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Highlights

February 2012: budgetary surplus of $1.5 billion

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

Revenues increased by $1.1 billion, or 5.2 per cent, reflecting increases in most revenue streams. Program expenses were down $0.7 billion, or 3.6 per cent, primarily reflecting a decrease in operating expenses. Public debt charges decreased by $0.3 billion.

April 2011 to February 2012: budgetary deficit of $14.5 billion

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

Revenues were up $9.8 billion, or 4.7 per cent, primarily reflecting higher income tax revenues, which were partially offset by lower Goods and Services Tax (GST) revenues and other revenues. Program expenses were down $4.0 billion, or 1.9 per cent. Public debt charges were up $40 million.     

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.       

Revenues: April to February 2012
Revenues $billions
EI premiums 16.5
Corporate income taxes 27.2
Other revenues 28.0
Excise taxes and duties 37.4
Personal income taxes 111.0
Total 220.1
Expenses: April to February 2012
Expenses $billions
Other transfer payments 24.9
Public debt charges 28.4
Major transfers to other levels of gov't 50.0
Major transfers to persons 63.0
Other program expenses 68.3
Total 234.6

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