The Fiscal Monitor
A publication of the Department of Finance

RSS

Highlights

September 2014: budgetary surplus of $0.4 billion

There was a budgetary surplus of $0.4 billion in September 2014, compared to a deficit of $3.8 billion in September 2013. Revenues increased by $1.1 billion, or 5.4 per cent, primarily reflecting increased personal and corporate income tax revenues. Program expenses decreased by $2.9 billion, or 12.8 per cent, largely due to a decrease in direct program expenses, reflecting the recording in September 2013 of a liability for disaster assistance related to the 2013 flood in Alberta. Public debt charges decreased by $0.1 billion, or 5.4 per cent.

April to September 2014: budgetary deficit of $0.7 billion

For the April to September 2014 period of the 2014–15 fiscal year, the Government posted a budgetary deficit of $0.7 billion, compared to a deficit of $10.3 billion reported in the same period of 2013–14.

Revenues were up $5.5 billion, or 4.4 per cent, primarily reflecting increased personal and corporate income tax revenues. Program expenses were down $3.8 billion, or 3.2 per cent, reflecting a decrease in direct program expenses, offset in part by increases in major transfers to persons and other levels of government. Public debt charges were down $0.3 billion, or 1.8 per cent.

September 2014

PDF Version [170 KB]

To access a Portable Document Format (PDF) file you must have a PDF reader installed. If you do not already have such a reader, there are numerous PDF readers available for free download or for purchase on the Internet.

There was a budgetary surplus of $0.4 billion in September 2014, compared to a deficit of $3.8 billion in September 2013.

Revenues in September 2014 totalled $22.2 billion, up $1.1 billion, or 5.4 per cent, from September 2013.

  • Personal income tax revenues were up $0.3 billion, or 2.6 per cent.
  • Corporate income tax revenues were up $0.7 billion after being down $1.2 billion in August, reflecting monthly volatility.
  • Non-resident income tax revenues were up $0.1 billion, or 23.5 per cent.
  • Excise taxes and duties were up $0.1 billion, or 1.6 per cent. Goods and Services Tax (GST) revenues increased by $12 million, energy taxes by $2 million, customs import duties by $24 million, and other excise taxes and duties by $26 million.
  • Employment Insurance (EI) premium revenues were up $46 million, or 3.6 per cent, reflecting growth in 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 unchanged at $2.7 billion.

Program expenses in September 2014 were $19.6 billion, down $2.9 billion, or 12.8 per cent, from September 2013.

  • Major transfers to persons, consisting of elderly, EI and children’s benefits, increased by $0.3 billion, or 4.3 per cent. Elderly benefits increased by $0.2 billion, or 5.0 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 $0.1 billion, or 6.2 per cent. Children’s benefits, which consist of the Canada Child Tax Benefit and the Universal Child Care Benefit, decreased by $4 million, or 0.4 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 $0.2 billion, or 4.3 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 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, other departments and agencies, and expenses of Crown corporations. Direct program expenses were down $3.3 billion, or 28.4 per cent, from the previous year. Within direct program expenses:
    • Transfer payments decreased by $2.8 billion, or 52.0 per cent, reflecting the recording in September 2013 of a $2.8-billion liability for disaster assistance related to the 2013 flood in Alberta.
    • Other direct program expenses decreased by $0.6 billion, or 8.9 per cent.

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

April to September 2014

For the April to September 2014 period of the 2014–15 fiscal year, there was a budgetary deficit of $0.7 billion, compared to a deficit of $10.3 billion reported during the same period of 2013–14.

Revenues increased by $5.5 billion, or 4.4 per cent, to $130.5 billion.

  • Personal income tax revenues were up $2.5 billion, or 4.0 per cent.
  • Corporate income tax revenues were up $1.6 billion, or 11.5 per cent.
  • Non-resident income tax revenues were up $0.1 billion, or 3.4 per cent.
  • Excise taxes and duties were up $1.2 billion, or 5.1 per cent. GST revenues were up $0.6 billion or 3.8 per cent. Energy taxes were up $0.1 billion, customs import duties were up $0.2 billion, and other excise taxes and duties were up $0.3 billion.
  • EI premium revenues were up $0.4 billion, or 4.0 per cent, reflecting growth in earnings.
  • Other revenues were down $0.2 billion, or 1.8 per cent.

For the April to September 2014 period, program expenses were $116.9 billion, down $3.8 billion, or 3.2 per cent, from the same period the previous year. 

  • Major transfers to persons were up $1.0 billion, or 2.9 per cent. Elderly benefits increased by $0.8 billion, or 4.1 per cent, reflecting growth in the elderly population and changes in consumer prices, to which benefits are fully indexed. EI benefit payments increased by $0.3 billion, or 3.6 per cent, and children’s benefits were down $0.1 billion, or 1.9 per cent.  
  • Major transfers to other levels of government were up $1.2 billion, or 3.9 per cent, largely reflecting legislated growth in the Canada Health Transfer, the Canada Social Transfer, Equalization transfers and transfers to the territories.  
  • Direct program expenses were down $6.0 billion, or 11.0 per cent. Within direct program expenses:
    • Transfer payments decreased by $3.8 billion, or 21.1 per cent, largely reflecting the accrual in 2013–14 of a liability for disaster assistance related to the 2013 flood in Alberta, as well as a decrease in expenses associated with the revaluation of the Government’s liability to Ontario for the province’s one-third participation in the value of the Government’s equity holdings in General Motors.
    • Other direct program expenses decreased by $2.2 billion, or 6.1 per cent, due in large part to a decrease in pension and benefit costs based on the Government’s latest actuarial valuations.

Public debt charges decreased by $0.3 billion, or 1.8 per cent.

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

Financial requirement of $2.0 billion for April to September 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 $0.7 billion and a requirement of $1.3 billion from non-budgetary transactions, there was a financial requirement of $2.0 billion for the April to September 2014 period, compared to a financial requirement of $18.4 billion for the same period the previous year. 

Net financing activities up $5.9 billion

The Government financed this financial requirement of $2.0 billion and increased cash balances by $3.9 billion by increasing unmatured debt by $5.9 billion. The increase in unmatured 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 September 2014 stood at $30.0 billion, up $1.1 billion from their level at the end of September 2013.

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

  20131 2014 2013–141 2014–15
Budgetary transactions        
  Revenues 21,080 22,227 124,964 130,474
  Expenses
    Program expenses -22,517 -19,639 -120,712 -116,884
    Public debt charges -2,335 -2,209 -14,599 -14,334
 

  Budgetary balance (deficit/surplus) -3,772 379 -10,347 -744
Non-budgetary transactions 6,955 1,508 -8,044 -1,257
 

Financial source/requirement 3,183 1,887 -18,391 -2,001
Net change in financing activities -4,143 -1,807 23,034 5,939
 

Net change in cash balances -960 80 4,643 3,938
Cash balance at end of period 28,957 30,011
Note: Positive numbers indicate a net source of funds. Negative numbers indicate a net requirement for funds.
1 Certain comparative figures have been restated to reflect a change in the Government's accounting policy for bond buyback operations as reported in the Annual Financial Report of the Government of Canada for 2013–14.
 
Table 2
Revenues
  September   April to September  
 





  2013
($ millions)
2014
($ millions)
Change
(%)
2013–14
($ millions)
2014–15
($ millions)
Change
(%)
Tax revenues            
  Income taxes            
    Personal income tax 10,597 10,873 2.6 61,564 64,044 4.0
    Corporate income tax 2,137 2,822 32.1 13,574 15,139 11.5
    Non-resident income tax 323 399 23.5 2,531 2,616 3.4
 

    Total income tax 13,057 14,094 7.9 77,669 81,799 5.3
  Excise taxes and duties
    Goods and Services Tax 2,718 2,730 0.4 15,539 16,132 3.8
    Energy taxes 500 502 0.4 2,667 2,720 2.0
    Customs import duties 367 391 6.5 2,137 2,329 9.0
    Other excise taxes and duties 495 521 5.3 2,701 3,048 12.8
 

    Total excise taxes and duties 4,080 4,144 1.6 23,044 24,229 5.1
 

  Total tax revenues 17,137 18,238 6.4 100,713 106,028 5.3
Employment Insurance premiums 1,293 1,339 3.6 10,909 11,343 4.0
Other revenues 2,650 2,650 0.0 13,342 13,103 -1.8
 

Total revenues 21,080 22,227 5.4 124,964 130,474 4.4
Note: Totals may not add due to rounding.
 
Table 3
Expenses
  September   April to September  
 





  2013
($ millions)
2014
($ millions)
Change
(%)
2013–14
($ millions)
2014–15
($ millions)
Change
(%)
Major transfers to persons            
  Elderly benefits 3,480 3,653 5.0 20,659 21,501 4.1
  Employment Insurance benefits 1,397 1,484 6.2 8,475 8,784 3.6
  Children's benefits 1,112 1,108 -0.4 6,595 6,472 -1.9
 

  Total 5,989 6,245 4.3 35,729 36,757 2.9
Major transfers to other levels
  of government
  Support for health and other
    social programs
    Canada Health Transfer 2,545 2,676 5.1 15,267 16,057 5.2
    Canada Social Transfer 1,018 1,049 3.0 6,108 6,291 3.0
 

    Total 3,563 3,725 4.5 21,375 22,348 4.6
  Fiscal arrangements and other transfers 1,566 1,625 3.8 10,071 10,406 3.3
  Canada's cities and communities 0 0 n/a 1,015 987 -2.8
  Quebec Abatement -359 -376 4.7 -2,154 -2,255 4.7
 

  Total 4,770 4,974 4.3 30,307 31,486 3.9
Direct program expenses
  Transfer payments
    Aboriginal Affairs and
      Northern Development
398 353 -11.3 2,714 2,833 4.4
    Agriculture and Agri-Food 95 116 22.1 419 302 -27.9
    Employment and Social Development 445 584 31.2 2,591 2,498 -3.6
    Foreign Affairs, Trade and Development 156 115 -26.3 1,254 935 -25.4
    Health 371 332 -10.5 1,512 1,593 5.4
    Industry 196 157 -19.9 1,117 1,064 -4.7
    Other 3,654 895 -75.5 8,405 4,992 -40.6
 

    Total 5,315 2,552 -52.0 18,012 14,217 -21.1
  Other direct program expenses
    Crown corporations 466 558 19.7 3,812 3,386 -11.2
    National Defence 2,073 1,638 -21.0 10,125 9,754 -3.7
    All other departments
      and agencies
3,904 3,672 -5.9 22,727 21,284 -6.3
 

    Total other direct program expenses 6,443 5,868 -8.9 36,664 34,424 -6.1
 

  Total direct program expenses 11,758 8,420 -28.4 54,676 48,641 -11.0
 

Total program expenses 22,517 19,639 -12.8 120,712 116,884 -3.2
Public debt charges1 2,335 2,209 -5.4 14,599 14,334 -1.8
 

Total expenses 24,852 21,848 -12.1 135,311 131,218 -3.0

Note: Totals may not add due to rounding.
1 Comparative figures have been restated to reflect a change in the Government's accounting policy for bond buyback operations as reported in the Annual Financial Report of the Government of Canada for 2013–14.

 
Table 4
The budgetary balance and financial source/requirement
$ millions
  September April to September
 

  2013 2014 2013–14 2014–15
Budgetary balance (deficit/surplus) -3,772 379 -10,347 -744
Non-budgetary transactions
  Capital investment activities -412 -330 -1,763 -1,599
  Other investing activities -16 -1,567 2,168 2,902
  Pension and other accounts 1,277 248 2,552 688
  Other activities    
    Accounts payable, receivables, accruals and allowances 5,409 3,300 -10,104 -7,207
    Foreign exchange activities 299 -423 -3,122 1,941
    Amortization of tangible capital assets 398 280 2,225 2,018
 

    Total other activities 6,106 3,157 -11,001 -3,248
 

  Total non-budgetary transactions 6,955 1,508 -8,044 -1,257
 

Financial source/requirement 3,183 1,887 -18,391 -2,001
Note: Totals may not add due to rounding.

 
Table 5
Financial source/requirement and net financing activities
$ millions
  September April to September
 

  2013 2014 2013–14 2014–15
Financial source/requirement 3,183 1,887 -18,391 -2,001
Net increase (+)/decrease (-) in financing activities
  Unmatured debt transactions
    Canadian currency borrowings
      Marketable bonds -3,470 3,059 6,236 8,635
      Treasury bills 500 -4,000 15,200 200
      Retail debt -17 -22 -206 -165
      Other 0 0 0 0
 

      Total -2,987 -963 21,230 8,670
    Foreign currency borrowings -324 -1,788 372 -2,011
 

    Total -3,311 -2,751 21,602 6,659
    Cross-currency swap revaluation -736 992 1,743 -387
    Unamortized discounts and premiums on market debt1 -103 -31 -313 -35
    Obligations related to capital leases and other unmatured debt 7 -17 2 -298
 

  Net change in financing activities -4,143 -1,807 23,034 5,939
Change in cash balance -960 80 4,643 3,938
Note: Totals may not add due to rounding.
1 Comparative figures have been restated to reflect a change in the Government's accounting policy for bond buyback operations as reported in the Annual Financial Report of the Government of Canada for 2013–14.
 
Table 6
Condensed statement of assets and liabilities
$ millions
March 31,
2014
September 30,
2014
Change
Liabilities
   Accounts payable and accrued liabilities 111,421 100,453 -10,968
   Interest-bearing debt
      Unmatured debt
         Payable in Canadian currency
            Marketable bonds 473,319 481,954 8,635
            Treasury bills 152,990 153,190 200
            Retail debt 6,327 6,162 -165
 
            Subtotal 632,636 641,306 8,670
      Payable in foreign currencies 16,030 14,019 -2,011
      Cross-currency swap revaluation 2,326 1,939 -387
      Unamortized discounts and premiums on market debt 3,184 3,149 -35
      Obligations related to capital leases and other unmatured debt 4,782 4,484 -298
 
      Total unmatured debt 658,958 664,897 5,939
     Pension and other liabilities  
         Public sector pensions 153,083 152,659 -424
         Other employee and veteran future benefits 71,409 72,475 1,066
         Other liabilities 5,914 5,960 46
 
         Total pension and other liabilities 230,406 231,094 688
 
      Total interest-bearing debt 889,364 895,991 6,627
 
   Total liabilities 1,000,785 996,444 -4,341
Financial assets
   Cash and accounts receivable 128,574 128,751 177
   Foreign exchange accounts 72,262 70,321 -1,941
   Loans, investments, and advances (net of allowances)1 117,635 113,740 -3,895
 
   Total financial assets 318,471 312,812 -5,659
 
Net debt 682,314 683,632 1,318
Non-financial assets 70,433 70,014 -419
 
Federal debt (accumulated deficit) 611,881 613,618 1,737
Note: Totals may not add due to rounding.
1 September 30, 2014 amount includes $1.0 billion in other comprehensive losses from enterprise Crown corporations and other government business enterprises for the April to September 2014 period.

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

For inquiries about this publication, contact Glenn Purves at 613-369-5655.

November 2014