June 2011

There was a budgetary deficit of $2.2 billion in June 2011, compared to a $2.8-billion deficit in June 2010.

Revenues increased by $1.6 billion, or 8.7 per cent, to $19.4 billion.

• Personal income tax revenues were up $0.6 billion, or 7.5 per cent.
• Corporate income tax revenues were up $0.2 billion, or 8.2 per cent.
• Non-resident income tax revenues were up $0.2 billion, or 63.4 per cent.
• Excise taxes and duties were up $22 million, or 0.6 per cent. GST revenues were up $24 million, or 1.1 per cent. Energy taxes were down $14 million, customs import duties were up $11 million, and other excise taxes and duties were up $1 million.
• Employment Insurance (EI) premium revenues were up $0.1 billion, or 7.5 per cent, consistent with the 2011 premium rate of $1.78 per $100 of insurable earnings.
• 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 $0.4 billion, or 23.4 per cent, reflecting, in part, an increase in net profits from enterprise Crown corporations.

Program expenses in June 2011 were $19.0 billion, up $0.9 billion, or 5.1 per cent, from June 2010. Program expenses include transfer payments and other program expenses.

Transfer payments increased by $0.9 billion, or 7.7 per cent.

• Major transfers to persons, consisting of elderly, EI and children’s benefits, increased by $76 million, or 1.4 per cent. Elderly benefits increased by $0.2 billion, or 5.1 per cent. EI benefit payments decreased by $0.1 billion, or 6.1 per cent, reflecting a decrease in regular benefits. Children’s benefits, which consist of the Canada Child Tax Benefit and the Universal Child Care Benefit, increased by $10 million.
• Major transfers to other levels of government, consisting of federal transfers in support of health and other social programs (Canada Health Transfer and Canada Social Transfer), fiscal transfers, transfers to provinces on behalf of Canada’s cities and communities, and Alternative Payments for Standing Programs, increased by $1.2 billion, or 28.4 per cent, reflecting legislated growth in transfer programs as well as an increase in the Canada’s cities and communities transfer. The timing of the cities and communities transfer varies from year to year.
• Other transfer payments were down $0.3 billion, or 13.2 per cent, largely reflecting a decline in infrastructure transfers, consistent with the wind-down of Canada’s Economic Action Plan.

Other program expenses consist of operating expenses of Crown corporations, departments and agencies, including National Defence, and also reflect the ongoing assessment of the Government’s liabilities. These expenses decreased by $3 million from the previous year.

Public debt charges increased by $32 million, or 1.2 per cent.

April to June 2011

For the first three months of the 2011–12 fiscal year, there was a budgetary deficit of $5.5 billion, compared to a deficit of $7.2 billion reported during the same period of 2010–11.

Revenues increased by $2.6 billion, or 4.8 per cent, to $57.7 billion.

• Personal income tax revenues were up $2.1 billion, or 7.7 per cent.
• Corporate income tax revenues were up $0.6 billion, or 9.3 per cent, reflecting an increase in receipts of about 3.6 per cent and a decrease of roughly 7.1 per cent in refunds of taxes paid.
• Non-resident income tax revenues were up $0.2 billion, or 22.8 per cent.
• Excise taxes and duties were down $0.7 billion, or 7.5 per cent, mainly reflecting a decrease in GST revenues of about $0.7 billion, or 11.3 per cent. Energy taxes were up $15 million, customs import duties were up $26 million, and other excise taxes and duties were down $55 million.
• EI premium revenues were up $0.4 billion, or 8.2 per cent, reflecting growth in insurable earnings and the 2011 premium rate of $1.78 per $100 of insurable earnings.
• Other revenues were up $0.1 billion, or 1.4 per cent.

For the April to June 2011 period, program expenses were $55.0 billion, up $0.2 billion, or 0.4 per cent, from the same period the previous year.

Transfer payments increased by $47 million, or 0.1 per cent.

• Major transfers to persons were up $40 million, or 0.2 per cent. Elderly benefits increased by $0.4 billion, or 4.9 per cent, in line with growth in the elderly population and changes in consumer prices, to which benefits are fully indexed. EI benefit payments decreased by $0.4 billion, or 8.7 per cent, reflecting a decrease in regular benefits. Children’s benefits were up $42 million.
• Major transfers to other levels of government were up $0.9 billion, or 6.4 per cent, largely reflecting legislated growth in transfers.
• Other transfer payments were down $0.9 billion, or 12.7 per cent, reflecting a decline in infrastructure transfers, consistent with the wind-down of Canada’s Economic Action Plan.

Other program expenses increased by $0.2 billion, or 0.9 per cent, from the previous year’s level.

Public debt charges increased by $0.7 billion, or 9.3 per cent, reflecting Consumer Price Index adjustments on real return bonds and a higher stock of interest-bearing debt.

Financial requirement of $15.8 billion for April to June 2011

The budgetary balance is presented on an accrual basis of accounting, recording government revenues and expenses when they are receivable 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 $5.5 billion and a requirement of $10.3 billion from non-budgetary transactions, there was a financial requirement of $15.8 billion for the April to June 2011 period, compared to a financial requirement of $22.8 billion for the same period the previous year.

Net financing activities up $13.0 billion

The Government financed this financial requirement of $15.8 billion by increasing market debt by $13.0 billion and reducing cash balances by $2.8 billion. The increase in market debt was achieved primarily through the issuance of marketable bonds and treasury bills. 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 June 2011 stood at $7.4 billion, up $0.8 billion from their level at the end of June 2010.