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Archived - The Fiscal Monitor
A publication of the Department of finance

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Highlights

March 2012: budgetary deficit of $9.0 billion

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

Revenues increased by $1.6 billion, or 6.8 per cent, reflecting increases in personal income tax revenues and other revenues. Program expenses were up $4.3 billion, or 16.3 per cent, primarily reflecting increases in major transfers to other levels of government and other program expenses. Public debt charges increased by $0.1 billion.

April 2011 to March 2012: budgetary deficit of $23.5 billion

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

Revenues were up $11.4 billion, or 4.9 per cent, primarily reflecting higher income tax revenues, which were partially offset by lower Goods and Services Tax (GST) revenues. Program expenses were up $0.4 billion, or 0.2 per cent. Public debt charges were up $0.1 billion.

The April 2011 to March 2012 monthly results are not the final results for the year as a whole. The final results will also reflect end-of-year adjustments that will be made once further information becomes available, including the accrual of tax revenues reflecting assessments of tax returns and valuation adjustments for assets and liabilities. Overall, the results to date are in line with the deficit of $24.9 billion projected for 2011–12 in the March 29, 2012 budget.

The Government will release the final audited outcome for 2011–12 in the Annual Financial Report of the Government of Canada in the fall.

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.

Revenues: April to March 2012
Revenues $billions
EI premiums 18.7
Corporate income taxes 31.5
Other revenues 31.6
Excise taxes and duties 40.3
Personal income taxes 122.5
Total 244.5
Expenses: April to March 2012
Expenses $billions
Other transfer payments 30.8
Public debt charges 31.0
Major transfers to other levels of gov't 56.8
Major transfers to persons 69.0
Other program expenses 80.5
Total 268.0

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