Archived - The Fiscal Monitor - February 2020
Download PDF (PDF, 1,380 KB)
Highlights
February 2020
There was a budgetary surplus of $3.6 billion in February 2020, compared to a surplus of $4.3 billion in February 2019. Revenues increased by $0.1 billion, or 0.4%. Program expenses increased by $0.9 billion, or 3.3%, primarily reflecting increases in major transfers to persons and direct program expenses. Public debt charges decreased by $7 million, or 0.4%.
Monthly budgetary balance
April 2019 to February 2020
For the April to February period of the 2019–20 fiscal year, the government posted a budgetary deficit of $7.0 billion, compared to a surplus of $3.1 billion reported for the same period of 2018–19.
Revenues were up $8.0 billion, or 2.7%, largely reflecting an increase in personal income tax revenues. Program expenses were up $17.5 billion, or 6.3%, 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 2.9%, 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
| February | April to February | |||
|---|---|---|---|---|
| 2019 | 2020 | 2018–19 | 2019–20 | |
| Budgetary transactions | ||||
| Revenues | 32,040 | 32,159 | 300,459 | 308,470 |
| Expenses | ||||
| Program expenses | -25,904 | -26,759 | -275,958 | -293,426 |
| Public debt charges | -1,830 | -1,823 | -21,407 | -22,022 |
| Budgetary balance (deficit/surplus) | 4,306 | 3,577 | 3,094 | -6,978 |
| Non-budgetary transactions | -2,446 | -7,280 | -13,819 | -13,186 |
| Financial source/requirement | 1,860 | -3,703 | -10,725 | -20,164 |
| Net change in financing activities | -8,739 | 9,487 | 12,332 | 27,125 |
| Net change in cash balances | -6,879 | 5,784 | 1,607 | 6,961 |
| Cash balance at end of period | 39,284 | 46,965 | ||
| Note: Positive numbers indicate net source of funds. Negative numbers indicate net requirement for funds. | ||||
Revenues
Revenues in February 2020 totalled $32.2 billion, up $0.1 billion, or 0.4%, from February 2019.
- Tax revenues decreased by $0.4 billion, or 1.4%.
- Fuel charge proceeds assessed under the federal carbon pollution pricing system totalled $0.4 billion.
- Employment Insurance (EI) premium revenues increased by $47 million, or 1.8%.
- Other revenues, consisting of net profits from enterprise Crown corporations, revenues of consolidated Crown corporations, revenues from sales of goods and services, returns on investments, net foreign exchange revenues and miscellaneous revenues, were up $22 million, or 0.9%.
For the April to February period of 2019–20, revenues were $308.5 billion, up $8.0 billion, or 2.7%, from the same period the previous year.
- Tax revenues increased by $4.5 billion, or 1.7%, driven largely by growth in personal income tax revenues. The increase in tax revenues for the April to February period includes $31 million from the federal portion of assessed cannabis excise duties.
- Assessed fuel charge proceeds totalled $1.7 billion over the period.
- EI premium revenues were up $0.6 billion, or 2.9%.
- Other revenues were up $1.3 billion, or 4.9%.
| February | April to February | |||||
|---|---|---|---|---|---|---|
| 2019 | 2020 | Change | 2018–19 | 2019–20 | Change | |
| ($ millions) | (%) | ($ millions) | (%) | |||
| Tax revenues | ||||||
| Income taxes | ||||||
| Personal | 13,022 | 15,202 | 16.7 | 143,227 | 152,151 | 6.2 |
| Corporate | 9,179 | 7,200 | -21.6 | 48,897 | 46,534 | -4.8 |
| Non-resident | 925 | 692 | -25.2 | 9,168 | 9,187 | 0.2 |
| Total income tax revenues | 23,126 | 23,094 | -0.1 | 201,292 | 207,872 | 3.3 |
| Other taxes and duties | ||||||
| Goods and Services Tax | 2,511 | 2,301 | -8.4 | 36,875 | 36,487 | -1.1 |
| Energy taxes | 453 | 466 | 2.9 | 5,325 | 5,302 | -0.4 |
| Customs import duties | 494 | 293 | -40.7 | 6,319 | 4,597 | -27.3 |
| Other excise taxes and duties | 395 | 445 | 12.7 | 5,712 | 5,734 | 0.4 |
| Total other taxes and duties | 3,853 | 3,505 | -9.0 | 54,231 | 52,120 | -3.9 |
| Total tax revenues | 26,979 | 26,599 | -1.4 | 255,523 | 259,992 | 1.7 |
| Fuel charge proceeds | 0 | 430 | n/a | 0 | 1,702 | n/a |
| Employment Insurance premiums | 2,573 | 2,620 | 1.8 | 19,176 | 19,741 | 2.9 |
| Other revenues | 2,488 | 2,510 | 0.9 | 25,760 | 27,035 | 4.9 |
| Total revenues | 32,040 | 32,159 | 0.4 | 300,459 | 308,470 | 2.7 |
| Note: Totals may not add due to rounding. | ||||||
Expenses
Program expenses in February 2020 were $26.8 billion, up $0.9 billion, or 3.3%, from February 2019.
- Major transfers to persons, consisting of elderly, EI and children’s benefits, were up $0.6 billion, or 7.6%. EI benefits increased by $0.3 billion, or 19.7%, reflecting a change in the timing of payments to provinces and territories under the Labour Market Development Agreements, which fund skills training and employment assistance. Elderly benefits increased by $0.2 billion, or 5.5%, reflecting growth in the elderly population and changes in consumer prices, to which benefits are fully indexed. Children’s benefits were up $45 million, or 2.3%.
- Major transfers to other levels of government were down $0.1 billion, or 0.9%, as legislated growth in the Canada Health Transfer, the Canada Social Transfer, Equalization transfers and transfers to the territories was more than offset by a decrease in Gas Tax Fund transfers due to year-over-year timing differences and an increase in recoveries under the Quebec Abatement.
- Direct program expenses were up $0.3 billion, or 2.4%. Within direct program expenses:
- Fuel charge proceeds returned reflected $0.3 billion in payments under the federal carbon pollution pricing system.
- Other transfer payments decreased by $0.2 billion, or 5.1%.
- Other direct program expenses, consisting of operating expenses of the government’s departments, agencies, and consolidated Crown corporations and other entities, increased by $0.2 billion, or 3.0%.
Public debt charges were down $7 million, or 0.4%.
For the April to February period of 2019–20, program expenses were $293.4 billion, up $17.5 billion, or 6.3%, from the same period the previous year.
- Major transfers to persons were up $3.5 billion, or 4.0%. Elderly benefits increased by $2.5 billion, or 5.1%, reflecting growth in the elderly population and changes in consumer prices. EI benefits increased by $0.6 billion, or 3.7%. Children’s benefits were up $0.4 billion, or 1.6%.
- Major transfers to other levels of government were up $4.8 billion, or 7.2%, 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 $9.1 billion, or 7.6%. Within direct program expenses:
- Fuel charge proceeds returned totalled $1.5 billion.
- Other transfer payments increased by $1.7 billion, or 4.3%, reflecting increases across a number of departments.
- Other direct program expenses increased by $5.9 billion, or 7.2%, due in large part to an increase in personnel costs.
Public debt charges increased by $0.6 billion, or 2.9%, largely reflecting higher Consumer Price Index adjustments on Real Return Bonds and a higher average effective interest rate on the stock of Government of Canada treasury bills.
| February | April to February | |||||
|---|---|---|---|---|---|---|
| 2019 | 2020 | Change | 2018–19 | 2019–20 | Change | |
| ($ millions) | (%) | ($ millions) | (%) | |||
| Major transfers to persons | ||||||
| Elderly benefits | 4,538 | 4,786 | 5.5 | 48,867 | 51,372 | 5.1 |
| Employment Insurance benefits | 1,688 | 2,020 | 19.7 | 17,274 | 17,910 | 3.7 |
| Children's benefits | 1,989 | 2,034 | 2.3 | 21,902 | 22,259 | 1.6 |
| Total | 8,215 | 8,840 | 7.6 | 88,043 | 91,541 | 4.0 |
| Major transfers to other levels of government | ||||||
| Canada Health Transfer | 3,215 | 3,364 | 4.6 | 35,368 | 37,008 | 4.6 |
| Canada Social Transfer | 1,180 | 1,215 | 3.0 | 12,981 | 13,370 | 3.0 |
| Equalization | 1,580 | 1,653 | 4.6 | 17,352 | 18,195 | 4.9 |
| Territorial Formula Financing | 257 | 268 | 4.3 | 3,528 | 3,680 | 4.3 |
| Gas Tax Fund | 267 | 28 | -89.5 | 2,161 | 2,162 | 0.0 |
| Home care and mental health | 0 | 1 | n/a | 490 | 1,080 | 120.4 |
| Other fiscal arrangements1 | -421 | -504 | 19.7 | -4,584 | -3,356 | -26.8 |
| Total | 6,078 | 6,025 | -0.9 | 67,296 | 72,139 | 7.2 |
| Direct program expenses | ||||||
| Fuel charge proceeds returned | 0 | 252 | n/a | 0 | 1,536 | n/a |
| Other transfer payments | 3,941 | 3,740 | -5.1 | 38,438 | 40,107 | 4.3 |
| Other direct program expenses | 7,670 | 7,902 | 3.0 | 82,181 | 88,103 | 7.2 |
| Total direct program expenses | 11,611 | 11,894 | 2.4 | 120,619 | 129,746 | 7.6 |
| Total program expenses | 25,904 | 26,759 | 3.3 | 275,958 | 293,426 | 6.3 |
| Public debt charges | 1,830 | 1,823 | -0.4 | 21,407 | 22,022 | 2.9 |
| Total expenses | 27,734 | 28,582 | 3.1 | 297,365 | 315,448 | 6.1 |
| 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; 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.
| February | April to February | |||||
|---|---|---|---|---|---|---|
| 2019 | 2020 | Change | 2018-19 | 2019-20 | Change | |
| ($ millions) | (%) | ($ millions) | (%) | |||
| Transfer payments | 18,234 | 18,857 | 3.4 | 193,777 | 205,323 | 6.0 |
| Other expenses | ||||||
| Personnel | 4,558 | 5,021 | 10.2 | 50,109 | 55,813 | 11.4 |
| Transportation and communications | 196 | 243 | 24.0 | 2,398 | 2,420 | 0.9 |
| Information | 32 | 33 | 3.1 | 259 | 281 | 8.5 |
| Professional and special services | 1,019 | 1,039 | 2.0 | 9,606 | 9,951 | 3.6 |
| Rentals | 239 | 234 | -2.1 | 2,769 | 2,875 | 3.8 |
| Repair and maintenance | 287 | 292 | 1.7 | 2,768 | 2,793 | 0.9 |
| Utilities, materials and supplies | 252 | 273 | 8.3 | 2,261 | 2,348 | 3.8 |
| Other subsidies and expenses | 644 | 300 | -53.4 | 7,414 | 6,766 | -8.7 |
| Amortization of tangible capital assets | 422 | 461 | 9.2 | 4,466 | 4,730 | 5.9 |
| Net loss on disposal of assets | 21 | 6 | -71.4 | 131 | 126 | -3.8 |
| Total other expenses | 7,670 | 7,902 | 3.0 | 82,181 | 88,103 | 7.2 |
| Total program expenses | 25,904 | 26,759 | 3.3 | 275,958 | 293,426 | 6.3 |
| Public debt charges | 1,830 | 1,823 | -0.4 | 21,407 | 22,022 | 2.9 |
| Total expenses | 27,734 | 28,582 | 3.1 | 297,365 | 315,448 | 6.1 |
| Note: Totals may not add due to rounding. | ||||||
Revenues and expenses (April 2019 to February 2020)
Financial requirement of $20.2 billion for April 2019 to February 2020
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 $7.0 billion and a requirement of $13.2 billion from non-budgetary transactions, there was a financial requirement of $20.2 billion for the April 2019 to February 2020 period, compared to a financial requirement of $10.7 billion for the same period the previous year.
| February | April to February | |||
|---|---|---|---|---|
| 2019 | 2020 | 2018–19 | 2019–20 | |
| Budgetary balance (deficit/surplus) | 4,306 | 3,577 | 3,094 | -6,978 |
| Non-budgetary transactions | ||||
| Accounts payable, accrued liabilities and accounts receivable |
-6,288 | -6,120 | -3,825 | -7,788 |
| Pensions, other future benefits, and other liabilities | 548 | 1,091 | 6,947 | 10,015 |
| Foreign exchange accounts | 4,200 | -1,848 | -3,249 | -2,984 |
| Loans, investments and advances | -823 | -290 | -11,769 | -10,500 |
| Non-financial assets | -83 | -113 | -1,923 | -1,929 |
| Total non-budgetary transactions | -2,446 | -7,280 | -13,819 | -13,186 |
| Financial source/requirement | 1,860 | -3,703 | -10,725 | -20,164 |
| Note: Totals may not add due to rounding. | ||||
Net financing activities up $27.1 billion
The government financed this financial requirement of $20.2 billion and increased cash balances by $7.0 billion by increasing unmatured debt by $27.1 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 February 2020 stood at $47.0 billion, up $7.7 billion from their level at the end of February 2019.
| February | April to February | |||
|---|---|---|---|---|
| 2019 | 2020 | 2018–19 | 2019–20 | |
| Financial source/requirement | 1,860 | -3,703 | -10,725 | -20,164 |
| Net increase (+)/decrease (-) in financing activities | ||||
| Unmatured debt transactions | ||||
| Canadian currency borrowings | ||||
| Marketable bonds | -5,583 | 5,838 | -2,463 | 35,568 |
| Treasury bills | 1,000 | 2,300 | 19,100 | -7,200 |
| Retail debt | -22 | -17 | -1,303 | -722 |
| Total | -4,605 | 8,121 | 15,334 | 27,646 |
| Foreign currency borrowings | -4,077 | 422 | -74 | 333 |
| Total | -8,682 | 8,543 | 15,260 | 27,979 |
| Cross-currency swap revaluation | -62 | 908 | -1,257 | -337 |
| Unamortized discounts and premiums on market debt | 37 | 30 | -1,288 | 358 |
| Obligations related to capital leases and other unmatured debt | -32 | 6 | -383 | -875 |
| Net change in financing activities | -8,739 | 9,487 | 12,332 | 27,125 |
| Change in cash balance | -6,879 | 5,784 | 1,607 | 6,961 |
| Cash balance at end of period | 39,284 | 46,965 | ||
| 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 $6.3 billion over the April 2019 to February 2020 period, reflecting the $7.0 billion budgetary deficit, offset in part by $0.7 billion in other comprehensive income.
| March 31, 2019 |
February 29, 2020 |
Change | |
|---|---|---|---|
| Liabilities | |||
| Accounts payable and accrued liabilities | 159,707 | 160,093 | 386 |
| Interest-bearing debt | |||
| Unmatured debt | |||
| Payable in Canadian currency | |||
| Marketable bonds | 569,526 | 605,094 | 35,568 |
| Treasury bills | 134,300 | 127,100 | -7,200 |
| Retail debt | 1,237 | 515 | -722 |
| Subtotal | 705,063 | 732,709 | 27,646 |
| Payable in foreign currencies | 16,011 | 16,344 | 333 |
| Cross-currency swap revaluation | 7,274 | 6,937 | -337 |
| Unamortized discounts and premiums on market debt | 2,163 | 2,521 | 358 |
| Obligations related to capital leases and other unmatured debt | 6,404 | 5,529 | -875 |
| Total unmatured debt | 736,915 | 764,040 | 27,125 |
| Pension and other liabilities | |||
| Public sector pensions | 168,782 | 166,967 | -1,815 |
| Other employee and veteran future benefits | 113,862 | 125,491 | 11,629 |
| Other liabilities | 5,905 | 6,106 | 201 |
| Total pension and other liabilities | 288,549 | 298,564 | 10,015 |
| Total interest-bearing debt | 1,025,464 | 1,062,604 | 37,140 |
| Total liabilities | 1,185,171 | 1,222,697 | 37,526 |
| Financial assets | |||
| Cash and accounts receivable | 177,041 | 192,176 | 15,135 |
| Foreign exchange accounts | 99,688 | 102,672 | 2,984 |
| Loans, investments, and advances (net of allowances)1 |
133,912 | 145,130 | 11,218 |
| Public sector pension assets | 2,406 | 2,406 | 0 |
| Total financial assets | 413,047 | 442,384 | 29,337 |
| Net debt | 772,124 | 780,313 | 8,189 |
| Non-financial assets | 86,674 | 88,603 | 1,929 |
| Federal debt (accumulated deficit) | 685,450 | 691,710 | 6,260 |
| Note: Totals may not add due to rounding.
1 February 29, 2020 amount includes $0.7 billion in other comprehensive income from enterprise Crown corporations and other government business enterprises for the April 2019 to February 2020 period. |
|||
Notes
- 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.
- 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.
- 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.
- The financial results presented in The Fiscal Monitor have not been audited or reviewed by an external auditor.
- 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.
- 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.
- 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.
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.
April 2020
© Her Majesty the Queen in Right of Canada (2020)
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
Page details
- Date modified: