The Fiscal Monitor
A publication of the Department of Finance

RSS

Highlights

September 2015: budgetary deficit of $1.2 billion

There was a budgetary deficit of $1.2 billion in September 2015, compared to a surplus of $0.4 billion in September 2014. Revenues decreased by $0.2 billion, or 1.1 per cent, as decreases in personal income tax revenues and other revenues were only partially offset by increases in other revenue streams. Program expenses were up $1.6 billion, or 8.0 per cent, reflecting increases in major transfers to persons and other levels of government and direct program expenses. Public debt charges decreased by $0.2 billion, or 8.9 per cent, reflecting a lower average effective interest rate on the stock of interest-bearing debt.

April to September 2015: budgetary surplus of $1.6 billion

For the April to September 2015 period of the 2015–16 fiscal year, the Government posted a budgetary surplus of $1.6 billion, compared to a deficit of $0.7 billion reported in the same period of 2014–15.

Revenues were up $10.9 billion, or 8.3 per cent, reflecting increases in all revenue streams. Program expenses were up $9.0 billion, or 7.7 per cent, reflecting increases in major transfers to persons and other levels of government and direct program expenses. Public debt charges were down $0.5 billion, or 3.2 per cent, largely reflecting a lower average effective interest rate on the stock of interest-bearing debt.

September 2015

PDF Version [305 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 deficit of $1.2 billion in September 2015, compared to a surplus of $0.4 billion in September 2014.

Revenues in September 2015 totalled $22.0 billion, down $0.2 billion, or 1.1 per cent, from September 2014.

  • Personal income tax revenues were down $0.6 billion, or 5.5 per cent.
  • Corporate income tax revenues were up $0.4 billion, or 12.7 per cent.
  • Non-resident income tax revenues were up $0.2 billion, or 60.4 per cent.
  • Excise taxes and duties were up $0.2 billion, or 4.8 per cent. Goods and Services Tax (GST) revenues and customs import duties each increased by $0.1 billion, energy taxes increased by $7 million, and other excise taxes and duties increased by $29 million.
  • Employment Insurance (EI) premium revenues were up $46 million, or 3.4 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 down $0.5 billion, or 18.8 per cent, due largely to a decrease in net profits from enterprise Crown corporations.

Program expenses in September 2015 were $21.2 billion, up $1.6 billion, or 8.0 per cent, from September 2014. 

  • Major transfers to persons, consisting of elderly, EI and children’s benefits, increased by $0.4 billion, or 6.0 per cent. Elderly benefits increased by $0.1 billion, or 2.6 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 $0.1 billion, or 8.2 per cent. Children’s benefits, which consist of the Canada Child Tax Benefit and the Universal Child Care Benefit (UCCB), increased by $0.4 billion, or 36.3 per cent, due mainly to the enhancement and expansion of the UCCB effective January 2015.     
  • 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 4.9 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 consolidated Crown corporations. Direct program expenses were up $1.0 billion, or 11.4 per cent. Within direct program expenses:
    • Transfer payments increased by $0.4 billion, or 16.0 per cent, due mainly to timing factors.
    • Other direct program expenses increased by $0.6 billion, or 9.4 per cent, reflecting in part an increase in pension and other employee and veteran future benefit expenses based on the Government’s latest actuarial valuations.

Public debt charges decreased by $0.2 billion, or 8.9 per cent, reflecting a lower average effective interest rate on the stock of interest-bearing debt.

April to September 2015

For the April to September 2015 period of the 2015–16 fiscal year, there was a budgetary surplus of $1.6 billion, compared to a deficit of $0.7 billion reported in the same period of 2014–15.

Revenues increased by $10.9 billion, or 8.3 per cent, to $141.3 billion.

  • Personal income tax revenues were up $2.2 billion, or 3.4 per cent. 
  • Corporate income tax revenues were up $3.3 billion, or 21.6 per cent, largely reflecting assessments and reassessments for prior tax years.
  • Non-resident income tax revenues were up $0.5 billion, or 17.9 per cent. 
  • Excise taxes and duties were up $2.1 billion, or 8.7 per cent. GST revenues were up $1.5 billion, or 9.3 per cent. Customs import duties were up $0.4 billion, and energy taxes and other excise taxes and duties were each up $0.1 billion. 
  • EI premium revenues were up $0.4 billion, or 3.7 per cent, reflecting growth in earnings.
  • Other revenues were up $2.4 billion, or 18.2 per cent, primarily reflecting the gain realized on the sale of the Government’s remaining holdings of General Motors common shares in April 2015.

For the April to September 2015 period, program expenses were $125.9 billion, up $9.0 billion, or 7.7 per cent, from the same period the previous year. 

  • Major transfers to persons were up $4.0 billion, or 10.9 per cent. Elderly benefits increased by $0.9 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 $0.6 billion, or 6.7 per cent. Children’s benefits were up $2.5 billion, or 38.5 per cent, largely reflecting increased benefits related to the expansion and enhancement of the UCCB.
  • Major transfers to other levels of government were up $1.4 billion, or 4.5 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 up $3.6 billion, or 7.3 per cent. Within direct program expenses:
    • Transfer payments increased by $0.6 billion, or 4.4 per cent.
    • Other direct program expenses increased by $2.9 billion, or 8.5 per cent, reflecting in large part an increase in pension and other employee and veteran future benefit expenses.

Public debt charges decreased by $0.5 billion, or 3.2 per cent, largely reflecting a lower average effective interest rate on the stock of interest-bearing debt.

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

Financial requirement of $15.3 billion for April to September 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 $1.6 billion and a requirement of $16.8 billion from non-budgetary transactions, there was a financial requirement of $15.3 billion for the April to September 2015 period, compared to a financial requirement of $2.0 billion for the same period the previous year.

Net financing activities up $25.7 billion

The Government financed this financial requirement of $15.3 billion and increased cash balances by $10.5 billion by increasing unmatured debt by $25.7 billion. The increase in unmatured debt was achieved primarily through the issuance of marketable bonds and treasury bills. 

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 2015 stood at $38.4 billion, up $8.4 billion from their level at the end of September 2014.

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

  2014 2015 2014–15 2015–16
Budgetary transactions        
  Revenues 22,227 21,981 130,474 141,336
  Expenses
    Program expenses -19,639 -21,217 -116,884 -125,882
    Public debt charges -2,209 -2,012 -14,334 -13,879
 

  Budgetary balance (deficit/surplus) 379 -1,248 -744 1,575
Non-budgetary transactions 1,508 -479 -1,257 -16,848
 

Financial source/requirement 1,887 -1,727 -2,001 -15,273
Net change in financing activities -1,807 3,387 5,939 25,741
 

Net change in cash balances 80 1,660 3,938 10,468
Cash balance at end of period 30,011 38,420
Note: Positive numbers indicate a net source of funds. Negative numbers indicate a net requirement for funds.
 
Table 2
Revenues
  September   April to September  
 
 
 
  2014
($ millions)
2015
($ millions)
Change
(%)
2014–15
($ millions)
2015–16
($ millions)
Change
(%)
Tax revenues            
  Income taxes            
    Personal income tax 10,873 10,280 -5.5 64,044 66,250 3.4
    Corporate income tax 2,822 3,180 12.7 15,139 18,407 21.6
    Non-resident income tax 399 640 60.4 2,616 3,085 17.9
 

    Total income tax 14,094 14,100 0.0 81,799 87,742 7.3
  Excise taxes and duties
    Goods and Services Tax 2,730 2,786 2.1 16,132 17,640 9.3
    Energy taxes 502 509 1.4 2,720 2,846 4.6
    Customs import duties 391 499 27.6 2,329 2,726 17.0
    Other excise taxes and duties 521 550 5.6 3,048 3,130 2.7
 

    Total excise taxes and duties 4,144 4,344 4.8 24,229 26,342 8.7
 

  Total tax revenues 18,238 18,444 1.1 106,028 114,084 7.6
Employment Insurance premiums 1,339 1,385 3.4 11,343 11,763 3.7
Other revenues 2,650 2,152 -18.8 13,103 15,489 18.2
 

Total revenues 22,227 21,981 -1.1 130,474 141,336 8.3
Note: Totals may not add due to rounding.
 
Table 3
Expenses
  September   April to September  
 
 
 
  2014
($ millions)
2015
($ millions)
Change
(%)
2014–15
($ millions)
2015–16
($ millions)
Change
(%)
Major transfers to persons            
  Elderly benefits 3,653 3,749 2.6 21,501 22,418 4.3
  Employment Insurance benefits 1,484 1,363 -8.2 8,784 9,376 6.7
  Children's benefits 1,108 1,510 36.3 6,472 8,963 38.5
 

  Total 6,245 6,622 6.0 36,757 40,757 10.9
Major transfers to other levels
  of government
  Support for health and other
    social programs
    Canada Health Transfer 2,676 2,835 5.9 16,057 17,013 6.0
    Canada Social Transfer 1,049 1,080 3.0 6,291 6,480 3.0
 

    Total 3,725 3,915 5.1 22,348 23,493 5.1
  Fiscal arrangements and other transfers1 1,625 1,687 3.8 10,452 10,796 3.3
  Canada's cities and communities 0 0 n/a 987 979 -0.8
  Quebec Abatement -376 -386 2.7 -2,255 -2,308 2.4
 

  Total 4,974 5,216 4.9 31,532 32,960 4.5
Direct program expenses
  Transfer payments
    Aboriginal Affairs and
      Northern Development
353 417 18.1 2,833 3,105 9.6
    Agriculture and Agri-Food 116 188 62.1 302 543 79.8
    Employment and Social Development 584 476 -18.5 2,498 2,615 4.7
    Foreign Affairs, Trade and Development 115 462 301.7 935 1,262 35.0
    Health 332 334 0.6 1,593 1,594 0.1
    Industry 157 208 32.5 1,064 1,161 9.1
    Other1 895 876 -2.1 4,946 4,521 -8.6
 

    Total 2,552 2,961 16.0 14,171 14,801 4.4
  Other direct program expenses
    Crown corporations 558 720 29.0 3,386 4,073 20.3
    National Defence 1,638 1,966 20.0 9,754 10,775 10.5
    All other departments
      and agencies
3,672 3,732 1.6 21,284 22,516 5.8
 

    Total other direct program expenses 5,868 6,418 9.4 34,424 37,364 8.5
 

  Total direct program expenses 8,420 9,379 11.4 48,595 52,165 7.3
 

Total program expenses 19,639 21,217 8.0 116,884 125,882 7.7
Public debt charges 2,209 2,012 -8.9 14,334 13,879 -3.2
 

Total expenses 21,848 23,229 6.3 131,218 139,761 6.5

Note: Totals may not add due to rounding.
1 Comparative figures have been reclassified to conform to the presentation in the 2014-15 Consolidated Financial Statements of the Government of Canada.

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

  2014 2015 2014–15 2015–16
Budgetary balance (deficit/surplus) 379 -1,248 -744 1,575
Non-budgetary transactions
  Capital investment activities -330 -427 -1,599 -1,803
  Other investing activities -1,567 -1,874 2,902 -3,041
  Pension and other accounts 248 711 688 2,573
  Other activities    
    Accounts payable, receivables, accruals and allowances 3,300 2,580 -7,207 -10,818
    Foreign exchange activities -423 -1,836 1,941 -5,983
    Amortization of tangible capital assets 280 367 2,018 2,224
 

    Total other activities 3,157 1,111 -3,248 -14,577
 

  Total non-budgetary transactions 1,508 -479 -1,257 -16,848
 

Financial source/requirement 1,887 -1,727 -2,001 -15,273
Note: Totals may not add due to rounding.
 
Table 5
Financial source/requirement and net financing activities
$ millions
  September April to September
 

  2014 2015 2014–15 2015–16
Financial source/requirement 1,887 -1,727 -2,001 -15,273
Net increase (+)/decrease (-) in financing activities
  Unmatured debt transactions
    Canadian currency borrowings
      Marketable bonds 3,059 855 8,635 5,138
      Treasury bills -4,000 2,200 200 13,600
      Retail debt -22 -7 -165 -108
 

      Total -963 3,048 8,670 18,630
    Foreign currency borrowings -1,788 -546 -2,011 2,937
 

    Total -2,751 2,502 6,659 21,567
    Cross-currency swap revaluation 992 811 -387 3,835
    Unamortized discounts and premiums on market debt -31 61 -35 445
    Obligations related to capital leases and other unmatured debt -17 13 -298 -106
 

  Net change in financing activities -1,807 3,387 5,939 25,741
Change in cash balance 80 1,660 3,938 10,468
Note: Totals may not add due to rounding.
 
Table 6
Condensed statement of assets and liabilities
$ millions
March 31,
2015
September 30,
2015
Change
Liabilities
   Accounts payable and accrued liabilities 123,631 108,306 -15,325
   Interest-bearing debt
      Unmatured debt
         Payable in Canadian currency
            Marketable bonds 487,881 493,019 5,138
            Treasury bills 135,692 149,292 13,600
            Retail debt 5,660 5,552 -108
 
            Subtotal 629,233 647,863 18,630
      Payable in foreign currencies 20,267 23,204 2,937
      Cross-currency swap revaluation 6,669 10,504 3,835
      Unamortized discounts and premiums on market debt 4,296 4,741 445
      Obligations related to capital leases and other unmatured debt 4,715 4,609 -106
 
      Total unmatured debt 665,180 690,921 25,741
     Pension and other liabilities  
         Public sector pensions 152,664 152,248 -416
         Other employee and veteran future benefits 76,140 79,081 2,941
         Other liabilities 6,002 6,050 48
 
         Total pension and other liabilities 234,806 237,379 2,573
 
      Total interest-bearing debt 899,986 928,300 28,314
 
   Total liabilities 1,023,617 1,036,606 12,989
Financial assets
   Cash and accounts receivable 136,696 142,657 5,961
   Foreign exchange accounts 85,018 91,001 5,983
   Loans, investments, and advances (net of allowances)1 113,681 115,314 1,633
   Public sector pension assets 1,263 1,263 0
 
   Total financial assets 336,658 350,235 13,577
 
Net debt 686,959 686,371 -588
Non-financial assets 74,629 74,208 -421
 
Federal debt (accumulated deficit) 612,330 612,163 -167
Note: Totals may not add due to rounding.
1 September 30, 2015 amount includes $1.4 billion in other comprehensive losses from enterprise Crown corporations and other government business enterprises for the April to September 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.

November 2015