The Fiscal Monitor
A publication of the Department of Finance

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January 2014: budgetary surplus of $2.2 billion

There was a budgetary surplus of $2.2 billion in January 2014, compared to a surplus of $0.5 billion in January 2013.

Revenues increased by $1.2 billion, or 5.1 per cent, reflecting increases in most revenue streams. Program expenses decreased by $0.6 billion, or 2.6 per cent, while public debt charges increased by $0.1 billion, or 3.6 per cent.

April 2013 to January 2014: budgetary deficit of $10.5 billion

For the April 2013 to January 2014 period of the 2013–14 fiscal year, the budgetary deficit stood at $10.5 billion, compared to a deficit of $13.9 billion reported in the same period of 2012–13.

Revenues were up $8.7 billion, or 4.2 per cent, reflecting increases in personal income tax, non-resident income tax, Goods and Services Tax (GST), Employment Insurance (EI) premium and other revenues. Program expenses were up $5.6 billion, or 2.9 per cent, reflecting increases in major transfers to persons and other levels of government and direct program expenses. Public debt charges were down $0.2 billion, or 1.0 per cent.

January 2014

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There was a budgetary surplus of $2.2 billion in January 2014, compared to a surplus of $0.5 billion in January 2013.

Revenues increased by $1.2 billion, or 5.1 per cent, to $25.0 billion.

  • Personal income tax revenues were up $0.1 billion, or 0.7 per cent.
  • Corporate income tax revenues were up $0.1 billion, or 2.2 per cent.
  • Non-resident income tax revenues were up $0.5 billion, or 48.9 per cent.
  • Excise taxes and duties were up $0.3 billion, or 9.8 per cent. GST revenues were up $0.4 billion, or 16.6 per cent. Energy taxes increased by $10 million, customs import duties increased by $21 million, and other excise taxes and duties decreased by $0.1 billion.
  • EI premium revenues were up $0.1 billion, or 4.4 per cent.
  • 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 up $0.1 billion, or 6.2 per cent.

Program expenses were $20.5 billion, down $0.6 billion, or 2.6 per cent, from the previous year.

  • Major transfers to persons, consisting of elderly, EI and children’s benefits, increased by $29 million, or 0.5 per cent. Elderly benefits increased by $0.1 billion, or 2.7 per cent, due to growth in the elderly population and changes in consumer prices, to which benefits are fully indexed. EI benefit payments decreased by $12 million, or 0.7 per cent. Children’s benefits, which consist of the Canada Child Tax Benefit and the Universal Child Care Benefit, decreased by $0.1 billion, or 4.7 per cent.
  • 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 $0.4 billion, or 9.4 per cent, due to 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 transfer payments to individuals and other organizations not included in major transfers to persons and other levels of government, and other direct program expenses, which consist of operating expenses of National Defence and other departments and agencies and expenses of Crown corporations. Direct program expenses were down $1.0 billion, or 9.9 per cent, from the previous year. Within direct program expenses:
    • Transfer payments decreased by $0.3 billion, or 10.2 per cent, due mainly to year-over-year differences in the timing of payments.
    • Other direct program expenses decreased by $0.7 billion, or 9.8 per cent, largely reflecting a decrease in claims expenses.

Public debt charges increased by $0.1 billion, or 3.6 per cent.

April 2013 to January 2014

For the April 2013 to January 2014 period of the 2013–14 fiscal year, there was a budgetary deficit of $10.5 billion, compared to a deficit of $13.9 billion reported during the same period of 2012–13.

Revenues increased by $8.7 billion, or 4.2 per cent, to $215.6 billion.

  • Personal income tax revenues were up $3.3 billion, or 3.2 per cent.
  • Corporate income tax revenues were down $0.6 billion, or 2.2 per cent.
  • Non-resident income tax revenues were up $1.0 billion, or 22.2 per cent.
  • Excise taxes and duties were up $1.7 billion, or 4.7 per cent, largely reflecting a $1.7-billion increase in GST revenues. Energy taxes increased by $3 million, customs import duties increased by $0.2 billion, and other excise taxes and duties decreased by $0.2 billion.
  • EI premium revenues were up $1.3 billion, or 8.7 per cent, reflecting growth in insurable earnings and the EI premium rate of $1.88 per $100 of insurable earnings for 2013 and 2014.
  • Other revenues were up $1.9 billion, or 9.2 per cent, reflecting in part the gain realized on the sale of General Motors common shares in September 2013.

Program expenses were $201.9 billion, up $5.6 billion, or 2.9 per cent, from the same period the previous year.

  • Major transfers to persons were up $1.3 billion, or 2.2 per cent. Elderly benefits increased by $1.3 billion, or 3.8 per cent, reflecting growth in the elderly population and changes in consumer prices, to which benefits are fully indexed. EI benefit payments decreased by $22 million, or 0.2 per cent, and children’s benefits were up $0.1 billion, or 0.5 per cent.
  • Major transfers to other levels of government were up $1.8 billion, or 3.6 per cent, due to legislated growth in the Canada Health Transfer, the Canada Social Transfer, Equalization transfers and transfers to the territories, offset in part by a decrease in total transfer protection payments.
  • Direct program expenses were up $2.6 billion, or 2.9 per cent. Within direct program expenses:
    • Transfer payments increased by $3.2 billion, or 12.2 per cent, largely reflecting the accrual of a liability for disaster assistance related to the 2013 flood in Alberta.
    • Other direct program expenses decreased by $0.6 billion, or 1.0 per cent.

Public debt charges decreased by $0.2 billion, or 1.0 per cent.

Revenues and expenses (April 2013 to January 2014)
Revenues and expenses (April to December 2013) - For details, refer to preceding paragraphs.
Note: Totals may not add due to rounding.

Financial source of $3.4 billion for April 2013 to January 2014

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 $10.5 billion and a source of $14.0 billion from non-budgetary transactions, there was a financial source of $3.4 billion for the April 2013 to January 2014 period, compared to a financial requirement of $22.6 billion for the same period the previous year. The change in the financial source/requirement over the previous year mainly reflects the repayment of principal on assets maturing under the Insured Mortgage Purchase Program.

Net financing activities up $4.3 billion

The Government used this financial source of $3.4 billion combined with an increase in market debt of $4.3 billion to increase cash balances by $7.7 billion. The increase in market debt was achieved primarily through the issuance of marketable bonds. 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 January 2014 stood at $32.0 billion, up $14.1 billion from their level at the end of January 2013, largely reflecting increased deposits held with the Bank of Canada under the Government’s prudential liquidity plan.

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

  20131 2014 2012–131 2013–14
Budgetary transactions        
  Revenues 23,841 25,046 206,872 215,586
  Expenses
    Program expenses -21,098 -20,542 -196,254 -201,881
    Public debt charges -2,263 -2,345 -24,489 -24,245
 

  Budgetary balance (deficit/surplus) 480 2,159 -13,871 -10,540
Non-budgetary transactions -781 3,543 -8,696 13,974
 

Financial source/requirement -301 5,702 -22,567 3,434
Net change in financing activities -2,218 -210 27,103 4,253
 

Net change in cash balances -2,519 5,492 4,536 7,687
Cash balance at end of period 17,872 32,002
Note: Positive numbers indicate a net source of funds. Negative numbers indicate a net requirement for funds.
1 Comparative figures have been restated to reflect accounting changes in 2013–14 and to conform with the presentation in the Public Accounts of Canada 2013.
 
Table 2
Revenues
  January   April to January  
 
 
 
  2013
($ millions)
2014
($ millions)
Change
(%)
2012–13
($ millions)
2013–14
($ millions)
Change
(%)
Tax revenues            
  Income taxes            
    Personal income tax1 11,913 11,999 0.7 104,472 107,805 3.2
    Corporate income tax2 2,824 2,885 2.2 25,289 24,728 -2.2
    Non-resident income tax3 963 1,434 48.9 4,462 5,454 22.2
 

    Total income tax 15,700 16,318 3.9 134,223 137,987 2.8
  Excise taxes and duties
    Goods and Services Tax 2,232 2,602 16.6 24,303 26,038 7.1
    Energy taxes 453 463 2.2 4,533 4,536 0.1
    Customs import duties 368 389 5.7 3,331 3,555 6.7
    Other excise taxes and duties 449 392 -12.7 4,718 4,498 -4.7
 

    Total excise taxes and duties 3,502 3,846 9.8 36,885 38,627 4.7
 

  Total tax revenues 19,202 20,164 5.0 171,108 176,614 3.2
Employment Insurance premiums 2,507 2,617 4.4 15,249 16,579 8.7
Other revenues4 2,132 2,265 6.2 20,515 22,393 9.2
 

Total revenues 23,841 25,046 5.1 206,872 215,586 4.2
Note: Totals may not add due to rounding.
1 Comparative figures have been restated to reflect a change in methodology for reporting monthly personal income tax revenue.
2 Comparative figures have been restated to reflect a change in methodology for reporting monthly corporate income tax revenue.
3 Comparative figures have been restated to reflect a change in methodology for reporting monthly non-resident income tax revenue.
4 Comparative figures have been restated to reflect the reclassification of interest owed to taxpayers from other revenues to other direct program expenses of departments and agencies.
 
Table 3
Expenses
  January   April to January  
 
 
 
  2013
($ millions)
2014
($ millions)
Change
(%)
2012–13
($ millions)
2013–14
($ millions)
Change
(%)
Major transfers to persons            
  Elderly benefits 3,426 3,519 2.7 33,475 34,738 3.8
  Employment Insurance benefits 1,663 1,651 -0.7 14,195 14,173 -0.2
  Children's benefits 1,110 1,058 -4.7 10,928 10,981 0.5
 

  Total 6,199 6,228 0.5 58,598 59,892 2.2
Major transfers to other levels
  of government
  Support for health and other
    social programs
    Canada Health Transfer 2,425 2,544 4.9 24,086 25,454 5.7
    Canada Social Transfer 988 1,018 3.0 9,883 10,179 3.0
 

    Total 3,413 3,562 4.4 33,969 35,633 4.9
  Fiscal arrangements and other transfers 1,525 1,582 3.7 16,290 16,352 0.4
  Canada's cities and communities 0 232 n/a 1,858 1,968 5.9
  Quebec Abatement -344 -348 1.2 -3,434 -3,518 2.4
 

  Total 4,594 5,028 9.4 48,683 50,435 3.6
Direct program expenses
  Transfer payments
    Aboriginal Affairs and
      Northern Development
118 187 58.5 4,756 4,717 -0.8
    Agriculture and Agri-Food 259 98 -62.2 1,235 948 -23.2
    Employment and Social Development 719 736 2.4 4,730 4,797 1.4
    Foreign Affairs, Trade and Development 415 273 -34.2 2,229 2,235 0.3
    Health 265 244 -7.9 2,144 2,389 11.4
    Industry 165 144 -12.7 1,766 2,027 14.8
    Other 1,267 1,199 -5.4 9,552 12,512 31.0
 

    Total 3,208 2,881 -10.2 26,412 29,625 12.2
  Other direct program expenses
    Crown corporations 899 647 -28.0 6,559 6,234 -5.0
    National Defence 1,464 1,840 25.7 16,723 16,814 0.5
    All other departments
      and agencies1
4,734 3,918 -17.2 39,279 38,881 -1.0
 

    Total other direct program expenses 7,097 6,405 -9.8 62,561 61,929 -1.0
 

  Total direct program expenses 10,305 9,286 -9.9 88,973 91,554 2.9
 

Total program expenses 21,098 20,542 -2.6 196,254 201,881 2.9
Public debt charges 2,263 2,345 3.6 24,489 24,245 -1.0
 

Total expenses 23,361 22,887 -2.0 220,743 226,126 2.4
Note: Totals may not add due to rounding.
1 Comparative figures have been restated to reflect the reclassification of interest owed to taxpayers from other revenues to other direct program expenses of departments and agencies.
 
Table 4
The budgetary balance and financial source/requirement
$ millions
  January April to January
 

  2013 2014 2012–13 2013–14
Budgetary balance (deficit/surplus) 480 2,159 -13,871 -10,540
Non-budgetary transactions
  Capital investment activities -715 -335 -2,695 -3,404
  Other investing activities 92 7,689 -3,121 29,123
  Pension and other accounts 596 366 4,864 4,379
  Other activities    
    Accounts payable, receivables, accruals and allowances1 -311 -951 -11,756 -9,471
    Foreign exchange activities -968 -3,565 671 -9,785
    Amortization of tangible capital assets 525 339 3,341 3,132
 

    Total other activities -754 -4,177 -7,744 -16,124
 

  Total non-budgetary transactions -781 3,543 -8,696 13,974
 

Financial source/requirement -301 5,702 -22,567 3,434
Note: Totals may not add due to rounding.
1 Comparative figures have been restated to reflect a change in methodology for reporting monthly personal, corporate, and non-resident income tax revenues.
 
Table 5
Financial source/requirement and net financing activities
$ millions
  January April to January
 

  2013 2014 2012–13 2013–14
Financial source/requirement -301 5,702 -22,567 3,434
Net increase (+)/decrease (-) in financing activities
  Unmatured debt transactions
    Canadian currency borrowings
      Marketable bonds 3,391 6,092 14,927 16,346
      Treasury bills -6,200 -9,200 10,400 -18,800
      Retail debt 22 -17 -1,350 -1,076
      Other 0 0 -11 0
 

      Total -2,787 -3,125 23,966 -3,530
    Foreign currency borrowings 129 764 189 1,717
 

    Total -2,658 -2,361 24,155 -1,813
    Cross-currency swap revaluation 524 2,100 1,029 5,676
    Unamortized discounts and premiums on market debt -23 38 2,073 429
    Obligations related to capital leases and other unmatured debt -61 13 -154 -39
 

  Net change in financing activities -2,218 -210 27,103 4,253
Change in cash balance -2,519 5,492 4,536 7,687
Note: Totals may not add due to rounding.
 
Table 6
Condensed statement of assets and liabilities
$ millions
March 31,
2013
January 31,
2014
Change
Liabilities
   Accounts payable and accrued liabilities 118,744 114,010 -4,734
   Interest-bearing debt
      Unmatured debt
         Payable in Canadian currency
            Marketable bonds 469,039 485,385 16,346
            Treasury bills 180,689 161,889 -18,800
            Retail debt 7,481 6,405 -1,076
 
            Subtotal 657,209 653,679 -3,530
      Payable in foreign currencies 10,802 12,519 1,717
      Cross-currency swap revaluation -3,419 2,257 5,676
      Unamortized discounts and premiums on market debt -2,156 -1,727 429
      Obligations related to capital leases and other unmatured debt 4,564 4,525 -39
 
      Total unmatured debt 667,000 671,253 4,253
     Pension and other liabilities  
         Public sector pensions 151,667 152,412 745
         Other employee and veteran future benefits 67,301 71,076 3,775
         Other liabilities 6,046 5,905 -141
 
         Total pension and other liabilities 225,014 229,393 4,379
 
      Total interest-bearing debt 892,014 900,646 8,632
 
   Total liabilities 1,010,758 1,014,656 3,898
Financial assets
   Cash and accounts receivable 124,154 136,578 12,424
   Foreign exchange accounts 58,759 68,544 9,785
   Loans, investments, and advances (net of allowances)1 156,482 130,470 -26,012
 
   Total financial assets 339,395 335,592 -3,803
 
Net debt 671,363 679,064 7,701
Non-financial assets 68,922 69,194 272
 
Federal debt (accumulated deficit) 602,441 609,870 7,429
Note: Totals may not add due to rounding.
1 January 31, 2014 amount includes $3.1 billion in other comprehensive income from enterprise Crown corporations and other government business enterprises for the April 2013 to January 2014 period.

Note: Unless otherwise noted, changes in financial results are presented on a year-over-year basis.

For inquiries about this publication, contact Nicholas Leswick at 613-995-6391.

March 2014