The Fiscal Monitor: A publication of the Department of Finance

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Highlights

September 2019

There was a budgetary deficit of $0.6 billion in September 2019, compared to a deficit of $1.4 billion in September 2018. Revenues increased by $2.2 billion, or 9.0 per cent, largely reflecting increases in tax revenues and other revenues. Program expenses increased by $1.5 billion, or 6.2 per cent, largely reflecting an increase in direct program expenses. Public debt charges decreased by $28 million, or 1.3 per cent.

Monthly budgetary balance

Monthly budgetary balance

April to September 2019

For the April to September period of the 2019–20 fiscal year, the Government posted a budgetary deficit of $5.8 billion, compared to a surplus of $1.2 billion reported for the same period of 2018–19. Revenues were up $6.1 billion, or 3.9 per cent, largely reflecting increases in personal and corporate income tax revenues. Program expenses were up $12.4 billion, or 8.6 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 $0.7 billion, or 5.7 per cent, largely reflecting higher Consumer Price Index adjustments on Real Return Bonds and a higher average effective interest rate on the stock of Government of Canada treasury bills.

Year-to-date budgetary balance

Year-to-date budgetary balance
1 Sources: Annual Financial Report of the Government of Canada—2018–2019; Budget 2019.

Table 1
Summary statement of transactions
($ millions)
September April - September
 

2018
Restated1
2019 2018–19
Restated1
2019–20
Budgetary transactions        
  Revenues 25,010 27,252 157,957 164,067
  Expenses        
    Program expenses -24,212 -25,704 -144,479 -156,892
    Public debt charges -2,154 -2,126 -12,273 -12,976
  Budgetary balance (deficit/surplus) -1,356 -578 1,205 -5,801
Non-budgetary transactions 2,328 3,040 -10,882 -7,686
Financial source/requirement 972 2,462 -9,677 -13,487
Net change in financing activities -6,025 -11,306 7,729 10,594
Net change in cash balances -5,053 -8,844 -1,948 -2,893
Cash balance at end of period     35,730 37,112
Note: 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

Revenues in September 2019 totalled $27.3 billion, up $2.2 billion, or 9.0 per cent, from September 2018.

For the April to September period of 2019–20, revenues were $164.1 billion, up $6.1 billion, or 3.9 per cent, from the same period the previous year.

Table 2
Revenues
September   April - September  
2018
Restated1
2019 Change 2018–19
Restated1
2019–20 Change
($ millions) (%) ($ millions) (%)
Tax revenues            
  Income taxes            
    Personal 13,752 14,369 4.5 75,890 79,501 4.8
    Corporate 2,876 3,479 21.0 22,988 24,006 4.4
    Non-resident 396 504 27.3 4,114 4,047 -1.6
    Total income tax revenues 17,024 18,352 7.8 102,992 107,554 4.4
  Other taxes and duties            
    Goods and Services Tax 2,536 3,325 31.1 20,413 20,767 1.7
    Energy taxes 545 533 -2.2 2,882 2,875 -0.2
    Customs import duties 719 442 -38.5 3,509 2,809 -19.9
    Other excise taxes and duties 611 623 2.0 3,198 3,445 7.7
    Total other taxes and duties 4,411 4,923 11.6 30,002 29,896 -0.4
  Total tax revenues 21,435 23,275 8.6 132,994 137,450 3.4
Fuel charge proceeds 0 136 n/a 0 572 n/a
Employment Insurance premiums 1,284 1,342 4.5 11,073 11,303 2.1
Other revenues 2,291 2,499 9.1 13,890 14,742 6.1
Total revenues 25,010 27,252 9.0 157,957 164,067 3.9
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.

Expenses

Program expenses in September 2019 were $25.7 billion, up $1.5 billion, or 6.2 per cent, from September 2018.

Public debt charges were down $28 million, or 1.3 per cent.

For the April to September period of 2019–20, program expenses were $156.9 billion, up $12.4 billion, or 8.6 per cent, from the same period the previous year.

Public debt charges increased by $0.7 billion, or 5.7 per cent, largely reflecting higher Consumer Price Index adjustments on Real Return Bonds and a higher average effective interest rate on the stock of Government of Canada treasury bills.

Table 3
Expenses
September   April - September
2018
Restated1
2019 Change 2018–19
Restated1
2019–20 Change
  ($ millions) (%) ($ millions) (%)
Major transfers to persons            
  Elderly benefits 4,436 4,625 4.3 26,329 27,581 4.8
  Employment Insurance benefits 1,660 1,477 -11.0 9,127 9,043 -0.9
  Children’s benefits 1,976 2,057 4.1 11,935 12,094 1.3
  Total 8,072 8,159 1.1 47,391 48,718 2.8
Major transfers to other levels of government            
  Canada Health Transfer 3,215 3,364 4.6 19,292 20,186 4.6
  Canada Social Transfer 1,180 1,215 3.0 7,080 7,293 3.0
  Equalization 1,580 1,653 4.6 9,479 9,922 4.7
  Territorial Formula Financing 257 268 4.3 2,241 2,337 4.3
  Gas Tax Fund 0 0 n/a 1,085 1,084 -0.1
  Home care and mental health 0 0 n/a 31 550 1,674.2
  Other fiscal arrangements2 -427 -474 11.0 -2,546 -951 -62.6
  Total 5,805 6,026 3.8 36,662 40,421 10.3
Direct program expenses            
  Fuel charge proceeds returned 0 14 n/a 0 1,257 n/a
  Other transfer payments 3,386 3,614 6.7 17,725 19,612 10.6
  Other direct program expenses 6,949 7,891 13.6 42,701 46,884 9.8
  Total direct program expenses 10,335 11,519 11.5 60,426 67,753 12.1
Total program expenses 24,212 25,704 6.2 144,479 156,892 8.6
Public debt charges 2,154 2,126 -1.3 12,273 12,976 5.7
Total expenses 26,366 27,830 5.6 156,752 169,868 8.4
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.
2 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; payments to provinces in respect of common securities regulation; transfers under the new Hibernia Dividend Backed Annuity Agreement with Newfoundland and Labrador; and, other items.

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

Table 4
Total expenses by object of expense
  September   April - September  
  2018
Restated1
2019 Change 2018-19
Restated1
2019-20 Change
($ millions) (%) ($ millions) (%)
Transfer payments 17,263 17,813 3.2 101,778 110,008 8.1
Other expenses
  Personnel 4,157 4,887 17.6 26,941 29,752 10.4
  Transportation and communications 222 220 -0.9 1,273 1,252 -1.6
  Information 16 26 62.5 92 137 48.9
  Professional and special services 868 955 10.0 4,376 4,711 7.7
  Rentals 210 228 8.6 1,482 1,533 3.4
  Repair and maintenance 285 317 11.2 1,241 1,358 9.4
  Utilities, materials and supplies 192 212 10.4 1,109 1,169 5.4
  Other subsidies and expenses 578 611 5.7 3,706 4,340 17.1
  Amortization of tangible capital assets 410 427 4.1 2,413 2,562 6.2
  Net loss on disposal of assets 11 8 -27.3 68 70 2.9
  Total other expenses 6,949 7,891 13.6 42,701 46,884 9.8
Total program expenses 24,212 25,704 6.2 144,479 156,892 8.6
Public debt charges 2,154 2,126 -1.3 12,273 12,976 5.7
Total expenses 26,366 27,830 5.6 156,752 169,868 8.4
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.

Revenues and expenses (April to September 2019)

Year-to-date budgetary balance
Note: Totals may not add due to rounding.

Financial requirement of $13.5 billion for April to September 2019

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 $5.8 billion and a requirement of $7.7 billion from non-budgetary transactions, there was a financial requirement of $13.5 billion for the April to September 2019 period, compared to a financial requirement of $9.7 billion for the same period the previous year.

Table 5
The budgetary balance and financial source/requirement
($ millions)
September April - September
2018 2019 2018–19 2019–20
Budgetary balance (deficit/surplus) -1,356 -578 1,205 -5,801
Non-budgetary transactions        
  Accounts payable, accrued liabilities and
   accounts receivable
2,569 3,353 -6,929 -5,721
  Pensions, other future benefits, and other liabilities 648 901 3,797 5,396
  Foreign exchange accounts 1,142 1,112 2,211 185
  Loans, investments and advances -2,023 -2,277 -9,182 -7,355
  Non-financial assets -8 -49 -779 -191
  Total non-budgetary transactions 2,328 3,040 -10,882 -7,686
Financial source/requirement 972 2,462 -9,677 -13,487
Note: Totals may not add due to rounding.

Net financing activities up $10.6 billion

The Government financed this financial requirement of $13.5 billion by decreasing cash balances by $2.9 billion and increasing unmatured debt by $10.6 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 September 2019 stood at $37.1 billion, up $1.4 billion from their level at the end of September 2018. 

Table 6
Financial source/requirement and net financing activities
($ millions)
September April - September
2018 2019 2018–19 2019–20
Financial source/requirement 972 2,462 -9,677 -13,487
Net increase (+)/decrease (-) in financing activities        
  Unmatured debt transactions        
    Canadian currency borrowings        
      Marketable bonds -6,065 -7,204 -6,487 14,065
      Treasury bills 1,500 -2,600 17,800 -100
      Retail debt -80 -14 -241 -115
      Total -4,645 -9,818 11,072 13,850
    Foreign currency borrowings -365 -792 -125 -747
    Total -5,010 -10,610 10,947 13,103
    Cross-currency swap revaluation -760 -518 -2,121 -1,917
    Unamortized discounts and premiums on market debt -202 -163 -872 222
    Obligations related to capital leases and other unmatured debt -53 -15 -225 -814
  Net change in financing activities -6,025 -11,306 7,729 10,594
Change in cash balance -5,053 -8,844 -1,948 -2,893
Cash balance at end of period     35,730 37,112
Note: Totals may not add due to rounding.

Federal debt

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 accumulated deficit increased by $7.0 billion over the April to September 2019 period, reflecting the $5.8-billion budgetary deficit as well as $1.2 billion in other comprehensive losses.

Table 7
Condensed statement of assets and liabilities
($ millions)
  March 31,
2019
September 30,
2019
Change
Liabilities      
  Accounts payable and accrued liabilities 159,707 143,412 -16,295
  Interest-bearing debt      
    Unmatured debt      
      Payable in Canadian currency      
        Marketable bonds 569,526 583,591 14,065
        Treasury bills 134,300 134,200 -100
        Retail debt 1,237 1,122 -115
        Subtotal 705,063 718,913 13,850
      Payable in foreign currencies 16,011 15,264 -747
      Cross-currency swap revaluation 7,274 5,357 -1,917
      Unamortized discounts and premiums on market debt 2,163 2,385 222
      Obligations related to capital leases and other unmatured debt 6,404 5,590 -814
      Total unmatured debt 736,915 747,509 10,594
    Pension and other liabilities        
        Public sector pensions 168,782 167,773 -1,009
        Other employee and veteran future benefits 113,862 120,220 6,358
        Other liabilities 5,905 5,952 47
        Total pension and other liabilities 288,549 293,945 5,396
      Total interest-bearing debt 1,025,464 1,041,454 15,990
    Total liabilities 1,185,171 1,184,866 -305
Financial assets      
    Cash and accounts receivable 177,041 163,574 -13,467
    Foreign exchange accounts 99,688 99,503 -185
    Loans, investments, and advances
     (net of allowances)1
133,912 140,086 6,174
    Public sector pension assets 2,406 2,406 0
    Total financial assets 413,047 405,569 -7,478
Net debt 772,124 779,297 7,173
Non-financial assets 86,674 86,865 191
Federal debt (accumulated deficit) 685,450 692,432 6,982
Note: Totals may not add due to rounding.
1 September 30, 2019 amount includes $1.2 billion in other comprehensive losses from enterprise Crown corporations and other government business enterprises for the April to September 2019 period.

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 Change and Restatement

    The monthly financial results for 2018–19 presented for comparative purposes in The Fiscal Monitor have been restated to reflect the following change in accounting policy.

    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 this restatement of the 2018–19 financial results.
Table 8
Summary of restatement
($ millions)
Other direct program expenses Other revenues
September 2018    
As previously reported 7,173 2,515
Effect of change in accounting policy
  Canadian Commercial Corporation -224 -224
As restated 6,949 2,291
April to September 2018  
As previously reported 43,991 15,180
Effect of change in accounting policy
  Canadian Commercial Corporation -1,290 -1,290
As restated 42,701 13,890
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.

November 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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