April and May 2012 budgetary results

There was a budgetary deficit of $0.8 billion in the April to May 2012 period, compared to a $2.0-billion deficit for the same period in the previous year.

Revenues increased by $2.0 billion, or 5.0 per cent, to $42.2 billion.

• Personal income tax revenues were up $0.5 billion, or 2.6 per cent.
• Corporate income tax revenues were up $0.4 billion, or 9.3 per cent.
• Non-resident income tax revenues were up $0.1 billion, or 8.7 per cent.
• Excise taxes and duties were up $0.6 billion, or 8.9 per cent. GST revenues were up $0.5 billion, or 9.3 per cent. Energy taxes were up $13 million, customs import duties were up $0.1 billion, and other excise taxes and duties were up $36 million.
• EI premium revenues were up $0.3 billion, or 6.9 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 $0.1 billion, or 2.8 per cent.

Total program expenses in the April to May 2012 period were $37.8 billion, up $1.2 billion, or 3.4 per cent, from the prior year. This increase mainly reflects higher transfer payments.

Transfer payments increased by $0.9 billion, or 3.7 per cent.

• Major transfers to persons, consisting of elderly benefits, EI benefits and children's benefits, increased by $0.3 billion, or 2.6 per cent. Elderly benefits increased by $0.4 billion, or 7.2 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 $0.2 billion, or 5.1 per cent. Children's benefits, which consist of the Canada Child Tax Benefit and the Universal Child Care Benefit, increased by $25 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 $0.4 billion, or 4.4 per cent, primarily reflecting legislated growth in transfers.
• Other transfer payments were up $0.2 billion, or 4.9 per cent, from the prior year.

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 $0.3 billion, or 2.9 per cent, from the prior year.

Public debt charges decreased by $0.4 billion, or 6.9 per cent, reflecting lower Consumer Price Index adjustments on real return bonds and a lower effective interest rate on the stock of interest-bearing debt.

Financial requirement of $9.2 billion for April and May 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 $0.8 billion and a requirement of $8.4 billion from non-budgetary transactions, there was a financial requirement of $9.2 billion for the April to May 2012 period, compared to a financial requirement of $10.1 billion from the same period the previous year.

Net financing activities up $22.6 billion

The government financed this financial requirement of $9.2 billion and increased cash balances by $13.4 billion by increasing market debt by $22.6 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 May 2012 stood at $26.7 billion, up $6.8 billion from their level at the end of May 2011.

Table 1
Summary statement of transactions

	April		May		April to May
	20111	2012	20111	2012	2011-121	2012-13
	($ millions)
Budgetary transactions
Revenues	21,477	21,661	18,700	20,524	40,177	42,185
Expenses
Program expenses	-18,082	-19,056	-18,427	-18,701	-36,509	-37,757
Public debt charges	-2,649	-2,624	-3,000	-2,636	-5,649	-5,260
Budgetary balance (deficit/surplus)	746	-19	-2,727	-813	-1,981	-832
Non-budgetary transactions	-8,760	-3,340	651	-5,067	-8,109	-8,407
Financial source/requirement	-8,014	-3,359	-2,076	-5,880	-10,090	-9,239
Net change in financing activities	4,601	4,445	15,198	18,148	19,799	22,593
Net change in cash balances	-3,413	1,086	13,122	12,268	9,709	13,354
Cash balance at end of period					19,860	26,687
(1) Comparative figures have been restated to reflect changes in accounting policy in 2012-13. Note: Positive numbers indicate net source of funds. Negative numbers indicate net requirement for funds.

 

Table 2
Revenues

	April		May		April to May
	2011	2012	2011	2012	2011–12	2012–13	Change
	($ millions)						(%)
Tax revenues
Income taxes
Personal income tax1	11,306	11,188	8,655	9,285	19,961	20,473	2.6
Corporate income tax2	2,021	2,303	2,507	2,646	4,528	4,949	9.3
Non-resident income tax	459	408	331	451	790	859	8.7
Total income tax	13,786	13,899	11,493	12,382	25,279	26,281	4.0
Excise taxes and duties
Goods and Services Tax3	2,624	2,584	2,223	2,713	4,847	5,297	9.3
Energy taxes	392	401	434	438	826	839	1.6
Customs import duties	273	337	245	308	518	645	24.5
Other excise taxes and duties	437	365	410	518	847	883	4.3
Total excise taxes and duties	3,726	3,687	3,312	3,977	7,038	7,664	8.9
Total tax revenues	17,512	17,586	14,805	16,359	32,317	33,945	5.0
Employment Insurance premiums	1,989	2,113	1,856	1,999	3,845	4,112	6.9
Other revenues	1,976	1,962	2,039	2,166	4,015	4,128	2.8
Total revenues	21,477	21,661	18,700	20,524	40,177	42,185	5.0
(1) Comparative figures have been restated to reflect the reclassification of the Working Income Tax Benefit and the Refundable Medical Expense Supplement as transfer payments.
(2) Comparative figures have been restated to reflect the reclassification of the Canadian Film or Video Production Tax Credit, the Film or Video Production Services Tax Credit, the Scientific Research and Experimental Development Tax Credit for Canadian-Controlled Private Corporations and the refundable portion of the Atlantic Investment Tax Credit as transfer payments.
(3) Comparative figures have been restated to reflect a change in methodology for reporting monthly Goods and Services Tax revenues.
Note: Totals may not add due to rounding.

 

Table 3
Expenses

	April		May		April to May
	2011	2012	2011	2012	2011–12	2012–13	Change
	($ millions)						(%)
Transfer payments
Major transfers to persons
Elderly benefits	3,054	3,275	3,073	3,295	6,127	6,570	7.2
Employment Insurance benefits	1,507	1,691	1,753	1,402	3,260	3,093	-5.1
Children’s benefits	1,066	1,053	1,122	1,160	2,188	2,213	1.1
Total	5,627	6,019	5,948	5,857	11,575	11,876	2.6
Major transfers to other levels    of government
Support for health and other      social programs
Canada Health Transfer	2,267	2,402	2,267	2,401	4,534	4,803	5.9
Canada Social Transfer	960	988	959	989	1,919	1,977	3.0
Total	3,227	3,390	3,226	3,390	6,453	6,780	5.1
Fiscal transfers1	1,722	1,784	1,722	1,783	3,444	3,567	3.6
Canada’s cities and      communities	0	0	0	0	0	0	n/a
Quebec Abatement1	-320	-343	-320	-344	-640	-687	7.3
Total	4,629	4,831	4,628	4,829	9,257	9,660	4.4
Other transfer payments
Aboriginal Affairs and Northern      Development	800	796	329	368	1,129	1,164	3.1
Agriculture and Agri-Food	55	62	64	69	119	131	10.1
Foreign Affairs and      International Trade	244	430	188	84	432	514	19.0
Health	179	230	295	263	474	493	4.0
Human Resources and Skills      Development	156	196	182	343	338	539	59.5
Industry	236	163	55	59	291	222	-23.7
Other2	874	908	796	701	1,670	1,609	-3.7
Total	2,544	2,785	1,909	1,887	4,453	4,672	4.9
Total transfer payments	12,800	13,635	12,485	12,573	25,285	26,208	3.7
Other program expenses
Crown corporations	827	1,042	939	759	1,766	1,801	2.0
Defence	1,238	1,182	1,447	1,660	2,685	2,842	5.8
All other departments    and agencies	3,217	3,197	3,556	3,709	6,773	6,906	2.0
Total other program expenses	5,282	5,421	5,942	6,128	11,224	11,549	2.9
Total program expenses	18,082	19,056	18,427	18,701	36,509	37,757	3.4
Public debt charges	2,649	2,624	3,000	2,636	5,649	5,260	-6.9
Total expenses	20,731	21,680	21,427	21,337	42,158	43,017	2.0
(1) Comparative figures have been restated to reflect the reclassification of Alternative Payments for Standing Programs and the Youth Allowance Recovery as the Quebec Abatement.
(2) Comparative figures have been restated to reflect the reclassification of the Working Income Tax Benefit, the Refundable Medical Expense Supplement, the Canadian Film or Video Production Tax Credit, the Film or Video Production Services Tax Credit, the Scientific Research and Experimental Development Tax Credit for Canadian-Controlled Private Corporations and the refundable portion of the Atlantic Investment Tax Credit as transfer payments.
Note: Totals may not add due to rounding.

 

Table 4
The budgetary balance and financial source/requirement

	April		May		April to May
	2011	2012	2011	2012	2011–12	2012–13
	($ millions)
Budgetary balance (deficit/surplus)	746	-19	-2,727	-813	-1,981	-832
Non-budgetary transactions
Capital investing activities	235	377	-303	26	-68	403
Other investing activities	-158	-360	129	-465	-29	-825
Pension and other accounts	455	31	440	46	895	77
Other activities
Accounts payable, receivables,      accruals and allowances(1)	-8,998	-4,466	1,866	-3,396	-7,132	-7,862
Foreign exchange activities	-646	743	-1,825	-1,631	-2,471	-888
Amortization of tangible capital assets	352	335	344	353	696	688
Total other activities	-9,292	-3,388	385	-4,674	-8,907	-8,062
Total non-budgetary transactions	-8,760	-3,340	651	-5,067	-8,109	-8,407
Financial source/requirement	-8,014	-3,359	-2,076	-5,880	-10,090	-9,239
(1) Comparative figures have been restated to reflect a change in methodology for reporting monthly Goods and Services Tax revenues.
Note: Totals may not add due to rounding.

 

Table 5
Financial source/requirement and net financing activities

	April		May		April to May
	2011	2012	2011	2012	2011–12	2012–13
	($ millions)
Financial source/requirement	-8,014	-3,359	-2,076	-5,880	-10,090	-9,239
Net increase (+)/decrease (-)  in financing activities
Unmatured debt transactions
Canadian currency borrowings
Marketable bonds	4,457	3,370	13,782	7,613	18,239	10,983
Treasury bills	500	1,500	700	8,500	1,200	10,000
Retail debt	-106	-96	-27	7	-133	-89
Other	-4	0	-4	-4	-8	-4
Total	4,847	4,774	14,451	16,116	19,298	20,890
Foreign currency borrowings	26	-72	302	640	328	568
Total	4,873	4,702	14,753	16,756	19,626	21,458
Cross-currency swap revaluation	-318	-356	515	1,005	197	649
Unamortized discounts and premiums on market debt	76	130	-58	398	18	528
Obligations related to capital leases and other unmatured debt	-30	-31	-12	-11	-42	-42
Net change in financing activities	4,601	4,445	15,198	18,148	19,799	22,593
Change in cash balance	-3,413	1,086	13,122	12,268	9,709	13,354
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.
July 2012