March 2012

There was a budgetary deficit of $9.0 billion in March 2012, compared to a $6.2-billion deficit in March 2011.

Revenues increased by $1.6 billion, or 6.8 per cent, to $24.4 billion.

• Personal income tax revenues were up $1.1 billion, or 10.5 per cent.
• Corporate income tax revenues were down $0.4 billion, or 8.4 per cent.
• Non-resident income tax revenues were up $0.1 billion, or 41.7 per cent.
• Excise taxes and duties were down $0.4 billion, or 11.7 per cent. GST revenues were down $0.4 billion, or 17.7 per cent. Energy taxes were up $5 million, customs import duties were down $0.1 billion, and other excise taxes and duties were up $0.1 billion.
• Employment Insurance (EI) premium revenues were up $0.2 billion, or 8.9 per cent, consistent with the 2012 premium rate of $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 up $1.0 billion, or 42.8 per cent.

Program expenses in March 2012 totalled $30.8 billion, up $4.3 billion, or 16.3 per cent, from March 2011. Program expenses include transfer payments and other program expenses.

Transfer payments increased by $2.5 billion, or 15.6 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 7.1 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 changes in consumer prices, 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 $12 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 $2.7 billion, or 64.4 per cent, primarily reflecting $2.2 billion in federal assistance to Quebec for sales tax harmonization as well as legislated growth in transfers.
• Other transfer payments were down $0.2 billion, or 4.0 per cent.

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 increased by $1.8 billion, or 17.4 per cent, reflecting in part the recording of a liability for estimated workforce adjustment costs associated with departmental spending reductions announced in the March 29, 2012 budget.

Public debt charges increased by $0.1 billion, or 2.8 per cent.

April 2011 to March 2012

For the April 2011 to March 2012 period, there was a budgetary deficit of $23.5 billion, compared to a deficit of $34.4 billion reported during the same period of 2010–11.

Revenues increased by $11.4 billion, or 4.9 per cent, to $244.5 billion.

• Personal income tax revenues were up $8.2 billion, or 7.2 per cent.
• Corporate income tax revenues were up $2.6 billion, or 8.9 per cent, reflecting an increase in receipts of about 2.9 per cent and a decrease of 10.0 per cent in refunds of taxes paid.
• Non-resident income tax revenues were up $0.2 billion, or 4.5 per cent.
• Excise taxes and duties were down $0.7 billion, or 1.8 per cent, largely reflecting a decrease in GST revenues of about $1.0 billion, or 3.8 per cent. Energy taxes were up $9 million, customs import duties were up $0.3 billion, and other excise taxes and duties were down $11 million.
• EI premium revenues were up $1.0 billion, or 5.8 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 up $0.1 billion, or 0.5 per cent.

For the April 2011 to March 2012 period, program expenses were $237.0 billion, up $0.4 billion, or 0.2 per cent, from the same period the previous year.

Transfer payments decreased by $1.6 billion, or 1.0 per cent.

• Major transfers to persons were up $0.4 billion, or 0.6 per cent. Elderly benefits increased by $2.4 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 changes in consumer prices, to which benefits are fully indexed. EI benefit payments decreased by $2.2 billion, or 10.8 per cent, reflecting a decrease in regular benefits. Children’s benefits were up $0.2 billion, or 1.2 per cent.
• Major transfers to other levels of government were up $4.0 billion, or 7.6 per cent, reflecting legislated growth in transfers and transfer protection payments to provinces, $2.2 billion in federal assistance to Quebec for sales tax harmonization, and 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 $6.1 billion, or 16.5 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 $2.0 billion, or 2.5 per cent, from the previous year’s level, reflecting in part the recording of a liability for estimated workforce adjustment costs.

Public debt charges increased by $0.1 billion, or 0.4 per cent.

Financial requirement of $31.9 billion for April 2011 to March 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 $23.5 billion and a requirement of $8.4 billion from non-budgetary transactions, there was a financial requirement of $31.9 billion for the April 2011 to March 2012 period, compared to a financial requirement of $47.2 billion for the same period the previous year.

Net financing activities up $35.1 billion

The Government financed this financial requirement of $31.9 billion and increased cash balances by $3.2 billion by increasing market debt by $35.1 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 March 2012 stood at $13.3 billion, up $3.2 billion from their level at the end of March 2011.

Table 1
Summary statement of transactions
$ millions

	March		April to March
	2011	2012	2010–11	2011–12
Budgetary transactions
Revenues	22,881	24,435	233,133	244,517
Expenses
Program expenses	-26,500	-30,829	-236,682	-237,040
Public debt charges	-2,562	-2,635	-30,892	-31,005
Budgetary balance (deficit/surplus)	-6,181	-9,029	-34,441	-23,528
Non-budgetary transactions	5,801	9,027	-12,746	-8,419
Financial source/requirement	-380	-2	-47,187	-31,947
Net change in financing activities	5,671	-1,165	31,719	35,106
Net change in cash balances	5,291	-1,167	-15,468	3,159
Cash balance at end of period			10,157	13,313
Note: Positive numbers indicate net source of funds. Negative numbers indicate net requirement for funds.

 

Table 2
Revenues

	March			April to March
	2011 ($ millions)	2012 ($ millions)	Change  (%)	2010–11 ($ millions)	2011–12 ($ millions)	Change (%)
Tax revenues
Income taxes
Personal income tax	10,416	11,511	10.5	114,289	122,463	7.2
Corporate income tax	4,686	4,292	-8.4	28,965	31,534	8.9
Non-resident income tax	199	282	41.7	4,959	5,183	4.5
Total income tax	15,301	16,085	5.1	148,213	159,180	7.4
Excise taxes and duties
Goods and Services Tax	2,094	1,723	-17.7	26,649	25,645	-3.8
Energy taxes	413	418	1.2	5,312	5,321	0.2
Customs import duties	377	282	-25.2	3,561	3,826	7.4
Other excise taxes and duties	407	484	18.9	5,493	5,482	-0.2
Total excise taxes and duties	3,291	2,907	-11.7	41,015	40,274	-1.8
Total tax revenues	18,592	18,992	2.2	189,228	199,454	5.4
Employment Insurance premiums	2,007	2,185	8.9	17,671	18,689	5.8
Other revenues	2,282	3,258	42.8	26,234	26,374	0.5
Total revenues	22,881	24,435	6.8	233,133	244,517	4.9
Note: Totals may not add due to rounding.

 

Table 3
Expenses

	March			April to March
	2011 ($ millions)	2012 ($ millions)	Change (%)	2010–11 ($ millions)	2011–12 ($ millions)	Change (%)
Transfer payments
Major transfers to persons
Elderly benefits	3,054	3,272	7.1	35,726	38,167	6.8
Employment Insurance benefits	1,702	1,590	-6.6	20,002	17,843	-10.8
Children's benefits	1,099	1,111	1.1	12,785	12,941	1.2
Total	5,855	5,973	2.0	68,513	68,951	0.6
Major transfers to other levels    of government
Support for health and other      social programs
Canada Health Transfer	2,147	2,267	5.6	26,032	27,174	4.4
Canada Social Transfer	932	959	2.9	11,179	11,514	3.0
Total	3,079	3,226	4.8	37,211	38,688	4.0
Fiscal transfers1	1,380	3,780	173.9	17,578	19,829	12.8
Canada's cities and communities	24	128	433.3	1,751	2,206	26.0
Quebec Abatement1,2	-354	-345	-2.5	-3,751	-3,929	4.7
Total	4,129	6,789	64.4	52,789	56,794	7.6
Other transfer payments
Aboriginal Affairs and      Northern Development	927	765	-17.5	5,846	5,750	-1.6
Agriculture and Agri-Food	166	168	1.2	1,978	1,706	-13.8
Foreign Affairs and      International Trade	1,258	1,273	1.2	4,216	4,116	-2.4
Health	342	353	3.2	2,619	2,647	1.1
Human Resources and      Skills Development	584	609	4.3	3,900	3,633	-6.8
Industry	392	305	-22.2	3,379	2,488	-26.4
Other	2,511	2,458	-2.1	14,956	10,483	-29.9
Total	6,180	5,931	-4.0	36,894	30,823	-16.5
Total transfer payments	16,164	18,693	15.6	158,196	156,568	-1.0
Other program expenses
Crown corporations	1,086	1,188	9.4	10,817	10,248	-5.3
Defence	2,464	3,828	55.4	19,719	22,510	14.2
All other departments    and agencies	6,786	7,120	4.9	47,950	47,714	-0.5
Total other program expenses	10,336	12,136	17.4	78,486	80,472	2.5
Total program expenses	26,500	30,829	16.3	236,682	237,040	0.2
Public debt charges	2,562	2,635	2.8	30,892	31,005	0.4
Total expenses	29,062	33,464	15.1	267,574	268,045	0.2
(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

	March		April to March
	2011	2012	2010–11	2011–12
Budgetary balance (deficit/surplus)	-6,181	-9,029	-34,441	-23,528
Non-budgetary transactions
Capital investment activities	-692	-617	-5,049	-3,311
Other investing activities	-504	465	-2,922	-899
Pension and other accounts	-168	137	4,970	4,402
Other activities
Accounts payable, receivables, accruals and allowances	8,304	9,518	-11,529	-3,677
Foreign exchange activities	-332	-233	-1,557	-8,490
Amortization of tangible capital assets	-807	-243	3,341	3,556
Total other activities	7,165	9,042	-9,745	-8,611
Total non-budgetary transactions	5,801	9,027	-12,746	-8,419
Financial source/requirement	-380	-2	-47,187	-31,947
Note: Totals may not add due to rounding.

 

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

	March		April to March
	2011	2012	2010–11	2011–12
Financial source/requirement	-380	-2	-47,187	-31,947
Net increase (+)/decrease (-) in financing activities
Unmatured debt transactions
Canadian currency borrowings
Marketable bonds	6,119	-4,489	47,823	31,932
Treasury bills	-600	3,100	-12,900	400
Retail debt	-2	-116	-1,754	-1,269
Other	0	0	-425	-16
Total	5,517	-1,505	32,744	31,047
Foreign currency borrowings	-65	-119	-614	3,088
Total	5,452	-1,624	32,130	34,135
Cross-currency swap revaluation	493	373	-857	643
Unamortized discounts and premiums on market debt	-228	-107	607	207
Obligations related to capital leases and other unmatured debt	-46	193	-161	121
Net change in financing activities	5,671	-1,165	31,719	35,106
Change in cash balance	5,291	-1,167	-15,468	3,159
Note: Totals may not add due to rounding.

 

Table 6
Condensed statement of assets and liabilities
$ millions

	March 31, 2011	March 31, 2012	Change
Liabilities
Accounts payable and accrued liabilities	119,060	117,100	-1,960
Interest-bearing debt
Unmatured debt
Payable in Canadian currency
Marketable bonds	416,080	448,012	31,932
Treasury bills	162,980	163,380	400
Retail debt	10,141	8,872	-1,269
Other	27	11	-16
Subtotal	589,228	620,275	31,047
Payable in foreign currencies	7,628	10,716	3,088
Cross-currency swap revaluation	-5,091	-4,448	643
Unamortized discounts and premiums on market debt	-4,485	-4,278	207
Obligations related to capital leases        and other unmatured debt	3,875	3,996	121
Total unmatured debt	591,155	626,261	35,106
Pension and other liabilities
Public sector pensions	146,135	148,201	2,066
Other employee and veteran future benefits	58,206	60,068	1,862
Other liabilities	6,315	6,789	474
Total pension and other liabilities	210,656	215,058	4,402
Total interest-bearing debt	801,811	841,319	39,508
Total liabilities	920,871	958,419	37,548
Financial assets
Cash and accounts receivable	96,907	101,783	4,876
Foreign exchange accounts	48,507	56,997	8,490
Loans, investments, and advances (net of allowances)1	158,549	154,831	-3,718
Total financial assets	303,963	313,611	9,648
Net debt	616,908	644,808	27,900
Non-financial assets	66,581	66,336	-245
Federal debt (accumulated deficit)	550,327	578,472	28,145
(1) March 31, 2012 amount includes $1.7 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 Brian Pagan at 613-995-6391.
May 2012