The Fiscal Monitor
A publication of the Department of Finance

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February 2015: budgetary surplus of $4.6 billion

There was a budgetary surplus of $4.6 billion in February 2015, down $0.6 billion from the budgetary surplus reported for February 2014. Revenues decreased by $0.6 billion, or 2.2 per cent, reflecting decreases in most tax revenue streams. Program expenses increased by $0.3 billion, or 1.7 per cent, reflecting increases in major transfers to persons and other levels of government, offset in part by a decrease in direct program expenses. Public debt charges decreased by $0.4 billion, or 16.3 per cent, largely reflecting lower Consumer Price Index adjustments on Real Return Bonds.

April 2014 to February 2015: budgetary surplus of $5.9 billion

For the April to February period of the 2014–15 fiscal year, the Government posted a budgetary surplus of $5.9 billion, compared to a deficit of $4.8 billion reported for the same period of 2013–14. Revenues were up $7.1 billion, or 2.9 per cent, reflecting increases in most revenue streams. Program expenses were down $2.5 billion, or 1.1 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 $1.1 billion, or 4.3 per cent, largely reflecting a lower average effective interest rate on bonds.

February 2015

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There was a budgetary surplus of $4.6 billion in February 2015, down $0.6 billion from the budgetary surplus reported for February 2014. 

Revenues in February 2015 totalled $26.6 billion, down $0.6 billion, or 2.2 per cent, from February 2014.

  • Personal income tax revenues were down $0.2 billion, or 2.1 per cent, reflecting timing issues which lowered the February 2015 results.
  • Corporate income tax revenues were down $0.4 billion, or 5.9 per cent.
  • Non-resident income tax revenues were up $12 million, or 2.5 per cent.
  • Excise taxes and duties were down $0.2 billion, or 4.5 per cent. Goods and Services Tax (GST) revenues decreased by $0.2 billion, energy taxes increased by $4 million, customs import duties increased by $45 million, and other excise taxes and duties decreased by $26 million.
  • Employment Insurance (EI) premium revenues were up $0.1 billion, or 4.7 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 4.5 per cent.

Program expenses in February 2015 were $20.2 billion, up $0.3 billion, or 1.7 per cent, from February 2014. 

  • Major transfers to persons, consisting of elderly, EI and children’s benefits, increased by $0.2 billion, or 2.7 per cent. Elderly benefits increased by $0.2 billion, or 6.0 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 $5 million, or 0.3 per cent. Children’s benefits, which consist of the Canada Child Tax Benefit and the Universal Child Care Benefit, decreased by $49 million, or 4.5 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 increased by $0.2 billion, or 4.7 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 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 $0.1 billion, or 0.6 per cent. Within direct program expenses:
    • Transfer payments increased by $18 million, or 0.7 per cent.
    • Other direct program expenses decreased by $0.1 billion, or 1.2 per cent.

Public debt charges decreased by $0.4 billion, or 16.3 per cent, largely reflecting lower Consumer Price Index adjustments on Real Return Bonds.

April 2014 to February 2015

For the April to February period of the 2014–15 fiscal year, there was a budgetary surplus of $5.9 billion, compared to a deficit of $4.8 billion reported during the same period of 2013–14. 

Revenues increased by $7.1 billion, or 2.9 per cent, to $249.9 billion.

  • Personal income tax revenues were up $2.6 billion, or 2.2 per cent. 
  • Corporate income tax revenues were up $1.8 billion, or 5.7 per cent.
  • Non-resident income tax revenues were down $0.2 billion, or 3.9 per cent. 
  • Excise taxes and duties were up $1.3 billion, or 3.0 per cent. GST revenues increased by $0.5 billion, or 1.8 per cent, energy taxes by $0.1 billion, customs import duties by $0.3 billion, and other excise taxes and duties by $0.4 billion. 
  • EI premium revenues were up $0.8 billion, or 4.0 per cent, reflecting growth in earnings.
  • Other revenues were up $0.9 billion, or 3.6 per cent.

Program expenses were $219.3 billion, down $2.5 billion, or 1.1 per cent, from the same period the previous year. 

  • Major transfers to persons were up $1.9 billion, or 2.9 per cent. Elderly benefits increased by $1.7 billion, or 4.5 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 2.5 per cent, and children’s benefits were down $0.2 billion, or 1.7 per cent.  
  • Major transfers to other levels of government were up $2.1 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 $6.5 billion, or 6.5 per cent. Within direct program expenses:
    • Transfer payments decreased by $3.5 billion, or 11.0 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 $3.0 billion, or 4.4 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 $1.1 billion, or 4.3 per cent, largely reflecting a lower average effective interest rate on bonds.

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

Financial requirement of $3.8 billion for April 2014 to February 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 $5.9 billion and a financial requirement of $9.7 billion from non-budgetary transactions, there was a financial requirement of $3.8 billion for the April 2014 to February 2015 period, compared to a financial source of $8.6 billion for the same period the previous year. 

Net financing activities up $6.1 billion

The Government financed its financial requirement of $3.8 billion and increased cash balances by $2.3 billion by increasing unmatured debt by $6.1 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 February 2015 stood at $28.4 billion, down $1.9 billion from their level at the end of February 2014. 

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

  20141 2015 2013–141 2014–15
Budgetary transactions        
  Revenues 27,231 26,641 242,817 249,923
  Expenses
    Program expenses -19,876 -20,214 -221,756 -219,273
    Public debt charges -2,151 -1,801 -25,823 -24,715
 

  Budgetary balance (deficit/surplus) 5,204 4,626 -4,762 5,935
Non-budgetary transactions -567 -2,351 13,408 -9,733
 

Financial source/requirement 4,637 2,275 8,646 -3,798
Net change in financing activities -6,397 -10,651 -2,718 6,117
 

Net change in cash balances -1,760 -8,376 5,928 2,319
Cash balance at end of period 30,242 28,391
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
  February   April to February  
 
 
 
  2014
($ millions)
2015
($ millions)
Change
(%)
2013–14
($ millions)
2014–15
($ millions)
Change
(%)
Tax revenues            
  Income taxes            
    Personal income tax 11,635 11,393 -2.1 119,440 122,051 2.2
    Corporate income tax 6,945 6,533 -5.9 31,673 33,482 5.7
    Non-resident income tax 487 499 2.5 5,941 5,712 -3.9
 

    Total income tax 19,067 18,425 -3.4 157,054 161,245 2.7
  Excise taxes and duties
    Goods and Services Tax 2,351 2,168 -7.8 28,389 28,912 1.8
    Energy taxes 457 461 0.9 4,993 5,072 1.6
    Customs import duties 345 390 13.0 3,900 4,165 6.8
    Other excise taxes and duties 409 383 -6.4 4,907 5,316 8.3
 

    Total excise taxes and duties 3,562 3,402 -4.5 42,189 43,465 3.0
 

  Total tax revenues 22,629 21,827 -3.5 199,243 204,710 2.7
Employment Insurance premiums 2,594 2,715 4.7 19,173 19,935 4.0
Other revenues 2,008 2,099 4.5 24,401 25,278 3.6
 

Total revenues 27,231 26,641 -2.2 242,817 249,923 2.9
Note: Totals may not add due to rounding.
 
Table 3
Expenses
  February   April to February  
 
 
 
  2014
($ millions)
2015
($ millions)
Change
(%)
2013–14
($ millions)
2014–15
($ millions)
Change
(%)
Major transfers to persons            
  Elderly benefits 3,533 3,745 6.0 38,271 39,977 4.5
  Employment Insurance benefits 1,685 1,690 0.3 15,858 16,255 2.5
  Children's benefits 1,092 1,043 -4.5 12,073 11,864 -1.7
 

  Total 6,310 6,478 2.7 66,202 68,096 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 27,999 29,438 5.1
    Canada Social Transfer 1,018 1,048 2.9 11,197 11,533 3.0
 

    Total 3,563 3,724 4.5 39,196 40,971 4.5
  Fiscal arrangements and other transfers 1,565 1,625 3.8 17,917 18,547 3.5
  Canada's cities and communities 29 26 -10.3 1,997 1,958 -2.0
  Quebec Abatement -348 -340 -2.3 -3,866 -4,098 6.0
 

  Total 4,809 5,035 4.7 55,244 57,378 3.9
Direct program expenses
  Transfer payments
    Aboriginal Affairs and
      Northern Development
392 526 34.2 5,109 5,492 7.5
    Agriculture and Agri-Food 274 109 -60.2 1,222 873 -28.6
    Employment and Social Development 474 410 -13.5 5,271 5,168 -2.0
    Foreign Affairs, Trade and Development 314 427 36.0 2,549 2,393 -6.1
    Health 101 100 -1.0 2,490 2,630 5.6
    Industry 194 170 -12.4 2,221 1,985 -10.6
    Other 788 813 3.2 13,300 10,082 -24.2
 

    Total 2,537 2,555 0.7 32,162 28,623 -11.0
  Other direct program expenses
    Crown corporations 579 811 40.1 6,813 6,923 1.6
    National Defence 1,761 1,752 -0.5 18,575 18,378 -1.1
    All other departments
      and agencies
3,880 3,583 -7.7 42,760 39,875 -6.7
 

    Total other direct program expenses 6,220 6,146 -1.2 68,148 65,176 -4.4
 

  Total direct program expenses 8,757 8,701 -0.6 100,310 93,799 -6.5
 

Total program expenses 19,876 20,214 1.7 221,756 219,273 -1.1
Public debt charges1 2,151 1,801 -16.3 25,823 24,715 -4.3
 

Total expenses 22,027 22,015 -0.1 247,579 243,988 -1.5

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
  February April to February
 

  2014 2015 2013–14 2014–15
Budgetary balance (deficit/surplus) 5,204 4,626 -4,762 5,935
Non-budgetary transactions
  Capital investment activities -248 -636 -3,652 -3,549
  Other investing activities 7,686 -67 36,809 3,101
  Pension and other accounts 379 358 4,758 2,104
  Other activities    
    Accounts payable, receivables, accruals and allowances -4,289 -3,286 -13,759 -6,917
    Foreign exchange activities -4,372 936 -14,157 -7,884
    Amortization of tangible capital assets 277 344 3,409 3,412
 

    Total other activities -8,384 -2,006 -24,507 -11,389
 

  Total non-budgetary transactions -567 2,351 13,408 -9,733
 

Financial source/requirement 4,637 2,275 8,646 -3,798
Note: Totals may not add due to rounding.
 
Table 5
Financial source/requirement and net financing activities
$ millions
  February April to February
 

  2014 2015 2013–14 2014–15
Financial source/requirement 4,637 2,275 8,646 -3,798
Net increase (+)/decrease (-) in financing activities
  Unmatured debt transactions
    Canadian currency borrowings
      Marketable bonds -3,209 -5,903 13,137 10,098
      Treasury bills -7,100 -3,500 -25,900 -7,800
      Retail debt -60 -32 -1,136 -662
      Other 0 0 0 0
 

      Total -10,369 -9,435 -13,899 1,636
    Foreign currency borrowings 3,752 -483 5,469 -316
 

    Total -6,617 -9,918 -8,430 1,320
    Cross-currency swap revaluation 49 -1,131 5,725 4,218
    Unamortized discounts and premiums on market debt1 164 409 19 943
    Obligations related to capital leases and other unmatured debt 7 -11 -32 -364
 

  Net change in financing activities -6,397 -10,651 -2,718 6,117
Change in cash balance -1,760 -8,376 5,928 2,319
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
February 28,
2015
Change
Liabilities
   Accounts payable and accrued liabilities 111,421 117,840 6,419
   Interest-bearing debt
      Unmatured debt
         Payable in Canadian currency
            Marketable bonds 473,319 483,417 10,098
            Treasury bills 152,990 145,190 -7,800
            Retail debt 6,327 5,665 -662
 
            Subtotal 632,636 634,272 1,636
      Payable in foreign currencies 16,030 15,714 -316
      Cross-currency swap revaluation 2,326 6,544 4,218
      Unamortized discounts and premiums on market debt 3,184 4,127 943
      Obligations related to capital leases and other unmatured debt 4,782 4,418 -364
 
      Total unmatured debt 658,958 665,075 6,117
     Pension and other liabilities  
         Public sector pensions 153,083 152,722 -361
         Other employee and veteran future benefits 71,409 73,744 2,335
         Other liabilities 5,914 6,044 130
 
         Total pension and other liabilities 230,406 232,510 2,104
 
      Total interest-bearing debt 889,364 897,585 8,221
 
   Total liabilities 1,000,785 1,015,425 14,640
Financial assets
   Cash and accounts receivable 128,574 144,229 15,655
   Foreign exchange accounts 72,262 80,146 7,884
   Loans, investments, and advances (net of allowances)1 117,635 112,362 -5,273
 
   Total financial assets 318,471 336,737 18,266
 
Net debt 682,314 678,688 -3,626
Non-financial assets 70,433 70,570 137
 
Federal debt (accumulated deficit) 611,881 608,118 -3,763
Note: Totals may not add due to rounding.
1 February 28, 2015 amount includes $2.2 billion in other comprehensive losses from enterprise Crown corporations and other government business enterprises for the April 2014 to February 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.

April 2015