Canada's Fiscal Progress Through 2000-2001

Also published as Chapter 3 of the Budget Plan.


Budget 2001

Canadians today face a period of significant economic uncertainty.

For the first time in 25 years, we find ourselves in the midst of a global economic slowdown, which has been made worse by the September 11 terrorist attacks on the U.S.

Budget 2001 builds on the Government’s long-term plan for a stronger economy and a more secure society, but it also responds to immediate economic and security concerns. It does this in four ways:

Highlights

Fourth consecutive budgetary surplus

Federal Budgetary Balance - bpc3-1e.gif (13,317 bytes)

Better than expected fiscal outcome for 2000-01 due to strong economic growth and lower spending

Table 1
Fiscal Outcome: Changes Between the October 2000 Economic Statement and Budget Update and End of Fiscal Year 2000-01


 

(billions of dollars)

October 2000 Statement projected surplus

11.9

Impact of economic developments1

 

Budgetary revenues

 

  Personal income tax

0.9

  Corporate and other income tax

0.5

  Excise taxes and duties

1.9

  Non-tax revenues

1.7

  Total revenues

4.9

Program spending

 

  Major transfers to persons

0.1

  Major transfers to other levels of government

0.3

  Direct program spending

2.6

  Total program spending

3.0

Public debt charges

0.1

Net impact of economic developments

8.0

Policy decisions since October 2000 Statement affecting 2000-01

 

Major transfers to other levels of government

 

  Lifting of equalization ceiling for 1999-2000

-0.8

Direct program spending

 

  Canada Foundation for Innovation

-0.8

  Agricultural assistance

-0.5

  Genome Canada

-0.1

  Defence/other departmental operating expenditures

-0.7

Total spending measures

-2.7

Net change

5.2

Outcome for 2000-01

17.1


Note: Numbers may not add due to rounding.
1 A positive number implies an improvement in the budgetary balance while a negative number implies a deterioration in the budgetary balance.

Fiscal progress from 1993-94 to 2000-01

Table 2
Change in the Federal Budgetary Balance Relative to the Size of the Economy


 

1993-94

2000-01

Change

Contribution


 

(per cent of GDP)

 (per cent)

Budgetary revenues

15.9

16.9

1.0

13.5

Program spending

16.4

11.3

-5.1

70.0

Public debt charges

5.2

4.0

-1.2

16.5

Budgetary balance

-5.8

1.6

7.4

100.0


Program spending as a share of GDP at a 50-year low in 2000-01

Federal Program Spending as a Percentage of GDP - bpc3-2e.gif (10,050 bytes)

The debt-to-GDP ratio declined for the fifth consecutive year

Federal Net Debt - bpc3-3e.gif (13,786 bytes)

Financial source of $19 billion in 2000-01

Table 3
Federal Budgetary Surplus and Financial Source


 

1999-00

2000-01


(billions of dollars)

Budgetary surplus

12.3

17.1

Non-budgetary transactions

   

  Loans, investments and advances

-0.3

-1.7

  Pension and other accounts

7.0

1.3

  Other transactions

-4.4

2.2

  Total

2.3

1.8

Financial source
 (excluding foreign exchange transactions)

14.6

19.0


Note: Numbers may not add due to rounding.

Financial source recorded for the fifth consecutive year in 2000-01

Financial Balance (Excluding Foreign Exchange Transactions) - bpc3-4e.gif (10,599 bytes)

Net public debt reduced by $35.8 billion over the last four years

Table 4
Federal Government Financial Assets and Liabilities


 

1996-97

2000-01

Change


(billions of dollars)

Financial assets

     

Cash and accounts receivable

13.9

19.2

5.2

Foreign exchange accounts

26.8

50.3

23.5

Net loans, investments and advances

16.7

16.0

-0.7

Total financial assets

57.5

85.5

28.0

Gross liabilities

     

Interest-bearing debt

     
  Market debt

    Payable in Canadian dollars

453.8

413.2

-40.6

    Payable in foreign currencies

23.0

33.2

10.1

    Total

476.9

446.4

-30.4

    Public sector pensions
     and other accounts

123.7

142.8

19.1

    Total

600.6

589.2

-11.3

Other liabilities

40.1

43.6

3.5

Gross liabilities

640.7

632.9

-7.8

Net public debt

583.2

547.4

-35.8


Note: Numbers may not add due to rounding.

The decline in net public debt mirrors the decline in market debt

Federal Net Debt and market Debt - bpc3-5e.gif (14,021 bytes)

A majority of the provinces and territories reported budgetary surpluses in 2000-01

Provicial-Territorial Budgetary Balances - bpc3-6e.gif (12050 bytes)

The aggregate federal-provincial-territorial government budget recorded a surplus for the third consecutive year in 2000-01

Federal and Provincial-Territorial Budgetary Balances - bpc3-7e.gif (11192 bytes)

Canada’s financial balance has improved significantly compared to the G-7 average

Total Government Financial Balances - bpc3-8e.gif (10362 bytes)


1  Includes federal, provincial-territorial and local governments as well as the Canada Pension Plan and Quebec Pension Plan. [Return]