The Fiscal Monitor A publication of the Department of Finance: 2018-04

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For the first two months of the 2018-19 fiscal year (April and May), there was a budgetary surplus of $3.2 billion, compared to a surplus of $0.1 billion reported in the same period of 2017-18. By month, there was a surplus of $2.5 billion in April and a surplus of $0.6 billion in May.

Monthly Budgetary Balance

Monthly Budgetary Balance

For the two months combined, revenues were up $4.3 billion, or 8.6 per cent, largely reflecting increases in tax revenues and Employment Insurance (EI) premium revenues which were partially offset by a decrease in other revenues. Program expenses were up $0.7 billion, or 1.6 per cent, reflecting increases in major transfers to persons and other levels of government and direct program expenses. Public debt charges were up $0.5 billion, or 12.4 per cent, largely reflecting higher Consumer Price Index adjustments on Real Return Bonds.

Year-to-Date Budgetary Balance

Year-to-Date Budgetary Balance
1 Source: Budget 2018.

Table 1
Summary statement of transactions
($ millions)

April May April – May



2017 2018 2017 2018 2017–18 2018–19
Budgetary transactions
Revenues 25,156 28,925 25,138 25,717 50,294 54,642
Expenses
Program expenses -23,445 -24,070 -22,699 -22,809 -46,144 -46,879
Public debt charges -2,020 -2,320 -2,062 -2,267 -4,082 -4,587



Budgetary balance (deficit/surplus) -309 2,535 377 641 68 3,176
Non-budgetary transactions -13,601 -4,090 -590 1,153 -14,191 -2,937



Financial source/requirement -13,910 -1,555 -213 1,794 -14,123 239
Net change in financing activities 14,428 9,472 8,396 3,651 22,824 13,123



Net change in cash balances 518 7,917 8,183 5,445 8,701 13,362
Cash balance at end of period 45,602 51,038
Notes: Positive numbers indicate net source of funds. Negative numbers indicate net requirement for funds.

For the April to May period of 2018-19, revenues increased by $4.3 billion, or 8.6 per cent, to $54.6 billion.

Table 2
Revenues

April May April – May



2017 2018 2017 2018 2017–18 2018–19 Change
($ millions) (%)
Tax revenues
Income taxes
Personal 12,698 14,526 10,780 10,784 23,478 25,310 7.8
Corporate 3,016 4,720 4,165 3,669 7,181 8,389 16.8
Non-resident 601 682 512 731 1,113 1,413 27.0



Total income tax revenues 16,315 19,928 15,457 15,184 31,772 35,112 10.5
Other taxes and duties
Goods and Services Tax 3,130 3,115 3,422 4,254 6,552 7,369 12.5
Energy taxes 392 423 475 457 867 880 1.5
Customs import duties 422 414 459 445 881 859 -2.5
Other excise taxes and duties 402 414 528 567 930 981 5.5



Total other taxes and duties 4,346 4,366 4,884 5,723 9,230 10,089 9.3



Total tax revenues 20,661 24,294 20,341 20,907 41,002 45,201 10.2
Employment Insurance premiums 2,240 2,358 2,109 2,214 4,349 4,572 5.1
Other revenues 2,255 2,273 2,688 2,596 4,943 4,869 -1.5



Total revenues 25,156 28,925 25,138 25,717 50,294 54,642 8.6
Note: Totals may not add due to rounding.

For the April to May period of 2018-19, program expenses were $46.9 billion, up $0.7 billion, or 1.6 per cent, from the same period the previous year.

Public debt charges increased by $0.5 billion, or 12.4 per cent, largely reflecting higher Consumer Price Index adjustments on Real Return Bonds.

Table 3
Expenses

April May April – May



2017 2018 2017 2018 2017–18 2018–19 Change
($ millions) (%)
Major transfers to persons
Elderly benefits 4,078 4,281 4,166 4,382 8,244 8,663 5.1
Employment Insurance benefits 2,086 1,923 1,509 1,196 3,595 3,119 -13.2
Children’s benefits 1,946 2,020 1,967 2,057 3,913 4,077 4.2



Total 8,110 8,224 7,642 7,635 15,752 15,859 0.7
Major transfers to other levels of government
Canada Health Transfer 3,096 3,216 3,096 3,215 6,192 6,431 3.9
Canada Social Transfer 1,145 1,180 1,146 1,180 2,291 2,360 3.0
Equalization 1,522 1,580 1,521 1,580 3,043 3,160 3.8
Territorial Formula Financing 589 605 589 606 1,178 1,211 2.8
Gas Tax Fund 0 0 0 0 0 0 n/a
Home care and mental health 0 17 0 0 0 17 n/a
Other fiscal arrangements1 -396 -416 -397 -416 -793 -832 4.9



Total 5,956 6,182 5,955 6,165 11,911 12,347 3.7
Direct program expenses
Other transfer payments 3,267 3,452 2,400 1,952 5,667 5,404 -4.6
Other direct program expenses 6,112 6,212 6,702 7,057 12,814 13,269 3.6



Total direct program expenses 9,379 9,664 9,102 9,009 18,481 18,673 1.0



Total program expenses 23,445 24,070 22,699 22,809 46,144 46,879 1.6
Public debt charges 2,020 2,320 2,062 2,267 4,082 4,587 12.4



Total expenses 25,465 26,390 24,761 25,076 50,226 51,466 2.5
Note: Totals may not add due to rounding.
1 Other fiscal arrangements include the Youth Allowances Recovery and Alternative Payments for Standing Programs, which represent a recovery from Quebec of a tax point transfer; statutory subsidies; payments under the 2005 Offshore Accords; and payments to provinces in respect of common securities regulation.

The following table presents total expenses by main object of expense.

Table 4
Total expenses by object of expense

April May April - May



2017 2018 2017 2018 2017-18 2018-19 Change
($ millions) (%)
Transfer payments 17,333 17,858 15,997 15,752 33,330 33,610 0.8
Other expenses
Personnel 3,639 3,917 3,969 4,366 7,608 8,283 8.9
Transportation and communications 60 66 194 223 254 289 13.8
Information 3 5 13 20 16 25 56.3
Professional and special services 311 228 539 635 850 863 1.5
Rentals 351 311 221 270 572 581 1.6
Repair and maintenance 56 59 130 121 186 180 -3.2
Utilities, materials and supplies 95 115 210 197 305 312 2.3
Other subsidies and expenses 1,189 1,090 994 808 2,183 1,898 -13.1
Amortization of tangible capital assets 401 413 424 409 825 822 -0.4
Net loss on disposal of assets 7 8 8 8 15 16 6.7



Total other expenses 6,112 6,212 6,702 7,057 12,814 13,269 3.6



Total program expenses 23,445 24,070 22,699 22,809 46,144 46,879 1.6
Public debt charges 2,020 2,320 2,062 2,267 4,082 4,587 12.4



Total expenses 25,465 26,390 24,761 25,076 50,226 51,466 2.5
Note: Totals may not add due to rounding.

Revenues and expenses (April 2018 to May 2018)

Revenues and expenses (April 2018 to May 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 surplus of $3.2 billion and a requirement of $2.9 billion from non-budgetary transactions, there was a financial source of $0.2 billion for the April to May 2018 period, compared to a financial requirement of $14.1 billion from the same period the previous year.

Table 5
The budgetary balance and financial source/requirement
($ millions)

April May April – May



2017 2018 2017 2018 2017–18 2018–19
Budgetary balance (deficit/surplus) -309 2,535 377 641 68 3,176
Non-budgetary transactions
Accounts payable, accrued liabilities and accounts receivable -7,094 -5,233 -796 610 -7,890 -4,623
Pensions, other future benefits, and other liabilities -299 362 533 428 234 790
Foreign exchange accounts -5,271 1,239 189 1,219 -5,082 2,458
Loans, investments and advances -1,154 -701 -632 -1,084 -1,786 -1,785
Non-financial assets 217 243 116 -20 333 223



Total non-budgetary transactions -13,601 -4,090 -590 1,153 -14,191 -2,937



Financial source/requirement -13,910 -1,555 -213 1,794 -14,123 239
Note: Totals may not add due to rounding.

The government used this financial source of $0.2 billion and increased its unmatured debt by $13.1 billion to increase its cash balances by $13.4 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 May 2018 stood at $51.0 billion, up $5.4 billion from their level at the end of May 2017.

Table 6
Financial source/requirement and net financing activities
($ millions)

April May April – May



2017 2018 2017 2018 2017–18 2018–19
Financial source/requirement -13,910 -1,555 -213 1,794 -14,123 239
Net increase (+)/decrease (-) in financing activities
Unmatured debt transactions
Canadian currency borrowings
Marketable bonds 5,046 5,725 4,664 -3,775 9,710 1,950
Treasury bills 6,100 5,200 4,300 8,000 10,400 13,200
Retail debt -48 -68 -98 -17 -146 -85



Total 11,098 10,857 8,866 4,208 19,964 15,065
Foreign currency borrowings 640 -159 247 -24 887 -183



Total 11,738 10,698 9,113 4,184 20,851 14,882
Cross-currency swap revaluation 2,790 -988 -657 -225 2,133 -1,213
Unamortized discounts and premiums on market debt -61 -198 -46 -290 -107 -488
Obligations related to capital leases and other unmatured debt -39 -40 -14 -18 -53 -58



Net change in financing activities 14,428 9,472 8,396 3,651 22,824 13,123
Change in cash balance 518 7,917 8,183 5,445 8,701 13,362
Cash balance at end of period 45,602 51,038
Note: Totals may not add due to rounding.
  1. The Fiscal Monitor is a report on the consolidated financial results of the Government of Canada, prepared monthly by the Department of Finance. The Government is committed to releasing the Fiscal Monitor on a timely basis in accordance with the International Monetary Fund's Special Data Dissemination Standards Plus, which are designed to promote member countries' data transparency and promote the development of sound statistical systems.
  2. The financial results reported in the Fiscal Monitor are drawn from the accounts of Canada, which are maintained by the Receiver General and used to prepare the annual Public Accounts of Canada.
  3. The Fiscal Monitor is generally prepared in accordance with the same accounting policies as used to prepare the Government's annual consolidated financial statements, which are summarized in Section 2 of Volume I of the Public Accounts of Canada, available through the Public Services and Procurement Canada website.
  4. The financial results presented in the Fiscal Monitor have not been audited or reviewed by an external auditor.
  5. There can be substantial 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.
  6. The April to March results reported in the Fiscal Monitor are not the final results for the fiscal year as a whole. The final results are published in the annual Public Accounts of Canada and incorporate post-March end-of-year adjustments made once further information becomes available, including the accrual of tax revenues reflecting assessments of tax returns and valuation adjustments for assets and liabilities. Post-March adjustments may also include the accrual of measures announced in the Budget that are recorded upon receipt of Royal Assent of enabling legislation.
  7. Table 7, Condensed Statement of Assets and Liabilities, is included in the monthly Fiscal Monitor following the finalization and publication of the Government's financial results for the preceding fiscal year, typically in the fall.

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.

July 2018

© Her Majesty the Queen in Right of Canada (2018)

All rights reserved

All requests for permission to reproduce this document or any part thereof shall be addressed to the Department of Finance Canada.

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Cat. No.: F12-4E-PDF
ISSN: 1487-0134

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