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

Expenses

Program expenses in July 2019 were $27.1 billion, up $2.2 billion, or 8.9 per cent, from July 2018.

• Major transfers to persons, consisting of elderly, EI and children’s benefits, were up $0.2 billion, or 2.5 per cent. Elderly benefits increased by $0.2 billion, or 4.3 per cent, reflecting growth in the elderly population and changes in consumer prices, to which benefits are fully indexed. EI benefits decreased by $41 million, or 2.5 per cent. Children’s benefits were up $49 million, or 2.6 per cent.
• Major transfers to other levels of government were up $0.3 billion, or 3.7 per cent, largely reflecting legislated growth in the Canada Health Transfer, the Canada Social Transfer and Equalization transfers.  
• Direct program expenses were up $1.7 billion, or 17.6 per cent. Within direct program expenses:
  • Fuel charge proceeds returned reflects $36 million in payments under the federal carbon pollution pricing system.
  • Other transfer payments increased by $0.6 billion, or 20.6 per cent, reflecting increases across a number of departments.
  • Other direct program expenses, consisting of operating expenses of the Government’s departments, agencies, and consolidated Crown corporations and other entities, increased by $1.1 billion, or 15.9 per cent, reflecting in part an increase in personnel costs.

Public debt charges were up $0.4 billion, or 19.1 per cent, largely reflecting higher Consumer Price Index adjustments on Real Return Bonds.  

For the April to July period of 2019–20, program expenses were $104.6 billion, up $9.1 billion, or 9.5 per cent, from the same period the previous year.

• Major transfers to persons were up $0.7 billion, or 2.3 per cent. Elderly benefits increased by $0.8 billion, or 4.8 per cent, reflecting growth in the elderly population and changes in consumer prices. EI benefits decreased by $0.1 billion, or 2.2 per cent. Children’s benefits were up $34 million, or 0.4 per cent.
• Major transfers to other levels of government were up $3.5 billion, or 14.0 per cent, primarily reflecting legislated growth in the Canada Health Transfer, the Canada Social Transfer, Equalization transfers and transfers to the territories; an increase in payments under home care and mental health transfers; and, $1.9 billion in transfers under the new Hibernia Dividend Backed Annuity Agreement reached on April 1, 2019 between Canada and Newfoundland and Labrador.
• Direct program expenses were up $4.9 billion, or 12.5 per cent. Within direct program expenses:
  • Fuel charge proceeds returned totalled $1.2 billion.
  • Other transfer payments increased by $1.3 billion, or 11.8 per cent, reflecting increases across a number of departments.
  • Other direct program expenses increased by $2.3 billion, or 8.3 per cent, reflecting in part an increase in personnel costs.

Public debt charges increased by $1.1 billion, or 13.3 per cent, largely reflecting higher Consumer Price Index adjustments on Real Return Bonds.

Notes

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. A 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 2018–19 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 an $11 million increase in the budgetary surplus as of July 31, 2018. 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
   
   During 2018–19, the Canadian Commercial Corporation 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 decrease 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 following table provides an overview of these restatements of the 2018–19 financial results.