The Fiscal Monitor: A publication of the Department of Finance

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There was a budgetary deficit of $1.5 billion in January 2019, compared to a surplus of $0.1 billion in January 2018. Revenues increased by $0.6 billion, or 2.1 per cent, reflecting increases in corporate and non-resident income tax revenues, as well as other revenues. Program expenses increased by $2.6 billion, or 9.7 per cent, largely reflecting an increase in direct program expenses. Public debt charges decreased by $0.3 billion, or 15.3 per cent, reflecting lower Consumer Price Index adjustments on Real Return Bonds.

Monthly budgetary balance

Monthly budgetary balance

For the April to January period of the 2018–19 fiscal year, the Government posted a budgetary deficit of $1.2 billion, compared to a deficit of $8.8 billion reported for the same period of 2017–18. Revenues were up $20.0 billion, or 8.1 per cent, reflecting increases in tax revenues, Employment Insurance (EI) premium revenues and other revenues. Program expenses were up $11.1 billion, or 4.6 per cent, reflecting increases in major transfers to persons, major transfers to other levels of government and direct program expenses. Public debt charges increased by $1.4 billion, or 7.5 per cent, reflecting a higher average effective interest rate on the stock of interest-bearing debt.

Year-to-date budgetary balance

Year-to-date budgetary balance
1 Source: Budget 2019.

Table 1
Summary statement of transactions
($ millions)

January April to January


2018
Restated1
2019 2017–18
Restated1
2018–19
Budgetary transactions
Revenues 28,494 29,096 248,407 268,419
Expenses
Program expenses -26,377 -28,945 -238,992 -250,054
Public debt charges -1,992 -1,687 -18,218 -19,577


Budgetary balance (deficit/surplus) 125 -1,536 -8,803 -1,212
Non-budgetary transactions 6,527 3,045 3,285 -11,373


Financial source/requirement 6,652 1,509 -5,518 -12,585
Net change in financing activities -548 4,413 14,287 21,071


Net change in cash balances 6,104 5,922 8,769 8,486
Cash balance at end of period 45,669 46,162
Notes: Positive numbers indicate net source of funds. Negative numbers indicate net requirement for funds. 1 Certain comparative figures have been restated to reflect a change in accounting policy. See Note 8 at the end of this document for further details.

Revenues in January 2019 totalled $29.1 billion, up $0.6 billion, or 2.1 per cent, from January 2018.

For the April to January period of 2018–19, revenues were $268.4 billion, up $20.0 billion, or 8.1 per cent, from the same period the previous year.

Table 2
Revenues

January April to January


2018
Restated1
2019 Change 2017–18
Restated1
2018–19 Change
($ millions) (%) ($ millions) (%)
Tax revenues
Income taxes
Personal 13,453 13,398 -0.4 122,736 130,205 6.1
Corporate 3,642 3,803 4.4 35,499 39,718 11.9
Non-resident 1,397 1,611 15.3 6,864 8,242 20.1


Total income tax revenues 18,492 18,812 1.7 165,099 178,165 7.9
Other taxes and duties
Goods and Services Tax 4,004 3,460 -13.6 31,905 34,364 7.7
Energy taxes 499 579 16.0 4,841 4,872 0.6
Customs import duties 425 515 21.2 4,573 5,824 27.4
Other excise taxes and duties 514 541 5.3 5,088 5,318 4.5


Total other taxes and duties 5,442 5,095 -6.4 46,407 50,378 8.6


Total tax revenues 23,934 23,907 -0.1 211,506 228,543 8.1
Employment Insurance premiums 2,578 2,580 0.1 15,999 16,604 3.8
Other revenues 1,982 2,609 31.6 20,902 23,272 11.3


Total revenues 28,494 29,096 2.1 248,407 268,419 8.1
Note: Totals may not add due to rounding. 1 Certain comparative figures have been restated to reflect a change in accounting policy. See Note 8 at the end of this document for further details.

Program expenses in January 2019 were $28.9 billion, up $2.6 billion, or 9.7 per cent, from January 2018.

Public debt charges were down $0.3 billion, or 15.3 per cent, reflecting lower Consumer Price Index adjustments on Real Return Bonds.

For the April to January period of 2018–19, program expenses were $250.1 billion, up $11.1 billion, or 4.6 per cent, from the same period the previous year.

Public debt charges increased by $1.4 billion, or 7.5 per cent, reflecting a higher average effective interest rate on the stock of interest-bearing debt.

Table 3
Expenses

January April to January


2018
Restated1
2019 Change 2017–18
Restated1
2018–19 Change
($ millions) (%) ($ millions) (%)
Major transfers to persons
Elderly benefits 4,297 4,527 5.4 42,125 44,329 5.2
Employment Insurance benefits 2,217 2,241 1.1 16,380 15,586 -4.8
Children’s benefits 1,942 1,961 1.0 19,484 19,913 2.2


Total 8,456 8,729 3.2 77,989 79,828 2.4
Major transfers to other levels of government
Canada Health Transfer 3,096 3,215 3.8 30,958 32,153 3.9
Canada Social Transfer 1,146 1,180 3.0 11,457 11,801 3.0
Equalization 1,521 1,580 3.9 15,211 15,772 3.7
Territorial Formula Financing 250 257 2.8 3,181 3,271 2.8
Gas Tax Fund 314 252 -19.7 2,072 1,894 -8.6
Home care and mental health 0 0 100.0 300 490 63.3
Other fiscal arrangements2 -386 -335 -13.2 -4,017 -4,163 3.6


Total 5,941 6,149 3.5 59,162 61,218 3.5
Direct program expenses
Other transfer payments 4,707 5,428 15.3 30,838 34,497 11.9
Other direct program expenses 7,273 8,639 18.8 71,003 74,511 4.9


Total direct program expenses 11,980 14,067 17.4 101,841 109,008 7.0


Total program expenses 26,377 28,945 9.7 238,992 250,054 4.6
Public debt charges 1,992 1,687 -15.3 18,218 19,577 7.5


Total expenses 28,369 30,632 8.0 257,210 269,631 4.8
Note: Totals may not add due to rounding. 1 Certain comparative figures have been restated to reflect a change in accounting policy. See Note 8 at the end of this document for further details. 2Other 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

January April to January


2018 2019 Change 2017-18 2018-19 Change
($ millions) (%) ($ millions) (%)
Transfer payments 19,104 20,306 6.3 167,989 175,543 4.5
Other expenses
Personnel 4,422 4,650 5.2 43,403 45,548 4.9
Transportation and communications 186 197 5.9 2,032 2,202 8.4
Information 36 47 30.6 185 227 22.7
Professional and special services 1,009 1,034 2.5 8,327 8,588 3.1
Rentals 236 300 27.1 2,382 2,530 6.2
Repair and maintenance 253 288 13.8 2,215 2,481 12.0
Utilities, materials and supplies 203 193 -4.9 1,925 2,010 4.4
Other subsidies and expenses 512 1,540 200.8 6,391 6,770 5.9
Amortization of tangible capital assets 404 378 -6.4 4,032 4,045 0.3
Net loss on disposal of assets 12 12 0.0 111 110 -0.9


Total other expenses 7,273 8,639 18.8 71,003 74,511 4.9


Total program expenses 26,377 28,945 9.7 238,992 250,054 4.6
Public debt charges 1,992 1,687 -15.3 18,218 19,577 7.5


Total expenses 28,369 30,632 8.0 257,210 269,631 4.8
Note: Totals may not add due to rounding.

Revenues and expenses (April 2018 to January 2019)

Revenues and expenses (April 2018 to January 2019) - 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 $1.2 billion and a requirement of $11.4 billion from non-budgetary transactions, there was a financial requirement of $12.6 billion for the April 2018 to January 2019 period, compared to a financial requirement of $5.5 billion for the same period the previous year.

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

January April to January


2018
Restated1
2019 2017–18
Restated1
2018–19
Budgetary balance (deficit/surplus) 125 -1,536 -8,803 -1,212
Non-budgetary transactions
Accounts payable, accrued liabilities and
accounts receivable
5,175 5,462 -37 2,464
Pensions, other future benefits, and other liabilities 503 458 5,347 6,399
Foreign exchange accounts 1,505 -1,013 1,838 -7,449
Loans, investments and advances -554 -1,500 -3,144 -10,946
Non-financial assets -102 -362 -719 -1,841


Total non-budgetary transactions 6,527 3,045 3,285 -11,373


Financial source/requirement 6,652 1,509 -5,518 -12,585
Note: Totals may not add due to rounding. 1 Certain comparative figures have been restated to reflect a change in accounting policy. See Note 8 at the end of this document for further details.

The Government financed this financial requirement of $12.6 billion and increased cash balances by $8.5 billion by increasing unmatured debt by $21.1 billion. The increase in unmatured debt was achieved primarily through the issuance of 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 2019 stood at $46.2 billion, up $0.5 billion from their level at the end of January 2018.

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

January April to January


2018 2019 2017–18 2018–19
Financial source/requirement 6,652 1,509 -5,518 -12,585
Net increase (+)/decrease (-) in financing activities
Unmatured debt transactions
Canadian currency borrowings
Marketable bonds 8,898 5,006 43,086 3,120
Treasury bills -7,700 -1,100 -24,100 18,100
Retail debt -133 -34 -1,804 -1,281


Total 1,065 3,872 17,182 19,939
Foreign currency borrowings -546 3,522 1,903 4,003


Total 519 7,394 19,085 23,942
Cross-currency swap revaluation -646 -2,999 -3,173 -1,195
Unamortized discounts and premiums on market debt -409 32 -1,582 -1,325
Obligations related to capital leases and other unmatured debt -12 -14 -43 -351


Net change in financing activities -548 4,413 14,287 21,071
Change in cash balance 6,104 5,922 8,769 8,486
Cash balance at end of period 45,669 46,162
Note: Totals may not add due to rounding.

The federal debt, or accumulated deficit, is the difference between the Government's total liabilities and total assets. The year-over-year change in the accumulated deficit reflects the year-to-date budgetary balance plus other comprehensive income or loss. Other comprehensive income or loss represents certain unrealized gains and losses on financial instruments and certain actuarial gains and losses related to pensions and other employee future benefits reported by enterprise Crown corporations and other government business enterprises.

The federal debt increased by $0.7 billion over the April 2018 to January 2019 period, reflecting the $1.2-billion budgetary deficit, offset in part by $0.5 billion in other comprehensive income.

Table 7
Condensed statement of assets and liabilities
($ millions)

March 31,
2018
Restated2
January 31,
2019
Change
Liabilities
Accounts payable and accrued liabilities 148,733 151,659 2,926
Interest-bearing debt
Unmatured debt
Payable in Canadian currency
Marketable bonds 574,968 578,088 3,120
Treasury bills 110,700 128,800 18,100
Retail debt 2,586 1,305 -1,281

Subtotal 688,254 708,193 19,939
Payable in foreign currencies 16,049 20,052 4,003
Cross-currency swap revaluation 7,835 6,640 -1,195
Unamortized discounts and premiums on market debt 3,467 2,142 -1,325
Obligations related to capital leases and other unmatured debt 5,596 5,245 -351

Total unmatured debt 721,201 742,272 21,071
Pension and other liabilities
Public sector pensions 170,914 169,208 -1,706
Other employee and veteran future benefits 104,793 112,735 7,942
Other liabilities 5,670 5,833 163

Total pension and other liabilities 281,377 287,776 6,399

Total interest-bearing debt 1,002,578 1,030,048 27,470

Total liabilities 1,151,311 1,181,707 30,396
Financial assets
Cash and accounts receivable 172,991 181,939 8,948
Foreign exchange accounts 96,938 104,387 7,449
Loans, investments, and advances (net of allowances)1 126,371 137,861 11,490
Public sector pension assets 2,124 2,124 0

Total financial assets 398,424 426,311 27,887

Net debt 752,887 755,396 2,509
Non-financial assets 81,633 83,474 1,841

Federal debt (accumulated deficit) 671,254 671,922 668
Note: Totals may not add due to rounding. 1 January 31, 2019 amount includes $0.5 billion in other comprehensive income from enterprise Crown corporations and other government business enterprises for the April 2018 to January 2019 period. 2 Certain March 31, 2018 balances have been restated to reflect a change in the Government's accounting for the Canadian Commercial Corporation. This restatement has resulted in a $6,091-million decrease in accounts payable and accrued liabilities, a $215-million decrease in cash and accounts receivable, and a $5,876-million decrease in non-financial assets, with no overall impact on the federal debt. See Note 8 at the end of this document for further details.
  1. The Fiscal Monitor is a report on the consolidated financial results of the Government of Canada, prepared monthly by the Department of Finance Canada. The Government is committed to releasing The Fiscal Monitor on a timely basis in accordance with the International Monetary Fund's Special Data Dissemination Standard Plus, which is 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.
  8. Accounting Changes and Restatement

    The monthly financial results for 2017–18 presented for comparative purposes in The Fiscal Monitor have been restated to reflect the following two changes in accounting policy.

    Change in Discount Rate Methodology

    In finalizing its 2017–18 annual financial results, the Government implemented a change in the discount rate methodology used in valuing unfunded pension obligations. This change resulted in a $0.5-billion increase in the 2017–18 budgetary deficit. Further details regarding this accounting policy change can be found in Note 3 to the condensed consolidated financial statements in the Annual Financial Report of the Government of Canada 2017–2018, available on the Department of Finance Canada website.

    Canadian Commercial Corporation

    For the 2018–19 fiscal year, the Canadian Commercial Corporation has determined that it acts as an agent in its commercial trading transactions. As a result, the revenues and expenses and related asset and liability balances arising from these transactions are no longer consolidated in the Government's financial results. This accounting change has no net impact on the budgetary balance, as the decline in the Government's revenues is offset by an equal reduction in expenses. Similarly, this change has no net impact on the federal debt, as the decrease in the Government's assets is offset by an equal reduction in its liabilities. The March 31, 2018 Condensed Statement of Assets and Liabilities shown in Table 7 and the year-to-date results for the April to December period of 2018–19 have been adjusted to reflect the retroactive impact of this change.

    The following table provides an overview of these restatements on the 2017–18 and 2018–19 financial results.

Table 8
Summary of Restatements
($ millions)

Program expenses Public debt charges Other revenues Budgetary balance (deficit/surplus) Non-budgetary transactions
January 2018 (2017-18)
As previously reported -26,316 -2,183 2,154 167 6,485
Effect of change in accounting policy
Change in discount rate methodology -233 191 -42 42
Canadian Commercial Corporation 172 -172 -

As restated -26,377 -1,992 1,982 125 6,527

April 2017 to January 2018 (2017-18)
As previously reported -238,706 -20,128 22,946 -8,383 2,865
Effect of change in accounting policy
Change in discount rate methodology -2,330 1,910 -420 420
Canadian Commercial Corporation 2,044 -2,044 -

As restated -238,992 -18,218 20,902 -8,803 3,285

April 2018 to December 2018 (2018-19)
As previously reported -222,917 -17,890 22,471 324 -14,419
Effect of change in accounting policy
Canadian Commercial Corporation 1,807 -1,807 -

As restated -221,110 -17,890 20,664 324 -14,419
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.

March 2019

© Her Majesty the Queen in Right of Canada (2019)

All rights reserved

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

Cette publication est également disponible en français.

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

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