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Highlights

November 2012: budgetary deficit of $1.9 billion

There was a budgetary deficit of $1.9 billion in November 2012, compared to a deficit of $1.6 billion in November 2011.

Revenues decreased by $0.1 billion, or 0.3 per cent, reflecting decreases in excise taxes and duties and other revenues, offset by increases in income tax revenues. Program expenses increased by $0.3 billion, or 1.6 per cent, reflecting increases in major transfers to persons and direct program expenses. Public debt charges decreased by $0.1 billion, or 5.4 per cent.

April to November 2012: budgetary deficit of $12.4 billion

For the first eight months of the 2012–13 fiscal year, the budgetary deficit stood at $12.4 billion, compared to a deficit of $15.5 billion reported in the same period of 2011–12.

Revenues were up $4.8 billion, or 3.1 per cent, reflecting higher income tax revenues, excise taxes and duties, and Employment Insurance (EI) premium revenues. Program expenses were up $3.0 billion, or 2.0 per cent, reflecting increases in major transfers to persons and other levels of government and direct program expenses. Public debt charges were down $1.3 billion, or 6.0 per cent.

November 2012

There was a budgetary deficit of $1.9 billion in November 2012, compared to a deficit of $1.6 billion in November 2011.

Revenues decreased by $0.1 billion, or 0.3 per cent, to $19.9 billion.

  • Personal income tax revenues were up $0.3 billion, or 3.3 per cent.
  • Corporate income tax revenues were down $0.2 billion, or 5.6 per cent.
  • Non-resident income tax revenues were up $0.1 billion, or 15.2 per cent.
  • Excise taxes and duties were down $0.2 billion, or 3.9 per cent, largely reflecting a decrease in Goods and Services Tax (GST) revenues of $0.2 billion, or 5.9 per cent. Energy taxes were down $17 million, customs import duties were up $5 million, and other excise taxes and duties were up $20 million.
  • EI premium revenues were up $0.1 billion, or 7.5 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 9.0 per cent.

Program expenses in November 2012 were $19.3 billion, up $0.3 billion, or 1.6 per cent, from November 2011.

  • Major transfers to persons, consisting of elderly, EI and children's benefits, increased by $0.2 billion, or 4.0 per cent. Elderly benefits increased by $0.2 billion, or 4.9 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 $10 million, or 0.8 per cent. Children's benefits, which consist of the Canada Child Tax Benefit and the Universal Child Care Benefit, increased by $0.1 billion.
  • 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, decreased by $3 million as legislated growth in the Canada Health Transfer, the Canada Social Transfer, Equalization transfers and transfers to the territories was more than offset by a decrease in transfers to Canada's cities and communities and a decrease in transfers under the 2005 Offshore Accords.
  • 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 up $0.1 billion, or 1.0 per cent, from the previous year.
    • Transfer payments increased by $0.3 billion, or 15.3 per cent.
    • Other direct program expenses decreased by $0.2 billion, or 3.8 per cent.

Public debt charges decreased by $0.1 billion, or 5.4 per cent.

April to November 2012

For the first eight months of the 2012–13 fiscal year, there was a budgetary deficit of $12.4 billion, compared to a deficit of $15.5 billion reported during the same period of 2011–12.

Revenues increased by $4.8 billion, or 3.1 per cent, to $161.7 billion.

  • Personal income tax revenues were up $2.9 billion, or 3.6 per cent.
  • Corporate income tax revenues were up $1.0 billion, or 5.4 per cent, reflecting a decrease in receipts of about 0.8 per cent and a decrease of 15.0 per cent in refunds of taxes paid.
  • Non-resident income tax revenues were up $0.1 billion, or 3.6 per cent.
  • Excise taxes and duties were up $0.7 billion, or 2.5 per cent, largely reflecting an increase in GST revenues of $0.5 billion, or 2.5 per cent. Energy taxes, customs import duties, and other excise taxes and duties each increased by $0.1 billion.
  • EI premium revenues were up $0.8 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 $0.7 billion, or 4.0 per cent.

For the April to November 2012 period, program expenses were $154.4 billion, up $3.0 billion, or 2.0 per cent, from the same period the previous year.

  • Major transfers to persons were up $1.3 billion, or 2.8 per cent. Elderly benefits increased by $1.6 billion or 6.2 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 $0.4 billion, or 3.4 per cent, and children's benefits were up $0.1 billion, or 1.3 per cent.
  • Major transfers to other levels of government were up $0.8 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 up $0.9 billion, or 1.4 per cent.
    • Transfer payments were down $19 million, or 0.1 per cent.
    • Other direct program expenses increased by $1.0 billion, or 2.0 per cent, largely reflecting an increase in the accrual cost of employee and veteran future benefits.

Public debt charges decreased by $1.3 billion, or 6.0 per cent, reflecting a lower effective interest rate on the stock of interest-bearing debt.

Revenues: April to November 2012
Revenues $billions
EI premiums 11.9
Corporate income taxes 19.1
Other revenues 19.1
Excise taxes and duties 29.9
Personal income taxes 81.7
Total 161.7
Expenses: April to September 2012
Expenses $billions
Public debt charges 19.8
Major transfers to other levels of gov’t 39.2
Major transfers to persons 46.3
Direct program expenses 68.9
Total 174.1

Financial requirement of $21.8 billion for April to November 2012

The budgetary balance is presented on an accrual basis of accounting, recording government revenues and expenses when they are earned 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 $12.4 billion and a requirement of $9.4 billion from non-budgetary transactions, there was a financial requirement of $21.8 billion for the April to November 2012 period, compared to a financial requirement of $32.5 billion for the same period the previous year.

Net financing activities up $33.6 billion

The Government financed this financial requirement of $21.8 billion and increased cash balances by $11.8 billion by increasing market debt by $33.6 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 November 2012 stood at $25.1 billion, up $9.0 billion from their level at the end of November 2011.

 

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

  20111 2012 2011–121 2012–13
Budgetary transactions
  Revenues 19,958 19,902 156,897 161,733
  Expenses
    Program expenses -18,980 -19,289 -151,377 -154,370
    Public debt charges -2,604 -2,463 -21,044 -19,778
 

  Budgetary balance (deficit/surplus) -1,626 -1,850 -15,524 -12,415
Non-budgetary transactions -2,271 2,333 -16,937 -9,422
 

Financial source/requirement -3,897 483 -32,461 -21,837
Net change in financing activities 11,066 8,296 38,454 33,619
 

Net change in cash balances 7,169 8,779 5,993 11,782
Cash balance at end of period 16,145 25,116
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
  November   April to November  
 
 
 
  2011
($ millions)
2012
($ millions)
Change
(%)
2011–12
($ millions)
2012–13
($ millions)
Change
(%)
Tax revenues
  Income taxes
    Personal income tax1 9,875 10,200 3.3 78,820 81,684 3.6
    Corporate income tax2 2,763 2,608 -5.6 18,168 19,143 5.4
    Non-resident income tax 394 454 15.2 3,065 3,175 3.6
 

    Total income tax 13,032 13,262 1.8 100,053 104,002 3.9
  Excise taxes and duties            
    Goods and Services Tax3 2,715 2,555 -5.9 19,347 19,822 2.5
    Energy taxes 459 442 -3.7 3,561 3,623 1.7
    Customs import duties 305 310 1.6 2,572 2,703 5.1
    Other excise taxes and duties 412 432 4.9 3,665 3,721 1.5
 

    Total excise taxes and duties 3,891 3,739 -3.9 29,145 29,869 2.5
 

  Total tax revenues 16,923 17,001 0.5 129,198 133,871 3.6
Employment Insurance premiums 840 903 7.5 11,108 11,933 7.4
Other revenues 2,195 1,998 -9.0 16,591 15,929 -4.0
 

Total revenues 19,958 19,902 -0.3 156,897 161,733 3.1
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 from income tax revenues to 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 from income tax revenues to 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
  November    April to November  
 
 
 
  2011
($ millions)
2012
($ millions)
Change
(%)
2011–12
($ millions)
2012–13
($ millions)
Change
(%)
Major transfers to persons
  Elderly benefits 3,235 3,393 4.9 25,095 26,649 6.2
  Employment Insurance benefits 1,239 1,249 0.8 11,277 10,889 -3.4
  Children's benefits 1,066 1,121 5.2 8,614 8,727 1.3
 

  Total 5,540 5,763 4.0 44,986 46,265 2.8
Major transfers to other levels
  of government
  Support for health and other
    social programs
    Canada Health Transfer 2,262 2,425 7.2 18,120 19,236 6.2
    Canada Social Transfer 959 988 3.0 7,676 7,906 3.0
 

    Total 3,221 3,413 6.0 25,796 27,142 5.2
  Fiscal arrangements and other transfers 1,462 1,522 4.1 13,205 13,268 0.5
  Canada's cities and communities 421 181 -57.0 1,983 1,511 -23.8
  Quebec Abatement -328 -343 4.6 -2,584 -2,747 6.3
 

  Total 4,776 4,773 -0.1 38,400 39,174 2.0
Direct program expenses
  Transfer payments            
    Aboriginal Affairs and
      Northern Development
438 419 -4.3 3,282 3,857 17.5
    Agriculture and Agri-Food 109 114 4.6 1,003 705 -29.7
    Foreign Affairs and
      International Trade
191 198 3.7 1,630 1,446 -11.3
    Health 263 245 -6.8 1,712 1,721 0.5
    Human Resources and
      Skills Development1
306 535 74.8 3,073 3,684 19.9
    Industry 156 146 -6.4 1,522 1,401 -8.0
    Other2 740 883 19.3 7,855 7,244 -7.8
 

    Total 2,203 2,540 15.3 20,077 20,058 -0.1
  Other direct program expenses
    Crown corporations1 716 560 -21.8 5,283 5,111 -3.3
    National Defence 1,897 1,560 -17.8 13,288 13,435 1.1
    All other departments
      and agencies
3,848 4,093 6.4 29,343 30,327 3.4
 

    Total other direct program expenses 6,461 6,213 -3.8 47,914 48,873 2.0
 

  Total direct program expenses 8,664 8,753 1.0 67,991 68,931 1.4
 

Total program expenses 18,980 19,289 1.6 151,377 154,370 2.0
Public debt charges 2,604 2,463 -5.4 21,044 19,778 -6.0
 

Total expenses 21,584 21,752 0.8 172,421 174,148 1.0
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 made by 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 from income tax revenues to transfer payments.
 
Table 4
The budgetary balance and financial source/requirement
$ millions
  November  April to November
 

  2011 2012 2011–12 2012–13
Budgetary balance (deficit/surplus) -1,626 -1,850 -15,524 -12,415
Non-budgetary transactions        
  Capital investment activities -194 -680 -1,349 -1,984
  Other investing activities -331 -411 219 -3,421
  Pension and other accounts 502 246 2,450 3,818
  Other activities    
    Accounts payable, receivables, accruals and allowances1 -467 2,604 -14,637 -12,654
    Foreign exchange activities -2,137 226 -6,483 2,083
    Amortization of tangible capital assets 356 348 2,863 2,736
 

    Total other activities -2,248 3,178 -18,257 -7,835
 

  Total non-budgetary transactions -2,271 2,333 -16,937 -9,422
 

Financial source/requirement -3,897 483 -32,461 -21,837
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
  November  April to November
 

  2011 2012 2011–12 2012–13
Financial source/requirement -3,897 483 -32,461 -21,837
Net increase (+)/decrease (-) in financing activities
  Unmatured debt transactions
    Canadian currency borrowings
      Marketable bonds 9,358 3,770 25,840 12,794
      Treasury bills 1,500 6,100 11,600 21,000
      Retail debt -995 -1,416 -1,318 -1,659
      Other 0 0 -16 -11
 

      Total 9,863 8,454 36,106 32,124
    Foreign currency borrowings 357 -28 746 -38
 

    Total 10,220 8,426 36,852 32,086
    Cross-currency swap revaluation 570 -184 1,788 275
    Unamortized discounts and premiums on market debt 288 36 -76 1,343
    Obligations related to capital leases and other unmatured debt -12 18 -110 -85
 

  Net change in financing activities 11,066 8,296 38,454 33,619
Change in cash balance 7,169 8,779 5,993 11,782
Note: Totals may not add due to rounding.
 
Table 6
Condensed statement of assets and liabilities
$ millions
March 31,
2012
November 30,
2012
Change
Liabilities
   Accounts payable and accrued liabilities 125,003 111,539 -13,464
   Interest-bearing debt
      Unmatured debt
         Payable in Canadian currency
            Marketable bonds 448,140 460,934 12,794
            Treasury bills 163,221 184,221 21,000
            Retail debt 8,922 7,263 -1,659
            Other 11 0 -11
 
            Subtotal 620,294 652,418 32,124
      Payable in foreign currencies 10,715 10,677 -38
      Cross-currency swap revaluation -4,448 -4,173 275
      Unamortized discounts and premiums on market debt -4,295 -2,952 1,343
      Obligations related to capital leases and other unmatured debt 4,086 4,001 -85
 
      Total unmatured debt 626,352 659,971 33,619
     Pension and other liabilities  
         Public sector pensions 148,911 150,215 1,304
         Other employee and veteran future benefits 60,515 63,543 3,028
         Other liabilities 6,933 6,419 -514
 
         Total pension and other liabilities 216,359 220,177 3,818
 
      Total interest-bearing debt 842,711 880,148 37,437
 
   Total liabilities 967,714 991,687 23,973
Financial assets
   Cash and accounts receivable 107,662 118,634 10,972
   Foreign exchange accounts 56,997 54,914 -2,083
   Loans, investments, and advances (net of allowances)1 152,920 154,735 1,815
 
   Total financial assets 317,579 328,283 10,704
 
Net debt 650,135 663,404 13,269
Non-financial assets 67,959 67,207 -752
 
Federal debt (accumulated deficit) 582,176 596,197 14,021
Note: Totals may not add due to rounding.
1 November 30, 2012 amount includes $1.6 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.

January 2013