The Fiscal Monitor
A publication of the Department of Finance

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March 2015: budgetary deficit of $3.0 billion

There was a budgetary deficit of $3.0 billion in March 2015, down $3.7 billion from the budgetary deficit reported for March 2014. Revenues increased by $4.6 billion, or 18.6 per cent, reflecting significant increases in corporate income tax revenues and other revenues. Program expenses increased by $1.3 billion, or 4.5 per cent, reflecting increases in major transfers to persons and other levels of government and direct program expenses. Public debt charges decreased by $0.4 billion, or 16.6 per cent, largely reflecting a lower average effective interest rate on the stock of interest-bearing debt.

April 2014 to March 2015: budgetary surplus of $2.9 billion

For the April to March period of the 2014–15 fiscal year, the Government posted a budgetary surplus of $2.9 billion, compared to a deficit of $11.4 billion reported for the same period of 2013–14. Revenues were up $11.7 billion, or 4.4 per cent, reflecting increases in most revenue streams. Program expenses were down $1.2 billion, or 0.5 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 $1.5 billion, or 5.3 per cent, reflecting a lower average effective interest rate on interest-bearing debt.

The April 2014 to March 2015 monthly results are not the final results for the year as a whole. The final results will also reflect end-of-year adjustments that will be made once further information becomes available, including the accrual of tax revenues reflecting assessments of tax returns and valuation adjustments for assets and liabilities. In addition, these results do not include the fiscal impact of announced Government initiatives such as enhancements to the New Veterans Charter ($1.6 billion) and the Universal Child Care Benefit ($1.1 billion). The fiscal impact of these initiatives will be recorded once Bill C-59, the Economic Action Plan 2015 Act, No. 1, receives Royal Assent. Taking these and other expected year-end adjustments into account, results to date are broadly in line with a small deficit in 2014–15, as projected in Budget 2015. 

The Government will release the final audited outcome for 2014–15 in the Annual Financial Report of the Government of Canada in the fall.

March 2015

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There was a budgetary deficit of $3.0 billion in March 2015, down $3.7 billion from the budgetary deficit reported for March 2014.

Revenues in March 2015 totalled $29.1 billion, up $4.6 billion, or 18.6 per cent, from March 2014.

  • Personal income tax revenues were up $0.6 billion, or 5.5 per cent, reflecting timing issues which lowered February 2015 results but increased the March 2015 results.
  • After declining in January and February, corporate income tax revenues were up $2.4 billion, reflecting, in part, timing issues.
  • Non-resident income tax revenues were up $0.1 billion, or 10.6 per cent.
  • Excise taxes and duties were up $0.1 billion, or 2.5 per cent. Goods and Services Tax (GST) revenues increased by $14 million, energy taxes decreased by $0.1 billion, and customs import duties and other excise taxes and duties each increased by $0.1 billion.
  • Employment Insurance (EI) premium revenues were down $9 million, or 0.4 per cent, reflecting a one-time downward adjustment in March 2015 to incorporate updated information on EI premiums for the fiscal year as a whole.
  • 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 $1.4 billion, or 33.7 per cent, reflecting updated information on Crown corporations.

Program expenses in March 2015 were $30.2 billion, up $1.3 billion, or 4.5 per cent, from March 2014.

  • Major transfers to persons, consisting of elderly, EI and children’s benefits, increased by $0.6 billion, or 9.1 per cent. Elderly benefits increased by $0.2 billion, or 5.4 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 $0.6 billion, or 35.7 per cent. Children’s benefits, which consist of the Canada Child Tax Benefit and the Universal Child Care Benefit, decreased by $0.2 billion, or 12.1 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 $0.3 billion, or 6.3 per cent, reflecting legislated growth in the Canada Health Transfer, the Canada Social Transfer, Equalization transfers and transfers to the territories as well as a decrease in estimated recoveries under the Quebec Abatement, which are netted against major transfers to other levels of government. These increases were offset in part by a decrease in transfers to Canada’s cities and communities.
  • 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 $0.4 billion, or 2.1 per cent. Within direct program expenses:
    • Transfer payments increased by $0.8 billion, or 12.2 per cent, largely reflecting an increase in Aboriginal claims expenses.
    • Other direct program expenses decreased by $0.4 billion, or 3.7 per cent.

Public debt charges decreased by $0.4 billion, or 16.6 per cent, largely reflecting a lower average effective interest rate on the stock of interest-bearing debt.

April 2014 to March 2015

For the April to March period of the 2014–15 fiscal year, the Government posted a budgetary surplus of $2.9 billion, compared to a deficit of $11.4 billion reported for the same period of 2013–14.

Revenues increased by $11.7 billion, or 4.4 per cent, to $279.0 billion.

  • Personal income tax revenues were up $3.2 billion, or 2.5 per cent.
  • Corporate income tax revenues were up $4.3 billion, or 12.2 per cent.
  • Non-resident income tax revenues were down $0.2 billion, or 2.5 per cent.
  • Excise taxes and duties were up $1.4 billion, or 3.0 per cent. GST revenues increased by $0.5 billion, or 1.8 per cent, energy taxes by $10 million, customs import duties by $0.3 billion, and other excise taxes and duties by $0.5 billion.
  • EI premium revenues were up $0.8 billion, or 3.5 per cent, reflecting growth in earnings.
  • Other revenues were up $2.3 billion, or 7.9 per cent.

Program expenses were $249.4 billion, down $1.2 billion, or 0.5 per cent, from the same period the previous year.

  • Major transfers to persons were up $2.5 billion, or 3.4 per cent. Elderly benefits increased by $1.9 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 $1.0 billion, or 5.5 per cent, and children’s benefits were down $0.4 billion, or 2.8 per cent.  
  • Major transfers to other levels of government were up $2.5 billion, or 4.1 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 $6.1 billion, or 5.2 per cent. Within direct program expenses:
    • Transfer payments decreased by $2.8 billion, or 7.2 per cent, largely reflecting the one-time 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. These decreases were offset in part by an increase in Aboriginal claims expenses.
    • Other direct program expenses decreased by $3.4 billion, or 4.3 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 $1.5 billion, or 5.3 per cent, largely reflecting a lower average effective interest rate on the stock of interest-bearing debt.

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

Financial requirement of $4.3 billion for April 2014 to March 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 $2.9 billion and a financial requirement of $7.2 billion from non-budgetary transactions, there was a financial requirement of $4.3 billion for the April 2014 to March 2015 period, compared to a financial source of $15.5 billion for the same period the previous year. The change in the financial source/requirement over the previous year mainly reflects reduced repayments in 2014–15 of principal on assets maturing under the Insured Mortgage Purchase Program, offset in part by the improvement in the budgetary balance in 2014–15.

Net financing activities up $6.2 billion

The Government financed the financial requirement of $4.3 billion and increased cash balances by $1.9 billion by increasing unmatured debt by $6.2 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 March 2015 stood at $28.0 billion, up $1.9 billion from their level at the end of March 2014.

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

  20141 2015 2013–141 2014–15
Budgetary transactions        
  Revenues 24,530 29,099 267,347 279,022
  Expenses
    Program expenses -28,889 -30,176 -250,645 -249,449
    Public debt charges -2,298 -1,917 -28,121 -26,632
 

  Budgetary balance (deficit/surplus) -6,657 -2,994 -11,419 2,941
Non-budgetary transactions 13,481 2,517 26,889 -7,216
 

Financial source/requirement 6,824 -477 15,470 -4,275
Net change in financing activities -10,996 36 -13,714 6,153
 

Net change in cash balances -4,172 -441 1,756 1,878
Cash balance at end of period 26,072 27,952
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
  March   April to March  
 
 
 
  2014
($ millions)
2015
($ millions)
Change
(%)
2013–14
($ millions)
2014–15
($ millions)
Change
(%)
Tax revenues            
  Income taxes            
    Personal income tax 10,924 11,530 5.5 130,364 133,581 2.5
    Corporate income tax 3,294 5,741 74.3 34,967 39,223 12.2
    Non-resident income tax 602 666 10.6 6,543 6,378 -2.5
 

    Total income tax 14,820 17,937 21.0 171,874 179,182 4.3
  Excise taxes and duties
    Goods and Services Tax 2,072 2,086 0.7 30,461 30,998 1.8
    Energy taxes 444 374 -15.8 5,436 5,446 0.2
    Customs import duties 310 393 26.8 4,210 4,558 8.3
    Other excise taxes and duties 363 416 14.6 5,271 5,732 8.7
 

    Total excise taxes and duties 3,189 3,269 2.5 45,378 46,734 3.0
 

  Total tax revenues 18,009 21,206 17.8 217,252 225,916 4.0
Employment Insurance premiums 2,428 2,419 -0.4 21,601 22,354 3.5
Other revenues 4,093 5,474 33.7 28,494 30,752 7.9
 

Total revenues 24,530 29,099 18.6 267,347 279,022 4.4
Note: Totals may not add due to rounding.
 
Table 3
Expenses
  March   April to March  
 
 
 
  2014
($ millions)
2015
($ millions)
Change
(%)
2013–14
($ millions)
2014–15
($ millions)
Change
(%)
Major transfers to persons            
  Elderly benefits 3,591 3,786 5.4 41,862 43,763 4.5
  Employment Insurance benefits 1,567 2,127 35.7 17,425 18,382 5.5
  Children's benefits 1,348 1,185 -12.1 13,421 13,049 -2.8
 

  Total 6,506 7,098 9.1 72,708 75,194 3.4
Major transfers to other levels
  of government
  Support for health and other
    social programs
    Canada Health Transfer 2,544 2,676 5.2 30,543 32,114 5.1
    Canada Social Transfer 1,018 1,049 3.0 12,215 12,582 3.0
 

    Total 3,562 3,725 4.6 42,758 44,696 4.5
  Fiscal arrangements and other transfers 1,916 1,959 2.2 19,833 20,506 3.4
  Canada's cities and communities 110 15 -86.4 2,107 1,973 -6.4
  Quebec Abatement -357 -136 -61.9 -4,223 -4,234 0.3
 

  Total 5,231 5,563 6.3 60,475 62,941 4.1
Direct program expenses
  Transfer payments
    Aboriginal Affairs and
      Northern Development
1,051 1,952 85.7 6,160 7,444 20.8
    Agriculture and Agri-Food 317 417 31.5 1,539 1,290 -16.2
    Employment and Social Development 857 929 8.4 6,128 6,097 -0.5
    Foreign Affairs, Trade and Development 1,323 1,511 14.2 3,872 3,904 0.8
    Health 340 319 -6.2 2,830 2,949 4.2
    Industry 582 414 -28.9 2,803 2,399 -14.4
    Other 1,825 1,522 -16.6 15,125 11,604 -23.3
 

    Total 6,295 7,064 12.2 38,457 35,687 -7.2
  Other direct program expenses
    Crown corporations 632 1,303 106.2 7,445 8,226 10.5
    National Defence 4,051 3,426 -15.4 22,626 21,804 -3.6
    All other departments
      and agencies
6,174 5,722 -7.3 48,934 45,597 -6.8
 

    Total other direct program expenses 10,857 10,451 -3.7 79,005 75,627 -4.3
 

  Total direct program expenses 17,152 17,515 2.1 117,462 111,314 -5.2
 

Total program expenses 28,889 30,176 4.5 250,645 249,449 -0.5
Public debt charges1 2,298 1,917 -16.6 28,121 26,632 -5.3
 

Total expenses 31,187 32,093 2.9 278,766 276,081 -1.0

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
  March April to March
 

  2014 2015 2013–14 2014–15
Budgetary balance (deficit/surplus) -6,657 -2,994 -11,419 2,941
Non-budgetary transactions
  Capital investment activities -195 -253 -3,847 -3,802
  Other investing activities 3,861 -61 40,670 3,040
  Pension and other accounts 727 -86 5,485 2,018
  Other activities    
    Accounts payable, receivables, accruals and allowances 8,302 7,749 -5,457 832
    Foreign exchange activities 644 -4,872 -13,513 -12,756
    Amortization of tangible capital assets 142 40 3,551 3,452
 

    Total other activities 9,088 2,917 -15,419 -8,472
 

  Total non-budgetary transactions 13,481 2,517 26,889 -7,216
 

Financial source/requirement 6,824 -477 15,470 -4,275
Note: Totals may not add due to rounding.
 
Table 5
Financial source/requirement and net financing activities
$ millions
  March April to March
 

  2014 2015 2013–14 2014–15
Financial source/requirement 6,824 -477 15,470 -4,275
Net increase (+)/decrease (-) in financing activities
  Unmatured debt transactions
    Canadian currency borrowings
      Marketable bonds -8,864 4,397 4,273 14,495
      Treasury bills -1,800 -9,500 -27,700 -17,300
      Retail debt -55 -22 -1,191 -684
      Other 0 0 0 0
 

      Total -10,719 -5,125 -24,618 -3,489
    Foreign currency borrowings -242 4,553 5,227 4,237
 

    Total -10,961 -572 -19,391 748
    Cross-currency swap revaluation 20 125 5,745 4,343
    Unamortized discounts and premiums on market debt1 -76 169 -57 1,112
    Obligations related to capital leases and other unmatured debt 21 314 -11 -50
 

  Net change in financing activities -10,996 36 -13,714 6,153
Change in cash balance -4,172 -441 1,756 1,878
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
March 31,
2015
Change
Liabilities
   Accounts payable and accrued liabilities 111,421 120,001 8,580
   Interest-bearing debt
      Unmatured debt
         Payable in Canadian currency
            Marketable bonds 473,319 487,814 14,495
            Treasury bills 152,990 135,690 -17,300
            Retail debt 6,327 5,643 -684
 
            Subtotal 632,636 629,147 -3,489
      Payable in foreign currencies 16,030 20,267 4,237
      Cross-currency swap revaluation 2,326 6,669 4,343
      Unamortized discounts and premiums on market debt 3,184 4,296 1,112
      Obligations related to capital leases and other unmatured debt 4,782 4,732 -50
 
      Total unmatured debt 658,958 665,111 6,153
     Pension and other liabilities  
         Public sector pensions 153,083 152,408 -675
         Other employee and veteran future benefits 71,409 73,964 2,555
         Other liabilities 5,914 6,052 138
 
         Total pension and other liabilities 230,406 232,424 2,018
 
      Total interest-bearing debt 889,364 897,535 8,171
 
   Total liabilities 1,000,785 1,017,536 16,751
Financial assets
   Cash and accounts receivable 128,574 138,200 9,626
   Foreign exchange accounts 72,262 85,018 12,756
   Loans, investments, and advances (net of allowances)1 117,635 112,189 -5,446
 
   Total financial assets 318,471 335,407 16,936
 
Net debt 682,314 682,129 -185
Non-financial assets 70,433 70,783 350
 
Federal debt (accumulated deficit) 611,881 611,346 -535
Note: Totals may not add due to rounding.
1 March 31, 2015 amount includes $2.4 billion in other comprehensive losses from enterprise Crown corporations and other government business enterprises for the April 2014 to March 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.

May 2015