accounts receivable 158,055 184,577 26,522
Foreign exchange accounts 98,797 96,959 -1,838
Loans, investments, and advances (net of allowances)1 124,006 126,966 2,960
Public sector pension assets 1,900 1,900 0

Total financial assets 382,758 410,402 27,644

Net debt 714,457 723,743 9,286
Non-financial assets 82,558 83,277 719

Federal debt (accumulated deficit) 631,899 640,466 8,567
Note: Totals may not add due to rounding. 1 January 31, 2018 amount includes $0.2 billion in other comprehensive losses from enterprise Crown corporations and other government business enterprises for the April 2017 to January 2018 period.

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.

March 2018

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