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

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Highlights

December 2012: budgetary deficit of $0.6 billion

There was a budgetary deficit of $0.6 billion in December 2012, compared to a deficit of $0.5 billion in December 2011.

Revenues increased by $0.6 billion, or 2.8 per cent, reflecting increases in income tax revenues and excise taxes and duties, offset in part by a decrease in other revenues. Program expenses increased by $0.7 billion, or 3.8 per cent, reflecting increases in major transfers to persons and other levels of government. Public debt charges decreased by $0.1 billion, or 4.2 per cent.

April to December 2012: budgetary deficit of $13.0 billion

For the first nine months of the 2012–13 fiscal year, the budgetary deficit stood at $13.0 billion, compared to a deficit of $16.1 billion reported in the same period of 2011–12.

Revenues were up $5.4 billion, or 3.0 per cent, reflecting higher income tax revenues, excise taxes and duties, and Employment Insurance (EI) premium revenues. Program expenses were up $3.7 billion, or 2.2 per cent, reflecting increases in major transfers to persons and other levels of government and direct program expenses. Public debt charges were down $1.4 billion, or 5.8 per cent.

December 2012

There was a budgetary deficit of $0.6 billion in December 2012, compared to a deficit of $0.5 billion in December 2011.

Revenues increased by $0.6 billion, or 2.8 per cent, to $22.2 billion.

  • Personal income tax revenues were up $1.0 billion, or 8.4 per cent.
  • Corporate income tax revenues were down $0.4 billion, or 11.9 per cent.
  • Non-resident income tax revenues were down $0.2 billion, or 34.1 per cent.
  • Excise taxes and duties were up $0.4 billion, or 14.4 per cent, largely reflecting an increase in Goods and Services Tax (GST) revenues of $0.4 billion, or 22.4 per cent. Energy taxes were down $4 million, customs import duties were down $30 million, and other excise taxes and duties were up $0.1 billion. 
  • EI premium revenues were up $44 million, or 5.8 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 10.5 per cent. 

Program expenses in December 2012 were $20.3 billion, up $0.7 billion, or 3.8 per cent, from December 2011.

  • Major transfers to persons, consisting of elderly, EI and children’s benefits, increased by $0.4 billion, or 7.4 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 $0.2 billion, or 17.5 per cent. Children’s benefits, which consist of the Canada Child Tax Benefit and the Universal Child Care Benefit, increased by $15 million.
  • Major transfers to other levels of government consist 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. Major transfers to other levels of government increased by $0.6 billion, or 12.8 per cent, reflecting legislated growth in the Canada Health Transfer, the Canada Social Transfer, Equalization transfers and transfers to the territories, as well as an increase in transfers to Canada’s cities and communities.
  • 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 $0.2 billion, or 2.5 per cent, from the previous year.
    • The direct program expense portion of transfer payments made by departments and agencies decreased by $0.2 billion, or 6.8 per cent.
    • Other direct program expenses decreased by $9 million, or 0.1 per cent.

Public debt charges decreased by $0.1 billion, or 4.2 per cent.

April to December 2012

For the first nine months of the 2012–13 fiscal year, there was a budgetary deficit of $13.0 billion, compared to a deficit of $16.1 billion reported during the same period of 2011–12.

Revenues increased by $5.4 billion, or 3.0 per cent, to $183.9 billion.

  • Personal income tax revenues were up $3.8 billion, or 4.2 per cent.
  • Corporate income tax revenues were up $0.6 billion, or 2.7 per cent, reflecting a decrease in receipts of about 1.3 per cent and a decrease of 12.0 per cent in refunds of taxes paid.
  • Non-resident income tax revenues were down $0.1 billion, or 3.5 per cent.
  • Excise taxes and duties were up $1.2 billion, or 3.6 per cent, largely reflecting an increase in GST revenues of $0.9 billion, or 4.2 per cent. Energy taxes, customs import duties, and other excise taxes and duties each increased by $0.1 billion.
  • EI premium revenues were up $0.9 billion, or 7.3 per cent, reflecting growth in insurable earnings and the 2012 premium rate of $1.83 per $100 of insurable earnings.
  • Other revenues were down $0.9 billion, or 4.8 per cent.

For the April to December 2012 period, program expenses were $174.7 billion, up $3.7 billion, or 2.2 per cent, from the same period the previous year. 

  • Major transfers to persons were up $1.7 billion, or 3.4 per cent. Elderly benefits increased by $1.7 billion, or 6.0 per cent, reflecting the introduction of the Guaranteed Income Supplement top-up benefit in July 2011, 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 1.1 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 $1.3 billion, or 3.1 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 $0.7 billion, or 0.9 per cent, year-to-date.
    • The direct program expense portion of transfer payments made by departments and agencies decreased by $0.2 billion, or 1.1 per cent.
    • Other direct program expenses increased by $1.0 billion, or 1.8 per cent, largely reflecting an increase in the accrual cost of employee and veteran future benefits.

Public debt charges decreased by $1.4 billion, or 5.8 per cent, reflecting a lower effective interest rate on the stock of interest-bearing debt.

Revenues: April to December 2012
Revenues $billions
EI premiums 12.7
Corporate income taxes 22.0
Other revenues 21.5
Excise taxes and duties 33.4
Personal income taxes 94.2
Total 183.9
Expenses: April to December 2012
Expenses $billions
Public debt charges 22.2
Major transfers to other levels of gov’t 44.1
Major transfers to persons 52.4
Direct program expenses 78.2
Total 196.9

Financial requirement of $22.3 billion for April to December 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 $13.0 billion and a requirement of $9.3 billion from non-budgetary transactions, there was a financial requirement of $22.3 billion for the April to December 2012 period, compared to a financial requirement of $32.6 billion for the same period the previous year.

Net financing activities up $29.3 billion

The Government financed this financial requirement of $22.3 billion and increased cash balances by $7.1 billion by increasing market debt by $29.3 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 December 2012 stood at $20.4 billion, up $11.5 billion from their level at the end of December 2011.  

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

  20111 2012 2011–121 2012–13
Budgetary transactions
  Revenues 21,573 22,171 178,470 183,904
  Expenses
    Program expenses -19,555 -20,295 -170,932 -174,665
    Public debt charges -2,556 -2,448 -23,600 -22,226
 

  Budgetary balance (deficit/surplus) -538 -572 -16,062 -12,987
Non-budgetary transactions 396 143 -16,541 -9,279
 

Financial source/requirement -142 -429 -32,603 -22,266
Net change in financing activities -7,107 -4,298 31,347 29,321
 

Net change in cash balances -7,249 -4,727 -1,256 7,055
Cash balance at end of period 8,900 20,389
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
  December   April to December  
 
 
 
  2011
($ millions)
2012
($ millions)
Change
(%)
2011–12
($ millions)
2012–13
($ millions)
Change
(%)
Tax revenues
  Income taxes
    Personal income tax1 11,581 12,553 8.4 90,401 94,237 4.2
    Corporate income tax2 3,253 2,865 -11.9 21,421 22,008 2.7
    Non-resident income tax 710 468 -34.1 3,775 3,643 -3.5
 

    Total income tax 15,544 15,886 2.2 115,597 119,888 3.7
  Excise taxes and duties
    Goods and Services Tax3 1,838 2,249 22.4 21,185 22,071 4.2
    Energy taxes 462 458 -0.9 4,023 4,081 1.4
    Customs import duties 290 260 -10.3 2,862 2,963 3.5
    Other excise taxes and duties 481 547 13.7 4,146 4,268 2.9
 

    Total excise taxes and duties 3,071 3,514 14.4 32,216 33,383 3.6
 

  Total tax revenues 18,615 19,400 4.2 147,813 153,271 3.7
Employment Insurance premiums 765 809 5.8 11,873 12,742 7.3
Other revenues 2,193 1,962 -10.5 18,784 17,891 -4.8
 

Total revenues 21,573 22,171 2.8 178,470 183,904 3.0
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
  December    April to December  
 
 
 
  2011
($ millions)
2012
($ millions)
Change
(%)
2011–12
($ millions)
2012–13
($ millions)
Change
(%)
Major transfers to persons
  Elderly benefits 3,240 3,400 4.9 28,335 30,049 6.0
  Employment Insurance benefits 1,398 1,643 17.5 12,675 12,532 -1.1
  Children's benefits 1,076 1,091 1.4 9,690 9,818 1.3
 

  Total 5,714 6,134 7.4 50,700 52,399 3.4
Major transfers to other levels
  of government
  Support for health and other
    social programs
    Canada Health Transfer 2,262 2,425 7.2 20,382 21,661 6.3
    Canada Social Transfer 960 989 3.0 8,636 8,895 3.0
 

    Total 3,222 3,414 6.0 29,018 30,556 5.3
  Fiscal arrangements and other transfers 1,463 1,497 2.3 14,668 14,765 0.7
  Canada's cities and communities 0 347 n/a 1,983 1,858 -6.3
  Quebec Abatement -328 -343 4.6 -2,912 -3,090 6.1
 

  Total 4,357 4,915 12.8 42,757 44,089 3.1
Direct program expenses
  Transfer payments            
    Aboriginal Affairs and
      Northern Development
619 781 26.2 3,901 4,638 18.9
    Agriculture and Agri-Food 274 271 -1.1 1,277 976 -23.6
    Foreign Affairs and
      International Trade
461 368 -20.2 2,091 1,814 -13.2
    Health 162 158 -2.5 1,874 1,879 0.3
    Human Resources and
      Skills Development1
599 327 -45.4 3,672 4,011 9.2
    Industry 252 200 -20.6 1,774 1,601 -9.8
    Other2 1,008 1,041 3.3 8,863 8,285 -6.5
 

    Total 3,375 3,146 -6.8 23,452 23,204 -1.1
  Other direct program expenses
    Crown corporations1 663 549 -17.2 5,946 5,660 -4.8
    National Defence 1,680 1,824 8.6 14,968 15,259 1.9
    All other departments
      and agencies
3,766 3,727 -1.0 33,109 34,054 2.9
 

    Total other direct program expenses 6,109 6,100 -0.1 54,023 54,973 1.8
 

  Total direct program expenses 9,484 9,246 -2.5 77,475 78,177 0.9
 

Total program expenses 19,555 20,295 3.8 170,932 174,665 2.2
Public debt charges 2,556 2,448 -4.2 23,600 22,226 -5.8
 

Total expenses 22,111 22,743 2.9 194,532 196,891 1.2
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
  December  April to December
 

  2011 2012 2011–12 2012–13
Budgetary balance (deficit/surplus) -538 -572 -16,062 -12,987
Non-budgetary transactions
  Capital investment activities -568 4 -1,917 -1,980
  Other investing activities 447 208 666 -3,213
  Pension and other accounts 989 450 3,439 4,268
  Other activities    
    Accounts payable, receivables, accruals and allowances1 -1,177 -155 -15,814 -12,809
    Foreign exchange activities 432 -444 -6,051 1,639
    Amortization of tangible capital assets 273 80 3,136 2,816
 

    Total other activities -472 -519 -18,729 -8,354
 

  Total non-budgetary transactions 396 143 -16,541 -9,279
 

Financial source/requirement -142 -429 -32,603 -22,266
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
  December  April to December
 

  2011 2012 2011–12 2012–13
Financial source/requirement -142 -429 -32,603 -22,266
Net increase (+)/decrease (-) in financing activities
  Unmatured debt transactions
    Canadian currency borrowings
      Marketable bonds -26 -1,258 25,814 11,536
      Treasury bills -6,800 -4,400 4,800 16,600
      Retail debt 227 287 -1,091 -1,372
      Other 0 0 -16 -11
 

      Total -6,599 -5,371 29,507 26,753
    Foreign currency borrowings -72 98 674 60
 

    Total -6,671 -5,273 30,181 26,813
    Cross-currency swap revaluation -691 230 1,097 505
    Unamortized discounts and premiums on market debt 267 753 191 2,096
    Obligations related to capital leases and other unmatured debt -12 -8 -122 -93
 

  Net change in financing activities -7,107 -4,298 31,347 29,321
Change in cash balance -7,249 -4,727 -1,256 7,055
Note: Totals may not add due to rounding.
 
Table 6
Condensed statement of assets and liabilities
$ millions
March 31,
2012
December 31,
2012
Change
Liabilities
   Accounts payable and accrued liabilities 125,003 111,535 -13,468
   Interest-bearing debt
      Unmatured debt
         Payable in Canadian currency
            Marketable bonds 448,140 459,676 11,536
            Treasury bills 163,221 179,821 16,600
            Retail debt 8,922 7,550 -1,372
            Other 11 0 -11
 
            Subtotal 620,294 647,047 26,753
      Payable in foreign currencies 10,715 10,775 60
      Cross-currency swap revaluation -4,448 -3,943 505
      Unamortized discounts and premiums on market debt -4,295 -2,199 2,096
      Obligations related to capital leases and other unmatured debt 4,086 3,993 -93
 
      Total unmatured debt 626,352 655,673 29,321
     Pension and other liabilities  
         Public sector pensions 148,911 150,324 1,413
         Other employee and veteran future benefits 60,515 63,832 3,317
         Other liabilities 6,933 6,471 -462
 
         Total pension and other liabilities 216,359 220,627 4,268
 
      Total interest-bearing debt 842,711 876,300 33,589
 
   Total liabilities 967,714 987,835 20,121
Financial assets
   Cash and accounts receivable 107,662 114,058 6,396
   Foreign exchange accounts 56,997 55,358 -1,639
   Loans, investments, and advances (net of allowances)1 152,920 155,543 2,623
 
   Total financial assets 317,579 324,959 7,380
 
Net debt 650,135 662,876 12,741
Non-financial assets 67,959 67,123 -836
 
Federal debt (accumulated deficit) 582,176 595,753 13,577
Note: Totals may not add due to rounding.
1 December 31, 2012 amount includes $0.6 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.

February 2013