The Fiscal Monitor: A publication of the Department of Finance

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Highlights

October 2019

There was a budgetary deficit of $3.3 billion in October 2019, compared to a deficit of $1.1 billion in October 2018. Revenues decreased by $1.2 billion, or 4.6 per cent, reflecting decreases in tax revenues and other revenues. Program expenses increased by $1.0 billion, or 3.9 per cent, largely reflecting increases in major transfers to other levels of government and direct program expenses. Public debt charges decreased by $0.1 billion, or 4.8 per cent, reflecting in part lower monthly Consumer Price Index adjustments on Real Return Bonds.

Monthly budgetary balance

For details, refer to the preceding paragraph.

April to October 2019

For the April to October period of the 2019–20 fiscal year, the Government posted a budgetary deficit of $9.1 billion, compared to a surplus of $0.1 billion reported for the same period of 2018–19. Revenues were up $4.9 billion, or 2.6 per cent, largely reflecting an increase in personal income tax revenues. Program expenses were up $13.4 billion, or 7.9 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 $0.6 billion, or 4.3 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

For details, refer to the preceding paragraph.
1 Source: 2019 Economic and Fiscal Update.


Table 1
Summary statement of transactions
($ millions)
October April - October
2018
Restated1
2019 2018–19
Restated1
2019–20
Budgetary transactions        
  Revenues 26,695 25,465 184,652 189,532
  Expenses        
    Program expenses -25,936 -26,937 -170,415 -183,829
    Public debt charges -1,872 -1,782 -14,145 -14,757
  Budgetary balance (deficit/surplus) -1,113 -3,254 92 -9,054
Non-budgetary transactions -1,703 2,003 -12,585 -5,681
Financial source/requirement -2,816 -1,251 -12,493 -14,735
Net change in financing activities 12,713 14,108 20,441 24,701
Net change in cash balances 9,897 12,857 7,948 9,966
Cash balance at end of period     45,625 49,969
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 October 2019 totalled $25.5 billion, down $1.2 billion, or 4.6 per cent, from October 2018.

For the April to October period of 2019–20, revenues were $189.5 billion, up $4.9 billion, or 2.6 per cent, from the same period the previous year.

Table 2
Revenues
October   April - October  
2018
Restated1
2019 Change 2018–19
Restated1
2019–20 Change
($ millions) (%) ($ millions) (%)
Tax revenues            
  Income taxes            
    Personal 11,751 12,601 7.2 87,642 92,102 5.1
    Corporate 4,024 2,862 -28.9 27,012 26,868 -0.5
    Non-resident 1,276 1,170 -8.3 5,390 5,216 -3.2
    Total income tax revenues 17,051 16,633 -2.5 120,044 124,186 3.5
  Other taxes and duties            
    Goods and Services Tax 4,410 3,860 -12.5 24,823 24,628 -0.8
    Energy taxes 524 506 -3.4 3,406 3,381 -0.7
    Customs import duties 656 413 -37.0 4,165 3,222 -22.6
    Other excise taxes and duties 454 492 8.4 3,652 3,938 7.8
    Total other taxes and duties 6,044 5,271 -12.8 36,046 35,169 -2.4
  Total tax revenues 23,095 21,904 -5.2 156,090 159,355 2.1
Fuel charge proceeds 0 159 n/a 0 731 n/a
Employment Insurance premiums 1,112 1,186 6.7 12,185 12,489 2.5
Other revenues 2,488 2,216 -10.9 16,377 16,957 3.5
Total revenues 26,695 25,465 -4.6 184,652 189,532 2.6
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 October 2019 were $26.9 billion, up $1.0 billion, or 3.9 per cent, from October 2018.

Public debt charges were down $0.1 billion, or 4.8 per cent, reflecting in part lower monthly Consumer Price Index adjustments on Real Return Bonds.

For the April to October period of 2019–20, program expenses were $183.8 billion, up $13.4 billion, or 7.9 per cent, from the same period the previous year.

Public debt charges increased by $0.6 billion, or 4.3 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
October   April - October
2018
Restated1
2019 Change 2018–19
Restated1
2019–20 Change
  ($ millions) (%) ($ millions) (%)
Major transfers to persons            
  Elderly benefits 4,488 4,759 6.0 30,817 32,340 4.9
  Employment Insurance benefits 1,342 1,146 -14.6 10,470 10,189 -2.7
  Children’s benefits 1,983 2,025 2.1 13,918 14,118 1.4
  Total 7,813 7,930 1.5 55,205 56,647 2.6
Major transfers to other levels of government            
  Canada Health Transfer 3,215 3,364 4.6 22,507 23,551 4.6
  Canada Social Transfer 1,180 1,215 3.0 8,260 8,508 3.0
  Equalization 1,580 1,653 4.6 11,059 11,575 4.7
  Territorial Formula Financing 257 268 4.3 2,498 2,606 4.3
  Gas Tax Fund 0 324 n/a 1,085 1,408 29.8
  Home care and mental health 117 0 -100.0 148 550 271.6
  Other fiscal arrangements2 -427 -481 12.6 -2,972 -1,432 -51.8
  Total 5,922 6,343 7.1 42,585 46,766 9.8
Direct program expenses            
  Fuel charge proceeds returned 0 10 n/a 0 1,267 n/a
  Other transfer payments 4,441 3,785 -14.8 22,166 23,397 5.6
  Other direct program expenses 7,760 8,869 14.3 50,459 55,752 10.5
  Total direct program expenses 12,201 12,664 3.8 72,625 80,416 10.7
Total program expenses 25,936 26,937 3.9 170,415 183,829 7.9
Public debt charges 1,872 1,782 -4.8 14,145 14,757 4.3
Total expenses 27,808 28,719 3.3 184,560 198,586 7.6
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
  October   April - October  
  2018
Restated1
2019 Change 2018-19
Restated1
2019-20 Change
($ millions) (%) ($ millions) (%)
Transfer payments 18,176 18,068 -0.6 119,956 128,077 6.8
Other expenses
  Personnel 4,664 5,403 15.8 31,604 35,153 11.2
  Transportation and communications 264 268 1.5 1,537 1,520 -1.1
  Information 34 28 -17.6 126 165 31.0
  Professional and special services 1,049 1,067 1.7 5,425 5,778 6.5
  Rentals 292 317 8.6 1,773 1,850 4.3
  Repair and maintenance 340 302 -11.2 1,581 1,661 5.1
  Utilities, materials and supplies 223 221 -0.9 1,331 1,390 4.4
  Other subsidies and expenses 485 813 67.6 4,191 5,153 23.0
  Amortization of tangible capital assets 398 427 7.3 2,811 2,989 6.3
  Net loss on disposal of assets 11 23 109.1 80 93 16.3
  Total other expenses 7,760 8,869 14.3 50,459 55,752 10.5
Total program expenses 25,936 26,937 3.9 170,415 183,829 7.9
Public debt charges 1,872 1,782 -4.8 14,145 14,757 4.3
Total expenses 27,808 28,719 3.3 184,560 198,586 7.6
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 October 2019)

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

Financial requirement of $14.7 billion for April to October 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 $9.1 billion and a requirement of $5.7 billion from non-budgetary transactions, there was a financial requirement of $14.7 billion for the April to October 2019 period, compared to a financial requirement of $12.5 billion for the same period the previous year.

Table 5
The budgetary balance and financial source/requirement
($ millions)
October April - October
2018 2019 2018–19 2019–20
Budgetary balance (deficit/surplus) -1,113 -3,254 92 -9,054
Non-budgetary transactions        
  Accounts payable, accrued liabilities and
   accounts receivable
1,869 2,704 -5,059 -3,017
  Pensions, other future benefits, and other liabilities 818 844 4,614 6,240
  Foreign exchange accounts -3,703 119 -1,493 305
  Loans, investments and advances -386 -1,387 -9,568 -8,741
  Non-financial assets -301 -277 -1,079 -468
  Total non-budgetary transactions -1,703 2,003 -12,585 -5,681
Financial source/requirement -2,816 -1,251 -12,493 -14,735
Note: Totals may not add due to rounding.

Net financing activities up $24.7 billion

The Government financed this financial requirement of $14.7 billion and increased cash balances by $10.0 billion by increasing unmatured debt by $24.7 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 October 2019 stood at $50.0 billion, up $4.3 billion from their level at the end of October 2018. 

Table 6
Financial source/requirement and net financing activities
($ millions)
October April - October
2018 2019 2018–19 2019–20
Financial source/requirement -2,816 -1,251 -12,493 -14,735
Net increase (+)/decrease (-) in financing activities        
  Unmatured debt transactions        
    Canadian currency borrowings        
      Marketable bonds 6,808 11,150 320 25,214
      Treasury bills 4,500 2,800 22,300 2,700
      Retail debt -35 -11 -276 -126
      Total 11,273 13,939 22,344 27,788
    Foreign currency borrowings 678 -35 553 -782
    Total 11,951 13,904 22,897 27,006
    Cross-currency swap revaluation 948 290 -1,173 -1,627
    Unamortized discounts and premiums on market debt -163 -65 -1,035 157
    Obligations related to capital leases and other unmatured debt -23 -21 -248 -835
  Net change in financing activities 12,713 14,108 20,441 24,701
Change in cash balance 9,897 12,857 7,948 9,966
Cash balance at end of period     45,625 49,969
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 $10.2 billion over the April to October 2019 period, reflecting the $9.1-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
October 31,
2019
Change
Liabilities      
  Accounts payable and accrued liabilities 159,707 146,509 -13,198
  Interest-bearing debt      
    Unmatured debt      
      Payable in Canadian currency      
        Marketable bonds 569,526 594,740 25,214
        Treasury bills 134,300 137,000 2,700
        Retail debt 1,237 1,111 -126
        Subtotal 705,063 732,851 27,788
      Payable in foreign currencies 16,011 15,229 -782
      Cross-currency swap revaluation 7,274 5,647 -1,627
      Unamortized discounts and premiums on market debt 2,163 2,320 157
      Obligations related to capital leases and other unmatured debt 6,404 5,569 -835
      Total unmatured debt 736,915 761,616 24,701
    Pension and other liabilities      
        Public sector pensions 168,782 167,633 -1,149
        Other employee and veteran future benefits 113,862 121,271 7,409
        Other liabilities 5,905 5,885 -20
        Total pension and other liabilities 288,549 294,789 6,240
      Total interest-bearing debt 1,025,464 1,056,405 30,941
    Total liabilities 1,185,171 1,202,914 17,743
Financial assets      
    Cash and accounts receivable 177,041 176,826 -215
    Foreign exchange accounts 99,688 99,383 -305
    Loans, investments, and advances
     (net of allowances)1
133,912 141,470 7,558
    Public sector pension assets 2,406 2,406 0
    Total financial assets 413,047 420,085 7,038
Net debt 772,124 782,829 10,705
Non-financial assets 86,674 87,142 468
Federal debt (accumulated deficit) 685,450 695,687 10,237
Note: Totals may not add due to rounding.
1 October 31, 2019 amount includes $1.2 billion in other comprehensive losses from enterprise Crown corporations and other government business enterprises for the April to October 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
October 2018    
As previously reported 7,932 2,660
Effect of change in accounting policy
  Canadian Commercial Corporation -172 -172
As restated 7,760 2,488
April to October 2018  
As previously reported 51,921 17,839
Effect of change in accounting policy
  Canadian Commercial Corporation -1,462 -1,462
As restated 50,459 16,377
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.

December 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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