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

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Highlights

September 2012: budgetary deficit of $2.7 billion

There was a budgetary deficit of $2.7 billion in September 2012, compared to a deficit of $2.7 billion in September 2011.

Revenues decreased by $25 million, or 0.1 per cent, largely reflecting decreases in excise taxes, duties and other revenues, offset in part by higher income tax revenues. Program expenses increased by $0.1 billion, or 0.6 per cent, as increases in major transfers to persons and other levels of government were largely offset by a decrease in direct program expenses. Public debt charges decreased by $0.2 billion, or 7.6 per cent.  

April to September 2012: budgetary deficit of $8.9 billion

For the first six months of the 2012–13 fiscal year, the budgetary deficit stood at $8.9 billion, compared to a deficit of $11.8 billion reported in the same period of 2011–12.

Revenues were up $3.3 billion, or 2.8 per cent, reflecting higher income tax revenues, excise taxes and duties, and Employment Insurance (EI) premium revenues. Program expenses were up $1.5 billion, or 1.4 per cent, reflecting increases in major transfers to persons and other levels of government. Public debt charges were down $1.1 billion, or 6.9 per cent.

September 2012

There was a budgetary deficit of $2.7 billion in September 2012, compared to a deficit of $2.7 billion in September 2011.

Revenues decreased by $25 million, or 0.1 per cent, to $18.5 billion.

  • Personal income tax revenues were up $0.2 billion, or 2.5 per cent.
  • Corporate income tax revenues were up $0.1 billion, or 7.7 per cent.
  • Non-resident income tax revenues were down $0.1 billion, or 15.0 per cent.
  • Excise taxes and duties were down $0.3 billion, or 7.7 per cent. Goods and Services Tax (GST) revenues were down $0.1 billion, or 6.4 per cent. Energy taxes were up $1 million, customs import duties were down $40 million, and other excise taxes and duties were down $0.1 billion.
  • EI premium revenues were up $0.1 billion, or 8.5 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 8.7 per cent.

Program expenses in September 2012 were $18.9 billion, up $0.1 billion, or 0.6 per cent, from September 2011.    

  • Major transfers to persons, consisting of elderly, EI and children’s benefits, increased by $0.4 billion, or 6.5 per cent. Elderly benefits increased by $0.2 billion, or 6.0 per cent, due to growth in the elderly population and changes in consumer prices, to which benefits are fully indexed. EI benefit payments increased by $0.2 billion, or 12.4 per cent. Children’s benefits, which consist of the Canada Child Tax Benefit and the Universal Child Care Benefit, increased by $14 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 arrangements and other 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 $0.2 billion, or 4.2 per cent, reflecting legislated growth in the Canada Health Transfer, the Canada Social Transfer, Equalization transfers and transfers to the territories.
  • Direct program expenses include operating expenses of National Defence and other departments, expenses of Crown corporations, and all other transfer payments to individuals and other organizations. Direct program expenses were down $0.4 billion, or 4.9 per cent, from the previous year.
    • Transfer payments were down $0.1 billion, or 3.8 per cent, reflecting decreases across a number of departments.   
    • Other direct program expenses, which include salaries and benefits of federal employees, amortization of facilities and equipment, and supplies, decreased by $0.3 billion, or 5.3 per cent.  

Public debt charges decreased by $0.2 billion, or 7.6 per cent.

April to September 2012

For the first six months of the 2012–13 fiscal year, there was a budgetary deficit of $8.9 billion, compared to a deficit of $11.8 billion reported during the same period of 2011–12.

Revenues increased by $3.3 billion, or 2.8 per cent, to $120.9 billion.

  • Personal income tax revenues were up $2.1 billion, or 3.6 per cent.
  • Corporate income tax revenues were up $0.3 billion, or 2.2 per cent, reflecting a decrease in receipts of about 2.9 per cent and a decrease of 14.4 per cent in refunds of taxes paid.
  • Non-resident income tax revenues were down $17 million, or 0.7 per cent.
  • Excise taxes and duties were up $0.7 billion, or 3.5 per cent, largely reflecting an increase in GST revenues of $0.6 billion, or 4.1 per cent. Energy taxes and customs import duties each increased by $0.1 billion, while other excise taxes and duties increased by $4 million.
  • EI premium revenues were up $0.7 billion, or 7.4 per cent, reflecting growth in insurable earnings and the 2012 premium rate of $1.83 per $100 of insurable earnings.
  • Other revenues were down $0.5 billion, or 3.7 per cent.

For the April to September 2012 period, program expenses were $115.1 billion, up $1.5 billion, or 1.4 per cent, from the same period the previous year.

  • Major transfers to persons were up $1.1 billion, or 3.3 per cent. Elderly benefits increased by $1.2 billion, or 6.5 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 1.6 per cent, and children’s benefits were up $41 million, or 0.6 per cent.  
  • Major transfers to other levels of government were up $0.6 billion, or 2.0 per cent, mainly reflecting legislated growth in the Canada Health Transfer, the Canada Social Transfer, Equalization transfers and transfers to the territories, offset in part by lower transfer protection payments to provinces, lower transfers to Canada’s cities and communities and an increase in recoveries under the Quebec Abatement.  
  • Direct program expenses were down $0.2 billion, or 0.3 per cent.
    • Transfer payments were down $0.9 billion, or 5.5 per cent, reflecting decreases across a number of departments.
    • Other direct program expenses increased by $0.7 billion, or 1.9 per cent, largely reflecting an increase in the accrual cost of employee and veteran future benefits.

Public debt charges decreased by $1.1 billion, or 6.9 per cent, reflecting a lower effective interest rate on the stock of interest-bearing debt.    

Revenues: April to September 2012
Revenues $billions
EI premiums 10.002
Corporate income taxes 13.488
Other revenues 14.238
Excise taxes and duties 22.233
Personal income taxes 60.984
Total 120.945
Expenses: April to September 2012
Expenses $billions
Public debt charges 14.777
Major transfers to other levels of gov’t 29.563
Major transfers to persons 34.868
Direct program expenses 50.622
Total 129.830

Financial requirement of $21.7 billion for April to September 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 $8.9 billion and a requirement of $12.8 billion from non-budgetary transactions, there was a financial requirement of $21.7 billion for the April to September 2012 period, compared to a financial requirement of $30.5 billion for the same period the previous year.

Net financing activities up $26.5 billion

The Government financed this financial requirement of $21.7 billion and increased cash balances by $4.9 billion by increasing market debt by $26.5 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 September 2012 stood at $18.2 billion, up $13.9 billion from their level at the end of September 2011.

 

 
Table 1
Summary statement of transactions
$ millions
  September April to September
 

  20111 2012 2011–121 2012–13
Budgetary transactions
  Revenues 18,530 18,505 117,603 120,945
  Expenses
    Program expenses -18,768 -18,872 -113,512 -115,053
    Public debt charges -2,510 -2,320 -15,864 -14,777
 

  Budgetary balance (deficit/surplus)  -2,748 -2,687 -11,773 -8,885
Non-budgetary transactions -3,021 1,977 -18,746 -12,774
 

Financial source/requirement -5,769 -710 -30,519 -21,659
Net change in financing activities -944 -1,178 24,723 26,544
 

Net change in cash balances -6,713 -1,888 -5,796 4,885
Cash balance at end of period 4,356 18,219
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
  September    April to September  
 
 
 
  2011
($ millions)
2012
($ millions)
 Change
 (%)
2011–12
($ millions)
2012–13
($ millions)
 Change
(%)
Tax revenues
  Income taxes
    Personal income tax1 9,751 9,992 2.5 58,884 60,984 3.6
    Corporate income tax2 1,821 1,961 7.7 13,199 13,488 2.2
    Non-resident income tax 340 289 -15.0 2,269 2,252 -0.7
 

    Total income tax 11,912 12,242 2.8 74,352 76,724 3.2
  Excise taxes and duties
    Goods and Services Tax3 2,028 1,898 -6.4 14,149 14,731 4.1
    Energy taxes 470 471 0.2 2,610 2,663 2.0
    Customs import duties 352 312 -11.4 1,938 2,042 5.4
    Other excise taxes and duties 544 453 -16.7 2,793 2,797 0.1
 

    Total excise taxes and duties 3,394 3,134 -7.7 21,490 22,233 3.5
 

  Total tax revenues 15,306 15,376 0.5 95,842 98,957 3.3
Employment Insurance premiums 1,083 1,175 8.5 9,315 10,002 7.4
Other revenues 2,141 1,954 -8.7 12,446 11,986 -3.7
 

Total revenues 18,530 18,505 -0.1 117,603 120,945 2.8
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, and that portion of the Atlantic Investment Tax Credit and the Scientific Research and Experimental Development Tax Credit that is eligible to be refunded.
3 Comparative figures have been restated to reflect a change in methodology for reporting monthly Goods and Services Tax revenues.
 
Table 3
Expenses
  September    April to September  
 
 
 
  2011
($ millions)
2012
($ millions)
 Change
(%)
2011–12
($ millions)
2012–13
($ millions)
 Change
(%)
Major transfers to persons
  Elderly benefits 3,163 3,353 6.0 18,643 19,863 6.5
  Employment Insurance benefits 1,224 1,376 12.4 8,637 8,498 -1.6
  Children's benefits 1,061 1,075 1.3 6,466 6,507 0.6
 

  Total 5,448 5,804 6.5 33,746 34,868 3.3
Major transfers to other levels
  of government
  Support for health and other
    social programs
    Canada Health Transfer 2,267 2,401 5.9 13,601 14,409 5.9
    Canada Social Transfer 959 989 3.1 5,757 5,930 3.0
 

    Total 3,226 3,390 5.1 19,358 20,339 5.1
  Fiscal arrangements and other transfers 1,463 1,497 2.3 10,279 10,249 -0.3
  Canada's cities and communities 0 0 n/a 1,267 1,035 -18.3
  Quebec Abatement -328 -343 4.6 -1,928 -2,060 6.8
 

  Total 4,361 4,544 4.2 28,976 29,563 2.0
Direct program expenses
  Transfer payments            
    Aboriginal Affairs and
      Northern Development 
369 442 19.8 2,899 2,661 -8.2
    Agriculture and Agri-Food 289 120 -58.5 664 518 -22.0
    Foreign Affairs and
      International Trade
179 131 -26.8 1,306 1,106 -15.3
    Health 248 230 -7.3 1,288 1,293 0.4
    Human Resources and
      Skills Development1
492 683 38.8 2,393 2,847 19.0
    Industry 134 160 19.4 1,061 984 -7.3
    Other2 1,024 865 -15.5 5,888 5,237 -11.1
 

    Total 2,735 2,631 -3.8 15,499 14,646 -5.5
  Other direct program expenses
    Crown corporations1 580 522 -10.0 3,942 3,875 -1.7
    National Defence 1,780 1,632 -8.3 9,552 9,717 1.7
    All other departments
      and agencies
3,864 3,739 -3.2 21,797 22,384 2.7
 

    Total other direct program expenses 6,224 5,893 -5.3 35,291 35,976 1.9
 

  Total direct program expenses 8,959 8,524 -4.9 50,790 50,622 -0.3
 

Total program expenses 18,768 18,872 0.6 113,512 115,053 1.4
Public debt charges 2,510 2,320 -7.6 15,864 14,777 -6.9
 

Total expenses 21,278 21,192 -0.4 129,376 129,830 0.4
Note: Totals may not add due to rounding.
1 Comparative figures have been restated to reflect the reclassification of expenses under Canada Mortgage and Housing Corporation - Minister's Account from Crown corporation expenses to transfer payments for Human Resources and Skills Development.
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, and that portion of the Atlantic Investment Tax Credit and the Scientific Research and Experimental Development Tax Credit that is eligible to be refunded.
 
Table 4
The budgetary balance and financial source/requirement
$ millions
  September  April to September
 

  2011 2012 2011–12 2012–13
Budgetary balance (deficit/surplus) -2,748 -2,687 -11,773 -8,885
Non-budgetary transactions
  Capital investment activities -316 -230 -970 -1,081
  Other investing activities -1,589 -622 -1,228 -2,449
  Pension and other accounts -338 602 1,580 3,282
  Other activities    
    Accounts payable, receivables, accruals and allowances1 1,737 2,634 -15,372 -17,407
    Foreign exchange activities -2,876 -752 -4,976 2,799
    Amortization of tangible capital assets 361 345 2,220 2,082
 

    Total other activities -778 2,227 -18,128 -12,526
 

  Total non-budgetary transactions -3,021 1,977 -18,746 -12,774
 

Financial source/requirement -5,769 -710 -30,519 -21,659
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
  September  April to September
 

  2011 2012 2011–12 2012–13
Financial source/requirement -5,769 -710 -30,519 -21,659
Net increase (+)/decrease (-) in financing activities
  Unmatured debt transactions
    Canadian currency borrowings
      Marketable bonds -7,933 -5,943 10,145 6,109
      Treasury bills 4,500 4,000 11,500 19,800
      Retail debt -19 -19 -280 -192
      Other 0 0 -16 -11
 

      Total -3,452 -1,962 21,349 25,706
    Foreign currency borrowings 540 132 736 -112
 

    Total -2,912 -1,830 22,085 25,594
    Cross-currency swap revaluation 1,890 186 2,927 -327
    Unamortized discounts and premiums on market debt 89 477 -202 1,370
    Obligations related to capital leases and other unmatured debt -11 -11 -87 -93
 

  Net change in financing activities -944 -1,178 24,723 26,544
Change in cash balance -6,713 -1,888 -5,796 4,885
Note: Totals may not add due to rounding.
 
Table 6
Condensed statement of assets and liabilities
$ millions
March 31,
2012
September 30,
2012
Change
Liabilities
   Accounts payable and accrued liabilities 125,003 103,115 -21,888
   Interest-bearing debt
      Unmatured debt
         Payable in Canadian currency
            Marketable bonds 448,140 454,249 6,109
            Treasury bills 163,221 183,021 19,800
            Retail debt 8,922 8,730 -192
            Other 11 0 -11
 
            Subtotal 620,294 646,000 25,706
      Payable in foreign currencies 10,715 10,603 -112
      Cross-currency swap revaluation -4,448 -4,775 -327
      Unamortized discounts and premiums on market debt -4,295 -2,925 1,370
      Obligations related to capital leases and other unmatured debt 4,086 3,993 -93
 
      Total unmatured debt 626,352 652,896 26,544
     Pension and other liabilities  
         Public sector pensions 148,911 149,849 938
         Other employee and veteran future benefits 60,515 62,932 2,417
         Other liabilities 6,933 6,860 -73
 
         Total pension and other liabilities 216,359 219,641 3,282
 
      Total interest-bearing debt 842,711 872,537 29,826
 
   Total liabilities 967,714 975,652 7,938
Financial assets
   Cash and accounts receivable 107,662 108,066 404
   Foreign exchange accounts 56,997 54,198 -2,799
   Loans, investments, and advances (net of allowances)1 152,920 153,249 329
 
   Total financial assets 317,579 315,513 -2,066
 
Net debt 650,135 660,139 10,004
Non-financial assets 67,959 66,958 -1,001
 
Federal debt (accumulated deficit) 582,176 593,181 11,005
Note: Totals may not add due to rounding.
1 September 30, 2012 amount includes $2.1 billion in other comprehensive losses reported by enterprise Crown corporations and other government business enterprises.  

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.
November 2012