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.  

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