Ottawa, August 22, 2008
2008-059
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The Honourable Jim Flaherty, Minister of Finance, today released The Fiscal Monitor for June 2008.
There was a budgetary surplus of $1.7 billion in June 2008, compared to a surplus of $2.8 billion in June 2007. Budgetary revenues were up $0.5 billion, or 2.4 per cent, from June 2007, reflecting high er revenues from income taxes and excise taxes and duties, excluding the goods and services tax (GST). Program expenses increased by $1.7 billion, or 11.1 per cent, compared to June 2007, largely reflecting increases in transfer payments to other levels of government and subsidies and other transfers. Public debt charges decreased by $0.1 billion compared to June 2007.
For the first three months of the 2008–09 fiscal year, the budgetary surplus is estimated at $1.2 billion, down $4.4 billion from the $5.6-billion surplus reported in the same period of 2007–08. Budgetary revenues decreased by $1.1 billion, or 1.8 per c ent, reflecting declines in corporate income tax and GST revenues. Program expenses were up $3.8 billion, or 8.4 per cent, due to higher transfer payments and operating expenses of departments and agencies.
Monthly program spend ing growth will initially be higher this year but by mid-year will moderate considerably, consistent with the 3.4-per-cent annual growth projected in Budget 2008. The large year-over-year percentage increase in first-quarter program sp ending in 2008–09 reflects the fact that program spending in the early months of 2007–08 was low, but rose in the second half of the year, once Budget 2007 fiscal balance and spending measures came into effect.
Publi c debt charges were down $0.5 billion on a year-over-year basis, reflecting reductions in market debt.
The global economy is slowing and Canada is not an island," said Minister Flaherty. "We are feeling the impacts of global economic factors beyond the control of any one individual or government. While over the course of the year we are projecting positive economic growth, the outlook for real GDP growth in Canada, based on private sector forecasts, has been revised down to 1.1 per cent in 2008, from 1.7 per cent in the budget projection. That being said, the outlook for nominal Canadian GDP growth is largely unchanged from Budget 2008. Canada is in a better position than most countries to weather this economic storm as our economic fundamentals remain solid."
On balance, d evelopments over the first three months of the 2008–09 fiscal year are consistent with the fiscal projections for 2008–09 set out in the 2008 budget.
Minister Flaherty also noted that three months of fiscal informati on is not sufficient to draw any firm conclusions about the outlook for the year as a whole. A comprehensive update of the fiscal outlook for this year and beyond will be provided in the fall Economic and Fiscal Update.
T he Fiscal Monitor is a monthly document that provides highlights of the federal government's fiscal performance, including monthly revenues, expenses, the budgetary balance and the financial source/requirement.
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