Archived - The Fiscal Monitor - September 2022

Highlights

September 2022

There was a budgetary deficit of $2.2 billion in September 2022, compared to a deficit of $11.4 billion in September 2021. The budgetary deficit before net actuarial losses was $1.3 billion, compared to a deficit of $10.1 billion in the same period of 2021-22. The budgetary balance before net actuarial losses is intended to supplement the traditional budgetary balance and improve the transparency of the government's financial reporting by isolating the impact of the amortization of net actuarial losses arising from the revaluation of the government's pension and other employee future benefit plans.

The government's 2022-23 financial results continue to improve compared to 2021-22 as the fiscal impact of the COVID-19 crisis and the unprecedented level of temporary COVID-19 response measures wane.

Chart 1
Monthly Budgetary Balance and Budgetary Balance Excluding Net Actuarial Losses
Chart 1: Monthly Budgetary Balance and Budgetary Balance Excluding Net Actuarial Losses
Text version
Month 2021-22 2022-23 2021-22 excluding net actuarial losses  2022-23 excluding net actuarial losses
April -9,782 2,662 -8,499 3,522
May -13,980 2,661 -12,697 3,521
June -12,709 4,877 -11,426 5,737
July -10,856 -3,867 -9,573 -3,007
August -9,827 -2,454 -8,544 -1,819
September -11,414 -$2,157 -10,131 -$1,312
October -3,684   -5,362  
November -1,443   -583  
December 3,583   4,443  
January -5,176   -4,316  
February 5,470   6,330  
March -25,748   -24,888  

Compared to September 2021:

April to September 2022

The government posted a budgetary surplus of $1.7 billion for the April to September period of the 2022-23 fiscal year, compared to a deficit of $68.6 billion reported for the same period of 2021-22. The budgetary surplus before net actuarial losses was $6.6 billion, compared to a deficit of $60.9 billion in the April to September period of 2021-22.

Compared to 2021-22:

Chart 2
Year-to-Date Budgetary Balance and Budgetary Balance Excluding Net Actuarial Losses
Chart 2: Year-to-Date Budgetary Balance and Budgetary Balance Excluding Net Actuarial Losses

1 Sources: Annual Financial Report of the Government of Canada 2021-2022; Fall Economic Statement 2022.

Text version
2021-22 2022-23 2021-22 excluding net actuarial losses 2022-23 excluding net actuarial losses
April -9,782 2,662 -8,499 3,522
May -23,762 5,323 -21,196 7,043
June -36,471 10,200 -32,622 12,780
July -47,328 6,332 -42,196 9,772
August -57,154 3,878 -50,739 7,953
September -68,568 1,722 -60,870 6,642
October -72,252   -66,232  
November -73,695   -66,815  
December -70,113   -62,373  
January -75,289   -66,689  
February -69,819   -60,359  
March -95,566 -85,246
Actual/projected annual budgetary balance1 -90,212 -36,384 -80,026 -26,573
Table 1
Summary statement of transactions
$ millions
  September April to September
  2021 2022 2021-22 2022-23
Budgetary transactions
Revenues 26,850 31,375 175,817 208,573
Expenses    
Program expenses, excluding net actuarial losses
-34,951 -30,169 -224,995 -184,654
Public debt charges
-2,030 -2,518 -11,692 -17,277
Budgetary balance, excluding net actuarial losses -10,131 -1,312 -60,870 6,642
Net actuarial losses
-1,283 -845 -7,698 -4,920
Budgetary balance (deficit/surplus) -11,414 -2,157 -68,568 1,722
Non-budgetary transactions 17,065 -5,930 -5,160 -31,382
Financial source/requirement 5,651 -8,087 -73,728 -29,660
Net change in financing activities -25,105 -11,835 76,398 14,414
Net change in cash balances -19,454 -19,922 2,670 -15,246
Cash balance at end of period     62,059 77,015

Note: Positive numbers indicate net source of funds. Negative numbers indicate net requirement for funds.

Revenues

Revenues in September 2022 totalled $31.4 billion, up $4.5 billion, or 16.9 per cent, from September 2021, reflecting broad-based improvement in economic activity relative to the greater weight of COVID-19 on the year prior.

Revenues for the April to September period of 2022-23 totalled $208.6 billion, up $32.8 billion, or 18.6 per cent, from the same period in 2021-22.

Table 2
Revenues
September   April to September
2021 2022 Change 2021-22 2022-23 Change
($ millions) (%) ($ millions) (%)
Tax revenues
Income taxes            
Personal
14,022 15,333 9.3 85,555 92,561 8.2
Corporate
3,856 5,528 43.4 28,999 41,372 42.7
Non-resident
705 878 24.5 4,167 6,130 47.1
Total income tax revenues
18,583 21,739 17.0 118,721 140,063 18.0
Other taxes and duties            
Goods and Services Tax
3,120 3,646 16.9 22,384 26,742 19.5
Energy taxes
481 516 7.3 2,547 2,760 8.4
Customs import duties
459 613 33.6 2,705 3,297 21.9
Other excise taxes and duties
448 491 9.6 2,858 3,302 15.5
Total excise taxes and duties
4,508 5,266 16.8 30,494 36,101 18.4
Total tax revenues 23,091 27,005 17.0 149,215 176,164 18.1
Proceeds from the pollution pricing framework 377 426 13.0 2,614 3,560 36.2
Employment Insurance premiums 1,400 1,627 16.2 11,676 13,058 11.8
Other revenues 1,982 2,317 16.9 12,312 15,791 28.3
Total revenues 26,850 31,375 16.9 175,817 208,573 18.6

Note: Totals may not add due to rounding.

Expenses

Program expenses excluding net actuarial losses in September 2022 were $30.2 billion, down $4.8 billion, or 13.7 per cent, from September 2021.

Public debt charges increased $0.5 billion, or 24.0 per cent, largely due to higher interest rates.

Net actuarial losses, which represent the amortization of changes in the value of the government's obligations for pensions and other employee future benefits accrued in previous fiscal years and related assets, were down $0.4 billion, or 34.1 per cent, largely due to an adjustment in the current year to reflect the government's latest annual actuarial valuations. A similar adjustment was not made until October in the prior year.

For the April to September period of 2022-23, program expenses excluding net actuarial losses were $184.7 billion, down $40.3 billion, or 17.9 per cent, from the same period the previous year.

Public debt charges increased by $5.6 billion, or 47.8 per cent, primarily driven by higher interest rates and higher Consumer Price Index adjustments on Real Return Bonds

Net actuarial losses decreased by $2.8 billion, or 36.1 per cent, largely due to an adjustment in August 2022 to reflect updated actuarial valuations prepared for the Public Accounts of Canada 2022. A similar adjustment was not made until October in the prior year.

Table 3
Expenses
  September   April to September  
  2021 2022 Change 2021-22 2022-23 Change
  ($ millions) (%) ($ millions) (%)
Major transfers to persons
Elderly benefits
5,042 5,772 14.5 30,010 33,121 10.4
Employment Insurance benefits
3,186 1,349 -57.7 24,552 10,943 -55.4
COVID-19 income support for workers1
1,679 - -100.0 13,468 241 -98.2
Children's benefits
2,069 2,033 -1.7 13,365 12,159 -9.0
Total major transfers to persons 11,976 9,154 -23.6 81,395 56,464 -30.6
Major transfers to other levels of government
Canada Health Transfer
3,594 3,767 4.8 21,563 22,604 4.8
Canada Social Transfer
1,289 1,328 3.0 7,737 7,969 3.0
Equalization
1,743 1,827 4.8 10,455 10,960 4.8
Territorial Formula Financing
298 310 4.0 2,593 2,695 3.9
Canada-wide early learning and child care
- - n/a - 2,219 n/a
Canada Community-Building Fund
- - n/a 2,320 1,134 -51.1
Home care and mental health
81 - -100.0 831 1 -99.9
Other fiscal arrangements2
-471 -1,022 -117.0 -2,848 -3,647 -28.1
Total major transfers to other levels of government 6,534 6,210 -5.0 42,651 43,935 3.0
Proceeds from the pollution pricing framework returned 61 25 -59.0 3,588 3,219 -10.3
Direct program expenses
Canada Emergency Wage Subsidy
2,641 -9 -100.3 17,223 -122 -100.7
Other transfer payments
5,322 5,450 2.4 30,729 29,127 -5.2
Operating expenses
8,417 9,339 11.0 49,409 52,031 5.3
Total direct program expenses 16,380 14,780 -9.8 97,361 81,036 -16.8
Total program expenses, excluding net actuarial losses 34,951 30,169 -13.7 224,995 184,654 -17.9
Public debt charges 2,030 2,518 24.0 11,692 17,277 47.8
Total expenses, excluding net actuarial losses 36,981 32,687 -11.6 236,687 201,931 -14.7
Net actuarial losses
1,283 845 -34.1 7,698 4,920 -36.1
Total expenses 38,264 33,532 -12.4 244,385 206,851 -15.4

Note: Totals may not add due to rounding.
1 COVID-19 income support for workers includes the Canada Recovery Benefit, the Canada Recovery Caregiving Benefit, the Canada Recovery Sickness Benefit, and the Canada Worker Lockdown Benefit.
2 Other fiscal arrangements include the Youth Allowance Recovery and Alternative Payments for Standing Programs, which represent a recovery from Quebec of a tax point transfer; statutory subsidies; and, other items.

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

Table 4
Total expenses by object of expense
  September   April to September  
  2021 2022 Change 2021-22 2022-23 Change
($ millions) (%) ($ millions) (%)
Transfer payments 26,534 20,830 -21.5 175,586 132,623 -24.5
Other expenses
Personnel, excluding net actuarial losses 5,067 5,159 1.8 29,078 30,919 6.3
Transportation and communications 236 245 3.8 1,032 1,277 23.7
Information 37 -9 -124.3 221 135 -38.9
Professional and special services 1,372 1,356 -1.2 6,010 6,514 8.4
Rentals 293 267 -8.9 1,846 2,074 12.4
Repair and maintenance 318 313 -1.6 1,363 1,741 27.7
Utilities, materials and supplies 471 815 73.0 3,820 3,532 -7.5
Other subsidies and expenses 445 756 69.9 3,540 3,221 -9.0
Amortization of tangible capital assets 170 429 152.4 2,453 2,560 4.4
Net loss on disposal of assets 8 8 0.0 46 58 26.1
Total other expenses 8,417 9,339 11.0 49,409 52,031 5.3
Total program expenses, excluding net actuarial losses 34,951 30,169 -13.7 224,995 184,654 -17.9
Public debt charges 2,030 2,518 24.0 11,692 17,277 47.8
Total expenses, excluding net actuarial losses 36,981 32,687 -11.6 236,687 201,931 -14.7
Net actuarial losses 1,283 845 -34.1 7,698 4,920 -36.1
Total expenses 38,264 33,532 -12.4 244,385 206,851 -15.4

Note: Totals may not add due to rounding.

Chart 3
Revenues and expenses (April to September 2022)
Chart 3: Revenues and expenses (April to August 2022)

Note: Totals may not add due to rounding.

Text version
Revenues $ billions
Other revenues 21.9
Excise taxes and duties 36.1
Corporate income taxes 41.4
EI premiums 13.1
Personal income taxes 92.6
Proceeds from the pollution pricing framework 3.6
Total 208.6
Expenses
Net actuarial losses 4.9
Public debt charges 17.3
Major transfers to other levels of government 43.9
Direct program expenses 81.0
Major transfers to persons 56.5
Proceeds from the pollution pricing framework returned 3.2
Total 206.9

Financial requirement of $29.7 billion for April to September 2022

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 surplus of $1.7 billion and a requirement of $31.4 billion from non-budgetary transactions, there was a financial requirement of $29.7 billion for the April to September 2022 period, compared to a financial requirement of $73.7 billion for the same period of the previous year. The lower financial requirement in 2022-23 largely reflects the improvement in the budgetary balance, offset in part by an increase in the financial requirement from non-budgetary transactions, due mainly to a year-over-year timing difference in cash settlements for matured treasury bills, which affected accounts payable, accrued liabilities and accounts receivable.

Table 5
The budgetary balance and financial source/requirement
$ millions
  September April to September
  2021 2022 2021-22 2022-23
Budgetary balance (deficit/surplus) -11,414 -2,157 -68,568 1,722
Non-budgetary transactions
Accounts payable, accrued liabilities and accounts receivable1 19,804 -5,450 8,215 -16,732
Pensions, other future benefits, and other liabilities 1,225 -642 7,330 4,926
Foreign exchange accounts and derivatives1 -1,673 1,596 -11,071 -12,810
Loans, investments and advances -2,008 -1,573 -9,668 -6,196
Non-financial assets -283 139 34 -570
Total non-budgetary transactions 17,065 -5,930 -5,160 -31,382
Financial source/requirement 5,651 -8,087 -73,728 -29,660

Note: Totals may not add due to rounding.
1 Comparative figures have been reclassified to reflect the current year presentation under a new accounting standard. See Note 8 at the end of this document for further details.

Net financing activities up $14.4 billion

The government financed this financial requirement of $29.7 billion by increasing unmatured debt by $14.4 billion and drawing down cash balances by $15.2 billion. The increase in unmatured debt was achieved primarily through the issuance of marketable bonds.

Cash balances at the end of September 2022 stood at $77.0 billion, up $15.0 billion from their level at the end of September 2021.

Table 6
Financial source/requirement and net financing activities
$ millions
  September April to September
  2021 2022 2021-22 2022-23
Financial source/requirement 5,651 -8,087 -73,728 -29,660
Net increase (+)/decrease (-) in financing activities
Unmatured debt transactions        
Canadian currency borrowings
       
Marketable bonds1
3,315 -14,346 94,199 12,200
Treasury bills1
-29,596 4,127 -25,022 -3,683
Retail debt
-2 - -15 -
Total Canadian currency borrowings
-26,283 -10,219 69,162 8,517
Foreign currency borrowings1
1,204 -1,599 7,220 6,040
Total market debt transactions
-25,079 -11,818 76,382 14,557
Obligations related to capital leases and other unmatured debt
-26 -17 16 -143
Net change in financing activities -25,105 -11,835 76,398 14,414
Change in cash balance -19,454 -19,922 2,670 -15,246
Cash balance at end of period     62,059 77,015

Note: Totals may not add due to rounding.
1 Comparative figures have been reclassified to reflect the current year presentation under a new accounting standard. See Note 8 at the end of this document for further details.

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 and remeasurement gains and losses.

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.

Remeasurement gains and losses represent changes in the fair value of derivatives, such as swap agreements and foreign exchange forward agreements, which are used by the government to manage financial risks. As with other comprehensive income or loss, remeasurement gains and losses are not reflected in the budgetary balance, but are instead charged directly to the accumulated deficit. The government began accounting for remeasurement gains and losses in 2022-23 with the adoption of a new standard of the Public Sector Accounting Board regarding financial instruments (see Note 8).

The accumulated deficit decreased by $5.4 billion over the April to September 2022 period, reflecting the $1.7-billion budgetary surplus, $0.6 billion in other comprehensive income, and $3.1 billion in net remeasurement gains. 

Table 7
Condensed statement of assets and liabilities
$ millions
  April 1, 2022
Opening balance Note 8
September 30, 2022 Change
Liabilities
Accounts payable and accrued liabilities
262,220 226,043 -36,177
Derivative financial liabilities1
2,778 327 -2,451
Interest-bearing debt
     
Unmatured debt
     
Payable in Canadian currency
     
Marketable bonds
1,043,989 1,056,189 12,200
Treasury bills
186,877 183,194 -3,683
Subtotal
1,230,866 1,239,383 8,517
Payable in foreign currencies
14,473 20,513 6,040
Obligations related to capital leases and other unmatured debt
5,366 5,223 -143
Total unmatured debt
1,250,705 1,265,119 14,414
Pension and other liabilities
Public sector pensions
167,666 165,323 -2,343
Other employee and veteran future benefits
159,705 169,026 9,321
Other liabilities
7,707 5,655 -2,052
Total pension and other liabilities
335,078 340,004 4,926
Total interest-bearing debt
1,585,783 1,605,123 19,340
Total liabilities 1,850,781 1,831,493 -19,288
Financial assets
Cash and accounts receivable
280,026 245,335 -34,691
Foreign exchange accounts
104,031 120,649 16,618
Derivative financial assets1
3,403 206 -3,197
Loans, investments, and advances (net of allowances)2
207,031 213,842 6,811
Public sector pension assets
9,203 9,203 -
Total financial assets 603,694 589,235 -14,459
Net debt 1,247,087 1,242,258 -4,829
Non-financial assets 105,268 105,838 570
Federal debt (accumulated deficit) 1,141,819 1,136,420 -5,399

Note: Totals may not add due to rounding.
1 September 30, 2022 net balance of derivative assets and derivative liabilities includes remeasurement gains of $3.1 billion resulting from the change in their fair values for the April to September 2022 period.
2 September 30, 2022 amount includes $0.6 billion in other comprehensive income from enterprise Crown corporations and other government business enterprises for the April to September 2022 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 Standards Plus, which are 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. Reclassification of comparative information and adjustment to opening balances:
    1. Starting in 2022-23, the government has adopted a new standard of the Public Sector Accounting Board regarding asset retirement obligations. Asset retirement obligations represent requirements under an agreement, contract, legislation, or a constructive or equitable obligation to undertake specific actions to retire tangible capital assets at the end of their useful lives. This includes activities such as decommissioning of nuclear reactors and removal of asbestos. The adoption of this standard has not had a material effect on the budgetary balance for the current year. This standard has been applied on a modified retroactive basis and the prior year's budgetary transactions have not been restated for the purposes of The Fiscal Monitor. However, an adjustment to the opening balance of the accumulated deficit for 2022-23 has been reflected in Table 7, Condensed Statement of Assets and Liabilities. The amount of this adjustment may be revised as more information becomes available.  
    2. Also starting in 2022-23, the government has adopted a new standard of the Public Sector Accounting Board regarding financial instruments. Financial instruments include receivables, payables, equity instruments, debt, and derivatives, such as forward contracts and cross-currency swaps. Under the new standard, derivatives, which were previously recorded at historical cost, are recognized at fair value. Changes in the fair value of derivatives are not reflected in the budgetary balance, but are instead charged directly to the accumulated deficit as remeasurement gains and losses. The adoption of this standard has also resulted in the reclassification of certain accounts, as follows:
      • cross-currency swaps, previously reported as part of unmatured debt, are classified as derivatives and reported outside of unmatured debt;
      • forward contracts, previously reported as part of accounts payable and accrued liabilities, are reported as derivatives;
      • accrued interest, previously reported as part of accounts payable and accrued liabilities, is now included with the associated category of unmatured debt (i.e., marketable bonds, treasury bills, and foreign currency borrowings); and,
      • unamortized discounts and premiums on market debt, previously reported as a separate item within unmatured debt, are now included with the associated category of unmatured debt (i.e., marketable bonds, treasury bills, and foreign currency borrowings).
    This standard has been applied on a prospective basis. The prior year's budgetary transactions have not been restated, but balances in the prior year have been reclassified to reflect the current year's presentation. An adjustment to the opening balance of the accumulated deficit for 2022-23 is also reflected in Table 7, Condensed Statement of Assets and Liabilities.

A reconciliation of the reclassification and adjustment to the opening balance of the government's financial position as at April 1, 2022 is summarized as follows:

Table 8
Summary of reclassifications and adjustments to opening balances
$ millions
  March 31, 2022 Closing balance1 Effect of change in accounting policy for asset retirement obligations Effect of change in accounting policy for financial instruments April 1, 2022 Opening balance
Liabilities
Accounts payable and accrued liabilities 260,288 6,095 (4,163) 262,220
Derivative financial liabilities - - 2,778 2,778
Interest-bearing debt  
Unmatured debt
 
Payable in Canadian currency
 
Marketable bonds
1,030,896 - 13,093 1,043,989
Treasury bills
187,381 - (504) 186,877
Subtotal
1,218,277 - 12,589 1,230,866
Payable in foreign currencies
14,451 - 22 14,473
Cross-currency swap revaluation
(2,246) - 2,246 -
Unamortized discounts and premiums on market debt
7,443 - (7,443) -
Obligations related to capital leases and other unmatured debt
5,366 - - 5,366
Total unmatured debt
1,243,291 - 7,414 1,250,705
Pension and other liabilities 335,078 - - 335,078
Total interest-bearing debt 1,578,369 - 7,414 1,585,783
Total liabilities 1,838,657 6,095 6,029 1,850,781
Financial assets
Derivative financial assets - - 3,403 3,403
Other financial assets 600,291 - - 600,291
Total financial assets 600,291 - 3,403 603,694
Net debt 1,238,366 6,095 2,626 1,247,087
Non-financial assets 103,873 1,395 - 105,268
Federal debt (accumulated deficit) 1,134,493 4,700 2,626 1,141,819

1 Source: Public Accounts of Canada 2022.


Note: Unless otherwise noted, changes in financial results are presented on a year-over-year basis.

For inquiries about this publication, contact Bradley.Recker@fin.gc.ca.

November 2022

©His Majesty the King in right of Canada, as represented by the Deputy Prime Minister and Minister of Finance, 2022

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: