February 2012

There was a budgetary surplus of $1.5 billion in February 2012, compared to a $0.6-billion deficit in February 2011.

Revenues increased by $1.1 billion, or 5.2 per cent, to $22.6 billion.

• Personal income tax revenues were up $0.4 billion, or 3.9 per cent.
• Corporate income tax revenues were up $0.4 billion, or 8.8 per cent.
• Non-resident income tax revenues were up $0.1 billion, or 35.9 per cent.
• Excise taxes and duties were up $0.2 billion, or 5.0 per cent. GST revenues were up $0.1 billion, or 6.2 per cent. Energy taxes were down $12 million, customs import duties were up $44 million, and other excise taxes and duties were up $2 million. 
• Employment Insurance (EI) premium revenues were up $0.1 billion, or 6.8 per cent, consistent with the 5-cent increase in EI employee premium rates effective January 1, 2012. As announced on November 8, 2011, the Government reduced the maximum potential increase in EI premium rates in 2012 from 10 cents to 5 cents. The premium rate for 2012 is $1.83 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 down $0.1 billion, or 2.8 per cent. 

Program expenses in February 2012 totalled $18.8 billion, down $0.7 billion, or 3.6 per cent, from February 2011. Program expenses include transfer payments and other program expenses.      

Transfer payments increased by $11 million, or 0.1 per cent.

• Major transfers to persons, consisting of elderly, EI and children’s benefits, increased by $0.1 billion, or 2.0 per cent. Elderly benefits increased by $0.2 billion, or 7.3 per cent, reflecting the introduction of the Guaranteed Income Supplement top-up benefit in July 2011, as well as growth in the elderly population and consumer price inflation, to which benefits are fully indexed. EI benefit payments decreased by $0.1 billion, or 6.6 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 $9 million.   
• Major transfers to other levels of government, consisting of federal transfers in support of health and other social programs (primarily the Canada Health Transfer and the Canada Social Transfer), fiscal transfers (Equalization, transfers to the territories, as well as a number of smaller transfer programs), transfers to provinces on behalf of Canada’s cities and communities, and the Quebec Abatement, increased by $0.1 billion, or 3.2 per cent, primarily reflecting legislated growth in transfers.
• Other transfer payments were down $0.2 billion, or 10.1 per cent, reflecting in part a decline in infrastructure transfers, consistent with the wind-down of the stimulus provided through 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 $0.7 billion, or 10.1 per cent, largely reflecting a reduction in the Government’s expenses with respect to its estimated liabilities.

Public debt charges decreased by $0.3 billion, or 10.1 per cent, reflecting Consumer Price Index adjustments on real return bonds.

April 2011 to February 2012

For the first 11 months of the 2011–12 fiscal year, there was a budgetary deficit of $14.5 billion, compared to a deficit of $28.3 billion reported during the same period of 2010–11. 

Revenues increased by $9.8 billion, or 4.7 per cent, to $220.1 billion.

• Personal income tax revenues were up $7.1 billion, or 6.8 per cent. 
• Corporate income tax revenues were up $3.0 billion, or 12.2 per cent, reflecting an increase in receipts of about 4.9 per cent and a decrease of 9.1 per cent in refunds of taxes paid.
• Non-resident income tax revenues were up $0.1 billion, or 3.0 per cent. 
• Excise taxes and duties were down $0.4 billion, or 0.9 per cent, largely reflecting a decrease in GST revenues of about $0.6 billion, or 2.6 per cent. Energy taxes were up $3 million, customs import duties were up $0.4 billion, and other excise taxes and duties were down $0.1 billion. 
• EI premium revenues were up $0.8 billion, or 5.4 per cent, reflecting growth in insurable earnings and higher premium rates of $1.78 and $1.83 per $100 of insurable earnings for 2011 and 2012, respectively.
• Other revenues were down $0.8 billion, or 3.5 per cent, due in large part to gains realized in 2010–11 on the Government’s sale of shares in General Motors that did not occur in 2011–12.

For the April 2011 to February 2012 period, program expenses were $206.2 billion, down $4.0 billion, or 1.9 per cent, from the same period the previous year. 

Transfer payments decreased by $4.2 billion, or 2.9 per cent.

• Major transfers to persons were up $0.3 billion, or 0.5 per cent. Elderly benefits increased by $2.2 billion, or 6.8 per cent, reflecting the introduction of the Guaranteed Income Supplement top-up benefit, as well as growth in the elderly population and consumer price inflation, to which benefits are fully indexed. EI benefit payments decreased by $2.0 billion, or 11.2 per cent, reflecting a decrease in regular benefits. Children’s benefits were up $0.1 billion, or 1.2 per cent.  
• Major transfers to other levels of government were up $1.3 billion, or 2.8 per cent, reflecting legislated growth in transfers and transfer protection payments to provinces, as well as an increase in transfers to Canada’s cities and communities, offset in part by the recording of $1.6 billion receivable from British Columbia for the repayment of Harmonized Sales Tax transitional assistance.   
• Other transfer payments were down $5.8 billion, or 19.0 per cent, reflecting declines across a number of departments, including a decline in infrastructure transfers, consistent with the wind-down of the stimulus provided through Canada’s Economic Action Plan, and the revaluation of the Government’s liability to Ontario for the province’s one third participation in the value of the Government’s common shares in General Motors. 

Other program expenses increased by $0.2 billion, or 0.3 per cent, from the previous year’s level. 

Public debt charges increased by $40 million, or 0.1 per cent.       

Financial requirement of $31.9 billion for April 2011 to February 2012

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 $14.5 billion and a requirement of $17.4 billion from non-budgetary transactions, there was a financial requirement of $31.9 billion for the April 2011 to February 2012 period, compared to a financial requirement of $46.8 billion for the same period the previous year. 

Net financing activities up $36.3 billion

The Government financed this financial requirement of $31.9 billion and increased cash balances by $4.3 billion by increasing market debt by $36.3 billion. The increase in market 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 2012 stood at $14.5 billion, up $9.6 billion from their level at the end of February 2011.  

 

Table 1
Summary statement of transactions
$ millions

	February		April to February
	2011	2012	2010–11	2011–12
Budgetary transactions
Revenues	21,468	22,581	210,252	220,082
Expenses
Program expenses	-19,543	-18,844	-210,182	-206,211
Public debt charges	-2,517	-2,262	-28,330	-28,370
Budgetary balance (deficit/surplus)	-592	1,475	-28,260	-14,499
Non-budgetary transactions	-2,600	-3,263	-18,547	-17,446
Financial source/requirement	-3,192	-1,788	-46,807	-31,945
Net change in financing activities	1,856	5,114	26,048	36,271
Net change in cash balances	-1,336	3,326	-20,759	4,326
Cash balance at end of period			4,864	14,481
Note: Positive numbers indicate net source of funds.  Negative numbers indicate net requirement for funds.

 

Table 2
Revenues

	February			April to February
	2011 ($ millions)	2012 ($ millions)	Change  (%)	2010–11 ($ millions)	2011–12 ($ millions)	Change (%)
Tax revenues
Income taxes
Personal income tax	9,269	9,633	3.9	103,873	110,952	6.8
Corporate income tax	4,422	4,812	8.8	24,279	27,242	12.2
Non-resident income tax	309	420	35.9	4,760	4,901	3.0
Total income tax	14,000	14,865	6.2	132,912	143,095	7.7
Excise taxes and duties
Goods and Services Tax	2,044	2,171	6.2	24,555	23,922	-2.6
Energy taxes	450	438	-2.7	4,899	4,902	0.1
Customs import duties	309	353	14.2	3,184	3,544	11.3
Other excise taxes and duties	400	402	0.5	5,086	4,999	-1.7
Total excise taxes and duties	3,203	3,364	5.0	37,724	37,367	-0.9
Total tax revenues	17,203	18,229	6.0	170,636	180,462	5.8
Employment Insurance premiums	2,153	2,300	6.8	15,664	16,504	5.4
Other revenues	2,112	2,052	-2.8	23,952	23,116	-3.5
Total revenues	21,468	22,581	5.2	210,252	220,082	4.7
Note: Totals may not add due to rounding.

 

Table 3
Expenses

	February			April to February
	2011 ($ millions)	2012 ($ millions)	Change (%)	2010–11 ($ millions)	2011–12 ($ millions)	Change (%)
Transfer payments
Major transfers to persons
Elderly benefits	3,057	3,281	7.3	32,672	34,895	6.8
Employment Insurance benefits	1,770	1,654	-6.6	18,300	16,253	-11.2
Children's benefits	1,030	1,039	0.9	11,686	11,830	1.2
Total	5,857	5,974	2.0	62,658	62,978	0.5
Major transfers to other levels of government
Support for health and other social programs
Canada Health Transfer	2,182	2,262	3.7	23,885	24,907	4.3
Canada Social Transfer	931	960	3.1	10,247	10,555	3.0
Total	3,113	3,222	3.5	34,132	35,462	3.9
Fiscal transfers1	1,379	1,462	6.0	16,198	16,049	-0.9
Canada's cities and communities	108	35	-67.6	1,727	2,078	20.3
Quebec Abatement1,2	-354	-339	-4.2	-3,397	-3,584	5.5
Total	4,246	4,380	3.2	48,660	50,005	2.8
Other transfer payments
Aboriginal Affairs and Northern Development	385	418	8.6	4,919	4,985	1.3
Agriculture and Agri-Food	21	152	623.8	1,812	1,538	-15.1
Foreign Affairs and International Trade	346	352	1.7	2,958	2,843	-3.9
Health	129	151	17.1	2,277	2,294	0.7
Human Resources and Skills Development	246	222	-9.8	3,316	3,024	-8.8
Industry	272	256	-5.9	2,987	2,183	-26.9
Other	979	587	-40.0	12,445	8,025	-35.5
Total	2,378	2,138	-10.1	30,714	24,892	-19.0
Total transfer payments	12,481	12,492	0.1	142,032	137,875	-2.9
Other program expenses
Crown corporations	874	777	-11.1	9,731	9,060	-6.9
Defence	1,650	1,679	1.8	17,255	18,682	8.3
All other departments and agencies	4,538	3,896	-14.1	41,164	40,594	-1.4
Total other program expenses	7,062	6,352	-10.1	68,150	68,336	0.3
Total program expenses	19,543	18,844	-3.6	210,182	206,211	-1.9
Public debt charges	2,517	2,262	-10.1	28,330	28,370	0.1
Total expenses	22,060	21,106	-4.3	238,512	234,581	-1.6
(1) Comparative figures have been reclassified to conform to the presentation in the 2010–11 audited financial statements. (2) These amounts represent recoveries of the Quebec Abatement which is comprised of federal tax abated under the Alternative Payments for Standing Programs and the Youth Allowance Program of that province. Note: Totals may not add due to rounding.

 

Table 4
The budgetary balance and financial source/requirement
$ millions

	February			April to February
	2011	2012		2010–11	2011–12
Budgetary balance (deficit/surplus)	-592	1,475		-28,260	-14,499
Non-budgetary transactions
Capital investment activities	-360	-575		-4,357	-2,694
Other investing activities	-73	-251		-2,418	-1,364
Pension and other accounts	356	561		5,138	4,265
Other activities
Accounts payable, receivables, accruals and allowances	-2,782	-515		-19,833	-13,195
Foreign exchange activities	-129	-2,791		-1,225	-8,257
Amortization of tangible capital assets	388	308		4,148	3,799
Total other activities	-2,523	-2,998		-16,910	-17,653
Total non-budgetary transactions	-2,600	-3,263		-18,547	-17,446
Financial source/requirement	-3,192	-1,788		-46,807	-31,945
Note: Totals may not add due to rounding.

 

Table 5
Financial source/requirement and net financing activities
$ millions

	February		April to February
	2011	2012	2010–11	2011–12
Financial source/requirement	-3,192	-1,788	-46,807	-31,945
Net increase (+)/decrease (-) in financing activities
Unmatured debt transactions
Canadian currency borrowings
Marketable bonds	4,664	6,208	41,704	36,421
Treasury bills	-1,400	-3,600	-12,300	-2,700
Retail debt	-224	-78	-1,752	-1,153
Other	0	0	-425	-16
Total	3,040	2,530	27,227	32,552
Foreign currency borrowings	-110	2,858	-549	3,207
Total	2,930	5,388	26,678	35,759
Cross-currency swap revaluation	-1,083	-331	-1,350	270
Unamortized discounts and premiums on market debt	19	44	835	314
Obligations related to capital leases	-10	13	-115	-72
Net change in financing activities	1,856	5,114	26,048	36,271
Change in cash balance	-1,336	3,326	-20,759	4,326
Note: Totals may not add due to rounding.

 

Table 6
Condensed statement of assets and liabilities
$ millions

	March 31, 2011	February 29, 2012	Change
Liabilities
Accounts payable and accrued liabilities	119,060	110,329	-8,731
Interest-bearing debt
Unmatured debt
Payable in Canadian currency
Marketable bonds	416,080	452,501	36,421
Treasury bills	162,980	160,280	-2,700
Retail debt	10,141	8,988	-1,153
Other	27	11	-16
Subtotal	589,228	621,780	32,552
Payable in foreign currencies	7,628	10,835	3,207
Cross-currency swap revaluation	-5,091	-4,821	270
Unamortized discounts and premiums on market debt	-4,485	-4,171	314
Obligations related to capital leases        and other unmatured debt	3,875	3,803	-72
Total unmatured debt	591,155	627,426	36,271
Pension and other liabilities
Public sector pensions	146,135	148,225	2,090
Other employee and veteran future benefits	58,206	59,846	1,640
Other liabilities	6,315	6,850	535
Total pension and other liabilities	210,656	214,921	4,265
Total interest-bearing debt	801,811	842,347	40,536
Total liabilities	920,871	952,676	31,805
Financial assets
Cash and accounts receivable	96,907	105,697	8,790
Foreign exchange accounts	48,507	56,764	8,257
Loans, investments, and advances (net of allowances)1	158,549	155,082	-3,467
Total financial assets	303,963	317,543	13,580
Net debt	616,908	635,133	18,225
Non-financial assets	66,581	65,476	-1,105
Federal debt (accumulated deficit)	550,327	569,657	19,330
(1) February 29, 2012 amount includes $1.9 billion in other comprehensive losses reported by enterprise Crown corporations and other government business enterprises and $3.0 billion in transitional adjustments resulting from the adoption of International Financial Reporting Standards by enterprise Crown corporations and other government business enterprises. Note: Totals may not add due to rounding.

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

For inquiries about this publication, contact Doug Nevison at 613-996-0321.
April 2012