The Fiscal Monitor
A publication of the Department of Finance

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November 2015: budgetary surplus of $0.4 billion

There was a budgetary surplus of $0.4 billion in November 2015, compared to a surplus of $0.6 billion in November 2014. Revenues increased by $1.1 billion, or 4.8 per cent, mainly reflecting higher corporate income tax revenues. Program expenses increased by $1.6 billion, or 8.1 per cent, primarily reflecting increases in major transfers to persons and direct program expenses. Public debt charges decreased by $0.3 billion, or 12.7 per cent, largely reflecting lower consumer price adjustments on Real Return Bonds.

April to November 2015: budgetary surplus of $1.0 billion

For the April to November 2015 period of the 2015–16 fiscal year, the Government posted a budgetary surplus of $1.0 billion, compared to a deficit of $3.3 billion reported in the same period of 2014–15. Revenues were up $14.2 billion, or 8.2 per cent, reflecting increases in all revenue sources. Program expenses were up $10.7 billion, or 6.8 per cent, reflecting increases in major transfers to persons and other levels of government and direct program expenses. Public debt charges were down $0.9 billion, or 4.7 per cent, largely reflecting a lower average effective interest rate on bonds.

November 2015

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There was a budgetary surplus of $0.4 billion in November 2015, compared to a surplus of $0.6 billion in November 2014.

Revenues in November 2015 totalled $23.9 billion, up $1.1 billion or 4.8 per cent, from November 2014.

  • Personal income tax revenues were up $0.1 billion, or 0.4 per cent.
  • Corporate income tax revenues were up $1.3 billion, or 55.2 per cent.
  • Non-resident income tax revenues were up $24 million, or 5.1 per cent.
  • Excise taxes and duties were down $0.1 billion, or 2.3 per cent. Goods and Services Tax (GST) revenues decreased by $0.2 billion, energy taxes by $8 million, and other excise taxes and duties by $7 million. Customs import duties increased by $0.1 billion.
  • Employment Insurance (EI) premium revenues were up $34 million, or 3.3 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 $0.2 billion or 8.4 per cent.

Program expenses in November 2015 were $21.5 billion, up $1.6 billion, or 8.1 per cent, from November 2014. 

  • Major transfers to persons, consisting of elderly, EI and children’s benefits, increased by $0.8 billion, or 12.4 per cent. Elderly benefits increased by $0.2 billion, or 5.3 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 $0.2 billion, or 12.4 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 35.5 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 4.0 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 up $0.6 billion, or 7.5 per cent. Within direct program expenses:
    • Transfer payments decreased by $0.1 billion, or 3.3 per cent.
    • Other direct program expenses increased by $0.7 billion, or 12.2 per cent.

Public debt charges decreased by $0.3 billion, or 12.7 per cent, largely reflecting lower consumer price adjustments on Real Return Bonds.

April to November 2015

For the April to November 2015 period of the 2015–16 fiscal year, there was a budgetary surplus of $1.0 billion, compared to a deficit of $3.3 billion reported during the same period of 2014–15.

Revenues increased by $14.2 billion, or 8.2 per cent, to $187.2 billion.

  • Personal income tax revenues were up $3.8 billion, or 4.5 per cent. 
  • Corporate income tax revenues were up $4.7 billion, or 23.1 per cent, largely reflecting assessments and reassessments for prior tax years as well as the timing of current-year tax instalments. Corporations are generally required to remit monthly instalment payments for the current year based on either their previous year’s actual tax liability or their current year’s projected tax liability. This practice can introduce a lag in the impact of economic events on monthly corporate income tax revenues, which will only unwind near the end of the fiscal year.
  • Non-resident income tax revenues were up $0.3 billion, or 7.8 per cent. 
  • Excise taxes and duties were up $2.7 billion, or 8.4 per cent. GST revenues increased by $1.9 billion, or 8.8 per cent, energy taxes by $0.1 billion, customs import duties by $0.6 billion, and other excise taxes and duties by $0.1 billion. 
  • EI premium revenues were up $0.5 billion, or 3.6 per cent, reflecting growth in earnings.
  • Other revenues were up $2.2 billion, or 12.5 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 November 2015 period, program expenses were $168.3 billion, up $10.7 billion, or 6.8 per cent, from the same period the previous year. 

  • Major transfers to persons were up $5.4 billion, or 11.1 per cent. Elderly benefits increased by $1.3 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 $0.9 billion, or 7.5 per cent, and children’s benefits were up $3.3 billion, or 38.4 per cent, largely reflecting increased benefits related to the enhancement and expansion of the UCCB.  
  • Major transfers to other levels of government were up $1.5 billion, or 3.6 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 $3.7 billion, or 5.6 per cent. Within direct program expenses:
    • Transfer payments increased by $0.1 billion, or 0.5 per cent.
    • Other direct program expenses increased by $3.6 billion, or 7.8 per cent, reflecting in large part an increase in pension and other employee and veteran future benefit expenses.

Public debt charges decreased by $0.9 billion, or 4.7 per cent, largely reflecting a lower average effective interest rate on bonds.

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

Financial requirement of $12.7 billion for April to November 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 $1.0 billion and a financial requirement of $13.7 billion from non-budgetary transactions, there was a financial requirement of $12.7 billion for the April to November 2015 period, compared to a financial source of $0.3 billion for the same period the previous year. 

Net financing activities up $32.2 billion

The Government financed this financial requirement of $12.7 billion and increased cash balances by $19.5 billion by increasing unmatured debt by $32.2 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 November 2015 stood at $47.5 billion, up $13.7 billion from their level at the end of November 2014. 

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

  2014 2015 2014–15 2015–16
Budgetary transactions        
  Revenues 22,772 23,874 173,038 187,204
  Expenses
    Program expenses -19,926 -21,540 -157,614 -168,301
    Public debt charges -2,224 -1,942 -18,752 -17,876
 

  Budgetary balance (deficit/surplus) 622 392 -3,328 1,027
Non-budgetary transactions 197 2,079 3,657 -13,741
 

Financial source/requirement 819 2,471 329 -12,714
Net change in financing activities 685 4,388 7,358 32,217
 

Net change in cash balances 1,504 6,859 7,687 19,503
Cash balance at end of period 33,759 47,453
Note: Positive numbers indicate a net source of funds. Negative numbers indicate a net requirement for funds.
 
Table 2
Revenues
  November   April to November  
 
 
 
  2014
($ millions)
2015
($ millions)
Change
(%)
2014–15
($ millions)
2015–16
($ millions)
Change
(%)
Tax revenues            
  Income taxes            
    Personal income tax 12,174 12,227 0.4 85,648 89,460 4.5
    Corporate income tax 2,329 3,615 55.2 20,285 24,963 23.1
    Non-resident income tax 467 491 5.1 3,646 3,929 7.8
 

    Total income tax 14,970 16,333 9.1 109,579 118,352 8.0
  Excise taxes and duties
    Goods and Services Tax 3,219 3,036 -5.7 21,542 23,439 8.8
    Energy taxes 476 468 -1.7 3,682 3,803 3.3
    Customs import duties 336 429 27.7 3,059 3,619 18.3
    Other excise taxes and duties 480 473 -1.5 3,994 4,113 3.0
 

    Total excise taxes and duties 4,511 4,406 -2.3 32,277 34,974 8.4
 

  Total tax revenues 19,481 20,739 6.5 141,856 153,326 8.1
Employment Insurance premiums 1,036 1,070 3.3 13,559 14,047 3.6
Other revenues 2,255 2,065 -8.4 17,623 19,831 12.5
 

Total revenues 22,772 23,874 4.8 173,038 187,204 8.2
Note: Totals may not add due to rounding.
 
Table 3
Expenses
  November   April to November  
 
 
 
  2014
($ millions)
2015
($ millions)
Change
(%)
2014–15
($ millions)
2015–16
($ millions)
Change
(%)
Major transfers to persons            
  Elderly benefits 3,659 3,852 5.3 28,836 30,087 4.3
  Employment Insurance benefits 1,457 1,638 12.4 11,422 12,274 7.5
  Children's benefits 1,122 1,520 35.5 8,656 11,978 38.4
 

  Total 6,238 7,010 12.4 48,914 54,339 11.1
Major transfers to other levels
  of government
  Support for health and other
    social programs
    Canada Health Transfer 2,676 2,836 6.0 21,409 22,683 6.0
    Canada Social Transfer 1,048 1,080 3.1 8,388 8,639 3.0
 

    Total 3,724 3,916 5.2 29,797 31,322 5.1
  Fiscal arrangements and other transfers1 1,625 1,687 3.8 13,737 14,172 3.2
  Canada's cities and communities 260 246 -5.4 1,849 1,597 -13.6
  Quebec Abatement -363 -395 8.8 -2,994 -3,165 5.7
 

  Total 5,246 5,454 4.0 42,389 43,926 3.6
Direct program expenses
  Transfer payments
    Aboriginal Affairs and
      Northern Development
440 449 2.0 4,044 4,224 4.5
    Agriculture and Agri-Food 215 198 -7.9 561 803 43.1
    Employment and Social Development 638 570 -10.7 3,589 3,603 0.4
    Foreign Affairs, Trade and Development 185 194 4.9 1,360 1,646 21.0
    Health 195 245 25.6 1,977 2,018 2.1
    Industry 111 169 52.3 1,436 1,552 8.1
    Other1 766 642 -16.2 6,716 5,934 -11.6
 

    Total 2,550 2,467 -3.3 19,683 19,780 0.5
  Other direct program expenses
    Crown corporations 742 716 -3.5 4,852 5,449 12.3
    National Defence 1,660 2,037 22.7 13,204 14,765 11.8
    All other departments
      and agencies
3,490 3,856 10.5 28,572 30,042 5.1
 

    Total other direct program expenses 5,892 6,609 12.2 46,628 50,256 7.8
 

  Total direct program expenses 8,442 9,076 7.5 66,311 70,036 5.6
 

Total program expenses 19,926 21,540 8.1 157,614 168,301 6.8
Public debt charges 2,224 1,942 -12.7 18,752 17,876 -4.7
 

Total expenses 22,150 23,482 6.0 176,366 186,177 5.6

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
  November April to November
 

  2014 2015 2014–15 2015–16
Budgetary balance (deficit/surplus) 622 392 -3,328 1,027
Non-budgetary transactions
  Capital investment activities -258 -372 -2,258 -2,682
  Other investing activities -709 -572 3,190 -4,362
  Pension and other accounts 237 287 1,140 3,166
  Other activities    
    Accounts payable, receivables, accruals and allowances 1,925 3,492 -1,143 -6,248
    Foreign exchange activities -1,243 -1,107 138 -6,523
    Amortization of tangible capital assets 245 351 2,590 2,908
 

    Total other activities 927 2,736 1,585 -9,863
 

  Total non-budgetary transactions 197 2,079 3,657 -13,741
 

Financial source/requirement 819 2,471 329 -12,714
Note: Totals may not add due to rounding.
 
Table 5
Financial source/requirement and net financing activities
$ millions
  November April to November
 

  2014 2015 2014–15 2015–16
Financial source/requirement 819 2,471 329 -12,714
Net increase (+)/decrease (-) in financing activities
  Unmatured debt transactions
    Canadian currency borrowings
      Marketable bonds -2,256 -2,025 15,775 13,485
      Treasury bills 2,600 6,700 -5,900 13,500
      Retail debt -571 -918 -788 -1,044
      Other 0 0 0 0
 

      Total -227 3,757 9,087 25,941
    Foreign currency borrowings 146 -148 -2,066 2,955
 

    Total -81 3,609 7,021 28,896
    Cross-currency swap revaluation 658 678 469 2,979
    Unamortized discounts and premiums on market debt 122 117 195 486
    Obligations related to capital leases and other unmatured debt -14 -16 -327 -144
 

  Net change in financing activities 685 4,388 7,358 32,217
Change in cash balance 1,504 6,859 7,687 19,503
Note: Totals may not add due to rounding.
 
Table 6
Condensed statement of assets and liabilities
$ millions
March 31,
2015
November 30,
2015
Change
Liabilities
   Accounts payable and accrued liabilities 123,631 117,496 -6,135
   Interest-bearing debt
      Unmatured debt
         Payable in Canadian currency
            Marketable bonds 487,881 501,366 13,485
            Treasury bills 135,692 149,192 13,500
            Retail debt 5,660 4,616 -1,044
 
            Subtotal 629,233 655,174 25,941
      Payable in foreign currencies 20,267 23,222 2,955
      Cross-currency swap revaluation 6,669 9,648 2,979
      Unamortized discounts and premiums on market debt 4,296 4,782 486
      Obligations related to capital leases and other unmatured debt 4,715 4,571 -144
 
      Total unmatured debt 665,180 697,397 32,217
     Pension and other liabilities  
         Public sector pensions 152,664 152,299 -365
         Other employee and veteran future benefits 76,140 79,945 3,805
         Other liabilities 6,002 5,728 -274
 
         Total pension and other liabilities 234,806 237,972 3,166
 
      Total interest-bearing debt 899,986 935,369 35,383
 
   Total liabilities 1,023,617 1,052,865 29,248
Financial assets
   Cash and accounts receivable 136,696 156,312 19,616
   Foreign exchange accounts 85,018 91,541 6,523
   Loans, investments, and advances (net of allowances)1 113,681 116,456 2,775
   Public sector pension assets 1,263 1,263 0
 
   Total financial assets 336,658 365,572 28,914
 
Net debt 686,959 687,293 334
Non-financial assets 74,629 74,403 -226
 
Federal debt (accumulated deficit) 612,330 612,890 560
Note: Totals may not add due to rounding.
1 November 30, 2015 amount includes $1.6 billion in other comprehensive losses from enterprise Crown corporations and other government business enterprises for the April to November 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.

January 2016