The Fiscal Monitor
A publication of the Department of Finance

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January 2015: budgetary surplus of $2.2 billion

There was a budgetary surplus of $2.2 billion in January 2015, virtually unchanged from the budgetary balance reported for January 2014. Revenues increased by $0.4 billion, or 1.5 per cent, largely reflecting higher personal income tax revenues, offset in part by a decrease in non-resident income tax revenues. Program expenses increased by $0.7 billion, or 3.4 per cent, reflecting increases in major transfers to persons and direct program expenses. Public debt charges decreased by $0.3 billion, or 13.9 per cent, largely reflecting a lower average effective interest rate on bonds.

April 2014 to January 2015: budgetary surplus of $1.3 billion

For the April 2014 to January 2015 period of the 2014–15 fiscal year, the Government posted a budgetary surplus of $1.3 billion, compared to a deficit of $10.0 billion reported for the same period of 2013–14. Revenues were up $7.7 billion, or 3.6 per cent, reflecting increases in most revenue streams. Program expenses were down $2.8 billion, or 1.4 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 $0.8 billion, or 3.2 per cent, largely reflecting a lower average effective interest rate on bonds.

January 2015

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There was a budgetary surplus of $2.2 billion in January 2015, virtually unchanged from the balance reported for January 2014. 

Revenues in January 2015 totalled $25.4 billion, up $0.4 billion, or 1.5 per cent, from January 2014.

  • Personal income tax revenues were up $0.9 billion, or 7.3 per cent.
  • Corporate income tax revenues were down $0.1 billion, or 3.2 per cent.
  • Non-resident income tax revenues were down $0.5 billion, or 31.9 per cent.
  • Excise taxes and duties were down $21 million, or 0.5 per cent, reflecting timing issues. Goods and Services Tax (GST) revenues decreased by $18 million, energy taxes decreased by $2 million, customs import duties decreased by $32 million, and other excise taxes and duties increased by $31 million.
  • Employment Insurance (EI) premium revenues were up $0.1 billion, or 3.9 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 down $31 million, or 1.4 per cent.    

Program expenses in January 2015 were $21.2 billion, up $0.7 billion, or 3.4 per cent, from January 2014. 

  • Major transfers to persons, consisting of elderly, EI and children’s benefits, increased by $0.2 billion, or 3.3 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 $22 million, or 1.3 per cent. Children’s benefits, which consist of the Canada Child Tax Benefit and the Universal Child Care Benefit, increased by $5 million, or 0.5 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 decreased by $9 million, or 0.2 per cent, as legislated growth in the Canada Health Transfer, the Canada Social Transfer, Equalization transfers and transfers to the territories was offset by a decrease in transfers to Canada’s cities and communities and an increase in the Quebec Abatement.
  • Direct program expenses include transfer payments to individuals and 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 up $0.5 billion, or 5.4 per cent. Within direct program expenses:
    • Transfer payments increased by $1.0 billion, or 33.6 per cent, largely reflecting increases in claims expenses and costs related to the Disaster Financial Assistance Arrangements.
    • Other direct program expenses decreased by $0.5 billion, or 7.3 per cent, reflecting in part a decrease in expenses related to pensions and other employee future benefits.

Public debt charges decreased by $0.3 billion, or 13.9 per cent, reflecting a lower average effective interest rate on bonds.

April 2014 to January 2015

For the April 2014 to January 2015 period of the 2014–15 fiscal year, there was a budgetary surplus of $1.3 billion, compared to a deficit of $10.0 billion reported during the same period of 2013–14.

Revenues increased by $7.7 billion, or 3.6 per cent, to $223.3 billion.

  • Personal income tax revenues were up $2.9 billion, or 2.6 per cent. 
  • Corporate income tax revenues were up $2.2 billion, or 9.0 per cent.
  • Non-resident income tax revenues were down $0.2 billion, or 4.4 per cent. 
  • Excise taxes and duties were up $1.4 billion, or 3.7 per cent. GST revenues increased by $0.7 billion, or 2.7 per cent, energy taxes by $0.1 billion, customs import duties by $0.2 billion, and other excise taxes and duties by $0.4 billion. 
  • EI premium revenues were up $0.6 billion, or 3.9 per cent, reflecting growth in earnings.
  • Other revenues were up $0.8 billion, or 3.5 per cent.

For the April 2014 to January 2015 period, program expenses were $199.1 billion, down $2.8 billion, or 1.4 per cent, from the same period the previous year. 

  • Major transfers to persons were up $1.7 billion, or 2.9 per cent. Elderly benefits increased by $1.5 billion, or 4.3 per cent, reflecting growth in the elderly population and changes in consumer prices, to which benefits are fully indexed. EI benefit payments increased by $0.4 billion, or 2.8 per cent, and children’s benefits were down $0.2 billion, or 1.5 per cent.  
  • Major transfers to other levels of government were up $1.9 billion, or 3.8 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 $6.5 billion, or 7.1 per cent. Within direct program expenses:
    • Transfer payments decreased by $3.6 billion, or 12.0 per cent, largely reflecting the one-time accrual in 2013–14 of a liability for disaster assistance related to the 2013 flood in Alberta. The decrease in transfer payments also reflects 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 $2.9 billion, or 4.7 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 $0.8 billion, or 3.2 per cent, largely reflecting a lower average effective interest rate on bonds.

 
Revenues and expenses (April 2014 to January 2015)
Revenues and expenses (April 2014 to January 2015) - For details, refer to preceding paragraphs.
Note: Totals may not add due to rounding.

Financial requirement of $6.1 billion for April 2014 to January 2015

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 surplus of $1.3 billion and a financial requirement of $7.4 billion from non-budgetary transactions, there was a financial requirement of $6.1 billion for the April 2014 to January 2015 period, compared to a financial source of $4.0 billion for the same period the previous year. 

Net financing activities up $16.8 billion

The Government financed the financial requirement of $6.1 billion and increased cash balances by $10.7 billion by increasing unmatured debt by $16.8 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 January 2015 stood at $36.8 billion, up $4.8 billion from their level at the end of January 2014. 

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

  20141 2015 2013–141 2014–15
Budgetary transactions        
  Revenues 25,046 25,416 215,586 223,282
  Expenses
    Program expenses -20,540 -21,233 -201,880 -199,059
    Public debt charges -2,290 -1,972 -23,672 -22,914
 

  Budgetary balance (deficit/surplus) 2,216 2,211 -9,966 1,309
Non-budgetary transactions 3,544 -8,985 13,975 -7,382
 

Financial source/requirement 5,760 -6,774 4,009 -6,073
Net change in financing activities -266 15,406 3,679 16,768
 

Net change in cash balances 5,494 8,632 7,688 10,695
Cash balance at end of period 32,002 36,768
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
  January   April to January  
 
 
 
  2014
($ millions)
2015
($ millions)
Change
(%)
2013–14
($ millions)
2014–15
($ millions)
Change
(%)
Tax revenues            
  Income taxes            
    Personal income tax 11,999 12,869 7.3 107,805 110,658 2.6
    Corporate income tax 2,885 2,793 -3.2 24,728 26,949 9.0
    Non-resident income tax 1,434 977 -31.9 5,454 5,213 -4.4
 

    Total income tax 16,318 16,639 2.0 137,987 142,820 3.5
  Excise taxes and duties
    Goods and Services Tax 2,602 2,584 -0.7 26,038 26,744 2.7
    Energy taxes 462 460 -0.4 4,536 4,610 1.6
    Customs import duties 389 357 -8.2 3,555 3,775 6.2
    Other excise taxes and duties 393 424 7.9 4,498 4,934 9.7
 

    Total excise taxes and duties 3,846 3,825 -0.5 38,627 40,063 3.7
 

  Total tax revenues 20,164 20,464 1.5 176,614 182,883 3.5
Employment Insurance premiums 2,617 2,718 3.9 16,579 17,220 3.9
Other revenues 2,265 2,234 -1.4 22,393 23,179 3.5
 

Total revenues 25,046 25,416 1.5 215,586 223,282 3.6
Note: Totals may not add due to rounding.
 
Table 3
Expenses
  January   April to January  
 
 
 
  2014
($ millions)
2015
($ millions)
Change
(%)
2013–14
($ millions)
2014–15
($ millions)
Change
(%)
Major transfers to persons            
  Elderly benefits 3,519 3,696 5.0 34,738 36,232 4.3
  Employment Insurance benefits 1,651 1,673 1.3 14,173 14,565 2.8
  Children's benefits 1,058 1,063 0.5 10,981 10,821 -1.5
 

  Total 6,228 6,432 3.3 59,892 61,618 2.9
Major transfers to other levels
  of government
  Support for health and other
    social programs
    Canada Health Transfer 2,544 2,676 5.2 25,454 26,762 5.1
    Canada Social Transfer 1,018 1,049 3.0 10,179 10,485 3.0
 

    Total 3,562 3,725 4.6 35,633 37,247 4.5
  Fiscal arrangements and other transfers 1,582 1,640 3.7 16,352 16,922 3.5
  Canada's cities and communities 232 29 -87.5 1,968 1,932 -1.8
  Quebec Abatement -348 -375 7.8 -3,518 -3,758 6.8
 

  Total 5,028 5,019 -0.2 50,435 52,343 3.8
Direct program expenses
  Transfer payments
    Aboriginal Affairs and
      Northern Development
187 487 160.4 4,717 4,966 5.3
    Agriculture and Agri-Food 98 96 -2.0 948 764 -19.4
    Employment and Social Development 736 785 6.7 4,797 4,758 -0.8
    Foreign Affairs, Trade and Development 273 358 31.1 2,235 1,966 -12.0
    Health 244 298 22.1 2,389 2,530 5.9
    Industry 144 145 0.7 2,027 1,815 -10.5
    Other 1,199 1,679 40.0 12,512 9,269 -25.9
 

    Total 2,881 3,848 33.6 29,625 26,068 -12.0
  Other direct program expenses
    Crown corporations 647 626 -3.2 6,234 6,112 -2.0
    National Defence 1,840 1,551 -15.7 16,814 16,626 -1.1
    All other departments
      and agencies
3,916 3,757 -4.1 38,880 36,292 -6.7
 

    Total other direct program expenses 6,403 5,934 -7.3 61,928 59,030 -4.7
 

  Total direct program expenses 9,284 9,782 5.4 91,553 85,098 -7.1
 

Total program expenses 20,540 21,233 3.4 201,880 199,059 -1.4
Public debt charges1 2,290 1,972 -13.9 23,672 22,914 -3.2
 

Total expenses 22,830 23,205 1.6 225,552 221,973 -1.6

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
  January April to January
 

  2014 2015 2013–14 2014–15
Budgetary balance (deficit/surplus) 2,216 2,211 -9,966 1,309
Non-budgetary transactions
  Capital investment activities -335 -300 -3,404 -2,913
  Other investing activities 7,689 -607 29,123 3,168
  Pension and other accounts 366 261 4,379 1,746
  Other activities    
    Accounts payable, receivables, accruals and allowances -950 -1,418 -9,470 -3,631
    Foreign exchange activities -3,565 -7,046 -9,785 -8,820
    Amortization of tangible capital assets 339 125 3,132 3,068
 

    Total other activities -4,176 -8,339 -16,123 -9,383
 

  Total non-budgetary transactions 3,544 -8,985 13,975 -7,382
 

Financial source/requirement 5,760 -6,774 4,009 -6,073
Note: Totals may not add due to rounding.
 
Table 5
Financial source/requirement and net financing activities
$ millions
  January April to January
 

  2014 2015 2013–14 2014–15
Financial source/requirement 5,760 -6,774 4,009 -6,073
Net increase (+)/decrease (-) in financing activities
  Unmatured debt transactions
    Canadian currency borrowings
      Marketable bonds 6,092 6,753 16,346 16,001
      Treasury bills -9,200 2,200 -18,800 -4,300
      Retail debt -17 8 -1,076 -630
      Other 0 0 0 0
 

      Total -3,125 8,961 -3,530 11,071
    Foreign currency borrowings 764 1,690 1,717 167
 

    Total -2,361 10,651 -1,813 11,238
    Cross-currency swap revaluation 2,100 4,486 5,676 5,349
    Unamortized discounts and premiums on market debt1 -18 255 -145 534
    Obligations related to capital leases and other unmatured debt 13 14 -39 -353
 

  Net change in financing activities -266 15,406 3,679 16,768
Change in cash balance 5,494 8,632 7,688 10,695
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
January 31,
2015
Change
Liabilities
   Accounts payable and accrued liabilities 111,421 114,949 3,528
   Interest-bearing debt
      Unmatured debt
         Payable in Canadian currency
            Marketable bonds 473,319 489,320 16,001
            Treasury bills 152,990 148,690 -4,300
            Retail debt 6,327 5,697 -630
 
            Subtotal 632,636 643,707 11,071
      Payable in foreign currencies 16,030 16,197 167
      Cross-currency swap revaluation 2,326 7,675 5,349
      Unamortized discounts and premiums on market debt 3,184 3,718 534
      Obligations related to capital leases and other unmatured debt 4,782 4,429 -353
 
      Total unmatured debt 658,958 675,726 16,768
     Pension and other liabilities  
         Public sector pensions 153,083 152,720 -363
         Other employee and veteran future benefits 71,409 73,495 2,086
         Other liabilities 5,914 5,937 23
 
         Total pension and other liabilities 230,406 232,152 1,746
 
      Total interest-bearing debt 889,364 907,878 18,514
 
   Total liabilities 1,000,785 1,022,827 22,042
Financial assets
   Cash and accounts receivable 128,574 146,428 17,854
   Foreign exchange accounts 72,262 81,082 8,820
   Loans, investments, and advances (net of allowances)1 117,635 112,239 -5,396
 
   Total financial assets 318,471 339,749 21,278
 
Net debt 682,314 683,078 764
Non-financial assets 70,433 70,278 -155
 
Federal debt (accumulated deficit) 611,881 612,800 919
Note: Totals may not add due to rounding.
1 January 31, 2015 amount includes $2.2 billion in other comprehensive losses from enterprise Crown corporations and other government business enterprises for the April 2014 to January 2015 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.

March 2015