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Highlights

June 2012: budgetary deficit of $1.1 billion

There was a budgetary deficit of $1.1 billion in June 2012, compared to a deficit of $2.3 billion in June 2011.

Revenues increased by $0.8 billion, or 4.2 per cent, largely reflecting increases in personal and corporate income tax revenues. Program expenses decreased by $0.2 billion, or 1.3 per cent, reflecting lower other program expenses, offset in part by higher transfer payments. Public debt charges decreased by $41 million, or 1.6 per cent.

April to June 2012: budgetary deficit of $2.0 billion

For the first three months of the 2012–13 fiscal year, the budgetary deficit stood at $2.0 billion, compared to a deficit of $4.2 billion reported for the same period of 2011–12. 

Revenues were up $2.8 billion, or 4.7 per cent, reflecting higher income tax revenues, excise taxes and duties, and Employment Insurance (EI) premium revenues. Program expenses were up $1.0 billion, or 1.8 per cent, reflecting higher transfer payments. Public debt charges were down $0.4 billion.    

The financial results through the first three months of the fiscal year are broadly consistent with those projected for 2012–13 in Budget 2012. However, recent economic developments suggest that there are downside risks to the fiscal outlook. An update of the economic and fiscal outlook for this year and beyond will be provided in the fall in the Update of Economic and Fiscal Projections.

 

June 2012

There was a budgetary deficit of $1.1 billion in June 2012, compared to a deficit of $2.3 billion in June 2011.

Revenues increased by $0.8 billion, or 4.2 per cent, to $20.5 billion.

  • Personal income tax revenues were up $0.8 billion, or 8.4 per cent.
  • Corporate income tax revenues were up $0.2 billion, or 9.1 per cent.
  • Non-resident income tax revenues were down $0.1 billion, or 30.3 per cent.
  • Excise taxes and duties were down $15 million, or 0.4 per cent. Goods and Services Tax (GST) revenues were up $20 million, or 0.9 per cent. Energy taxes were up $8 million, customs import duties were down $29 million, and other excise taxes and duties were down $14 million. 
  • EI premium revenues were up $0.1 billion, or 7.7 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 down $0.2 billion, or 8.2 per cent. 

Program expenses in June 2012 were $19.1 billion, down $0.2 billion, or 1.3 per cent, from June 2011. This decrease reflects lower other program expenses, offset in part by higher transfer payments.      

Transfer payments increased by $0.4 billion, or 2.9 per cent.

  • Major transfers to persons, consisting of elderly, EI and children’s benefits, increased by $0.1 billion, or 1.5 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 9.0 per cent. Children’s benefits, which consist of the Canada Child Tax Benefit and the Universal Child Care Benefit, decreased by $20 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 $0.3 billion, or 6.4 per cent, primarily reflecting legislated growth in transfers as well as increased transfers to Canada’s cities and communities.
  • Other transfer payments were down $42 million, or 1.8 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 decreased by $0.6 billion, or 10.0 per cent, from the previous year.  

Public debt charges decreased by $41 million, or 1.6 per cent. 

April to June 2012

For the first three months of the 2012–13 fiscal year, there was a budgetary deficit of $2.0 billion, compared to a deficit of $4.2 billion reported for the same period of 2011–12. 

Revenues increased by $2.8 billion, or 4.7 per cent, to $62.7 billion.

  • Personal income tax revenues were up $1.3 billion, or 4.4 per cent. 
  • Corporate income tax revenues were up $0.7 billion, or 9.2 per cent, reflecting a decrease in receipts of about 0.7 per cent and a 24.0-per-cent decrease in refunds of taxes paid.
  • Non-resident income tax revenues were down $0.1 billion, or 5.8 per cent. 
  • Excise taxes and duties were up $0.6 billion, or 5.9 per cent, largely reflecting an increase in GST revenues of about $0.5 billion, or 6.7 per cent. Energy taxes were up $21 million, customs import duties were up $0.1 billion, and other excise taxes and duties increased by $22 million. 
  • EI premium revenues were up $0.4 billion, or 7.2 per cent, reflecting growth in insurable earnings and the 2012 premium rate of $1.83 per $100 of insurable earnings.
  • Other revenues were down $0.1 billion, or 1.0 per cent.

For the April to June 2012 period, program expenses were $56.8 billion, up $1.0 billion, or 1.8 per cent, from the same period the previous year. 

Transfer payments increased by $1.3 billion, or 3.4 per cent.

  • Major transfers to persons were up $0.4 billion, or 2.3 per cent. Elderly benefits increased by $0.7 billion, or 7.2 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 $0.3 billion, or 6.2 per cent. Children’s benefits were up $5 million, or 0.2 per cent.  
  • Major transfers to other levels of government were up $0.7 billion, or 5.1 per cent, mainly reflecting legislated growth in transfers as well as increased transfers to Canada’s cities and communities.  
  • Other transfer payments were up $0.2 billion, or 2.6 per cent. 

Other program expenses decreased by $0.3 billion, or 1.7 per cent. 

Public debt charges decreased by $0.4 billion, or 5.2 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.  

Revenues: April to June 2012
Revenues $billions
EI premiums 6.0
Other revenues 7.2
Corporate income taxes 7.9
Excise taxes and duties 11.0
Personal income taxes 30.6
Total 62.7
Expenses: April to June 2012
Expenses $billions
Other transfer payments 7.0
Public debt charges 7.8
Major transfers to other levels of gov't 15.2
Major transfers to persons 17.4
Other program expenses 17.2
Total 64.7

Financial requirement of $12.1 billion for April to June 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 $2.0 billion and a requirement of $10.1 billion from non-budgetary transactions, there was a financial requirement of $12.1 billion for the April to June 2012 period, compared to a financial requirement of $15.8 billion for the same period the previous year. 

Net financing activities up $14.7 billion

The Government financed this financial requirement of $12.1 billion and increased cash balances by $2.6 billion by increasing market debt by $14.7 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 June 2012 stood at $16.0 billion, up $8.6 billion from their level at the end of June 2011. 
 
Table 1
Summary statement of transactions
$ millions
  June April to June
 

  20111 2012 2011–121 2012–13
Budgetary transactions
  Revenues 19,660 20,493 59,837 62,678
  Expenses
    Program expenses -19,313 -19,070 -55,822 -56,827
    Public debt charges -2,610 -2,569 -8,259 -7,829
 

  Budgetary balance (deficit/surplus)  -2,263 -1,146 -4,244 -1,978
Non-budgetary transactions -3,405 -1,717 -11,514 -10,124
 

Financial source/requirement -5,668 -2,863 -15,758 -12,102
Net change in financing activities -6,840 -7,853 12,959 14,740
 

Net change in cash balances -12,508 -10,716 -2,799 2,638
Cash balance at end of period 7,355 15,968
Note: Positive numbers indicate net source of funds. Negative numbers indicate net requirement for funds.
1 Comparative figures have been restated to reflect changes in accounting policy in 2012–13.

 

 
Table 2
Revenues
  June    April to June  
 
 
 
  2011
($ millions)
2012
($ millions)
 Change
 (%)
2011–12
($ millions)
2012–13
($ millions)
 Change
(%)
Tax revenues
  Income taxes
    Personal income tax1 9,344 10,130 8.4 29,305 30,603 4.4
    Corporate income tax2 2,693 2,938 9.1 7,221 7,887 9.2
    Non-resident income tax 469 327 -30.3 1,259 1,186 -5.8
 

    Total income tax 12,506 13,395 7.1 37,785 39,676 5.0
  Excise taxes and duties
    Goods and Services Tax3 2,132 2,152 0.9 6,979 7,449 6.7
    Energy taxes 410 418 2.0 1,236 1,257 1.7
    Customs import duties 333 304 -8.7 851 949 11.5
    Other excise taxes and duties 462 448 -3.0 1,309 1,331 1.7
 

    Total excise taxes and duties 3,337 3,322 -0.4 10,375 10,986 5.9
 

  Total tax revenues 15,843 16,717 5.5 48,160 50,662 5.2
Employment Insurance premiums 1,712 1,843 7.7 5,557 5,955 7.2
Other revenues 2,105 1,933 -8.2 6,120 6,061 -1.0
 

Total revenues 19,660 20,493 4.2 59,837 62,678 4.7
Note: Totals may not add due to rounding.
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 Investment 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.

 

 
Table 3
Expenses
  June    April to June  
 
 
 
  2011
($ millions)
2012
($ millions)
 Change
(%)
2011–12
($ millions)
2012–13
($ millions)
 Change
(%)
Transfer payments
  Major transfers to persons
    Elderly benefits 3,095 3,315 7.1 9,222 9,885 7.2
    Employment Insurance benefits 1,297 1,180 -9.0 4,557 4,273 -6.2
    Children's benefits 1,066 1,046 -1.9 3,254 3,259 0.2
 

    Total 5,458 5,541 1.5 17,033 17,417 2.3
  Major transfers to other levels
   of government
    Support for health and other
     social programs
      Canada Health Transfer 2,266 2,402 6.0 6,800 7,205 6.0
      Canada Social Transfer 960 988 2.9 2,879 2,965 3.0
 

      Total 3,226 3,390 5.1 9,679 10,170 5.1
    Fiscal transfers1 1,462 1,497 2.4 4,906 5,064 3.2
    Canada's cities and communities 873 1,035 18.6 873 1,035 18.6
    Quebec Abatement1 -320 -343 7.2 -960 -1,030 7.3
 

    Total 5,241 5,579 6.4 14,498 15,239 5.1
  Other transfer payments
    Aboriginal Affairs and
     Northern Development 
368 486 32.1 1,497 1,650 10.2
    Agriculture and Agri-Food 64 88 37.5 183 219 19.7
    Foreign Affairs and
     International Trade
187 115 -38.5 619 629 1.6
    Health 160 181 13.1 634 674 6.3
    Human Resources and
     Skills Development
432 408 -5.6 770 947 23.0
    Industry 139 215 54.7 430 437 1.6
    Other2 1,031 846 -17.9 2,701 2,455 -9.1
 

    Total 2,381 2,339 -1.8 6,834 7,011 2.6
 

  Total transfer payments 13,080 13,459 2.9 38,365 39,667 3.4
Other program expenses
  Crown corporations 761 672 -11.7 2,527 2,473 -2.1
  Defence 1,673 1,433 -14.3 4,358 4,275 -1.9
  All other departments
   and agencies
3,799 3,506 -7.7 10,572 10,412 -1.5
 

  Total other program expenses 6,233 5,611 -10.0 17,457 17,160 -1.7
 

Total program expenses 19,313 19,070 -1.3 55,822 56,827 1.8
Public debt charges 2,610 2,569 -1.6 8,259 7,829 -5.2
 

Total expenses 21,923 21,639 -1.3 64,081 64,656 0.9
Note: Totals may not add due to rounding.
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 Investment Tax Credit for Canadian-Controlled Private Corporations and the refundable portion of the Atlantic Investment Tax Credit as transfer payments.

 

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

  2011 2012 2011–12 2012–13
Budgetary balance (deficit/surplus) -2,263 -1,146 -4,244 -1,978
Non-budgetary transactions
  Capital investment activities -175 -363 -243 40
  Other investing activities 685 -520 656 -1,345
  Pension and other accounts 365 459 1,260 536
  Other activities    
    Accounts payable, receivables, accruals and allowances1 -6,196 -4,826 -13,328 -12,688
    Foreign exchange activities 1,546 3,202 -925 2,314
    Amortization of tangible capital assets 370 331 1,066 1,019
 

    Total other activities -4,280 -1,293 -13,187 -9,355
 

  Total non-budgetary transactions -3,405 -1,717 -11,514 -10,124
 

Financial source/requirement -5,668 -2,863 -15,758 -12,102

Note: Totals may not add due to rounding.
1 Comparative figures have been restated to reflect a change in methodology for reporting monthly Goods and Services Tax revenues.

 

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

  2011 2012 2011–12 2012–13
Financial source/requirement -5,668 -2,863 -15,758 -12,102
Net increase (+)/decrease (-) in financing activities
Unmatured debt transactions
  Canadian currency borrowings
    Marketable bonds -10,298 -8,194 7,941 2,789
    Treasury bills 3,200 -200 4,400 9,800
    Retail debt -49 -28 -182 -117
    Other -5 -4 -13 -8
 

    Total -7,152 -8,426 12,146 12,464
  Foreign currency borrowings 57 -230 385 338
 

  Total -7,095 -8,656 12,531 12,802
  Cross-currency swap revaluation 324 268 521 917
  Unamortized discounts and premiums on market debt -57 548 -39 1,076
  Obligations related to capital leases and other unmatured debt -12 -13 -54 -55
 

 Net change in financing activities -6,840 -7,853 12,959 14,740
Change in cash balance -12,508 -10,716 -2,799 2,638
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.
August 2012