The Fiscal Monitor
A publication of the Department of Finance

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Introduction

The Fiscal Monitor provides an overview of monthly and year-to-date financial results for the Government of Canada. It is prepared in accordance with the same accounting policies used in the annual audited financial statements of the Government of Canada. Summary financial results reported in The Fiscal Monitor are based on financial transactions recorded in the Accounts of Canada, maintained by the Receiver General for Canada.

There can be significant volatility in monthly results due to the timing of revenue receipts and expense recognition. For instance, a large share of government spending is typically reported in the March Fiscal Monitor. For fiscal year 2015–16, while a surplus is expected for February, Budget 2016 projects that the cumulative budgetary balance will deteriorate to reach a year-end deficit of $5.4 billion.

In this context, the year-to-date cumulative surplus is expected to be overtaken by:

  • A significant deficit in March, as historically, a large share of total expenses is recorded in that month (see chart below).
  • Negative year-end adjustments relating to corporate income tax revenues, reflecting actual results for the 2015 tax year. Although the recent decline in oil prices is unprecedented, negative year-end adjustments have been recorded in previous years following periods of economic weakness.
  • The cost of measures undertaken to improve benefits for veterans announced in Budget 2016.
March budgetary balance
March budgetary balance - For details, refer to preceding paragraphs.
 

Highlights

January 2016: budgetary surplus of $1.1 billion

There was a budgetary surplus of $1.1 billion in January 2016, compared to a surplus of $2.2 billion in January 2015. Revenues increased by $1.4 billion, or 5.4 per cent, reflecting increases in most revenue streams. Program expenses increased by $2.5 billion, or 11.8 per cent, reflecting increases in major transfers to persons and other levels of government and direct program expenses. Public debt charges increased by $1 million, or 0.1 per cent.

April 2015 to January 2016: budgetary surplus of $4.3 billion

For the April 2015 to January 2016 period of the 2015–16 fiscal year, the Government posted a budgetary surplus of $4.3 billion, compared to a surplus of $1.3 billion reported for the same period of 2014–15. Revenues were up $15.6 billion, or 7.0 per cent, reflecting increases in all revenue streams. Program expenses were up $13.7 billion, or 6.9 per cent, reflecting increases in major transfers to persons and other levels of government and direct program expenses. Public debt charges were down $1.1 billion, or 4.8 per cent, largely reflecting lower average effective interest rates on Government of Canada bonds and treasury bills.

January 2016

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There was a budgetary surplus of $1.1 billion in January 2016, compared to a surplus of $2.2 billion in January 2015.

Revenues in January 2016 totalled $26.8 billion, up $1.4 billion, or 5.4 per cent, from January 2015.

  • Personal income tax revenues were up $0.7 billion, or 5.3 per cent.
  • Corporate income tax revenues were up $0.1 billion, or 4.1 per cent.
  • Non-resident income tax revenues were up $0.1 billion, or 10.5 per cent.
  • Excise taxes and duties were up $0.3 billion, or 7.3 per cent. Goods and Services Tax (GST) revenues increased by $0.2 billion, energy taxes decreased by $5 million, customs import duties increased by $0.1 billion, and other excise taxes and duties increased by $4 million.
  • Employment Insurance (EI) premium revenues were up $32 million, or 1.2 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 by $0.2 billion, or 7.0 per cent.

Program expenses in January 2016 were $23.7 billion, up $2.5 billion, or 11.8 per cent, from January 2015. 

  • Major transfers to persons, consisting of elderly, EI and children’s benefits, increased by $1.0 billion, or 15.9 per cent. Elderly benefits increased by $0.2 billion, or 4.6 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 $0.5 billion, or 27.1 per cent, reflecting in part year-over-year differences in the timing of payments. Children’s benefits, which consist of the Canada Child Tax Benefit and the Universal Child Care Benefit (UCCB), increased by $0.4 billion, or 37.7 per cent, largely reflecting increased benefits related to the enhancement and expansion of the UCCB in 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 $0.5 billion, or 9.6 per cent, largely reflecting legislated growth in the Canada Health Transfer, the Canada Social Transfer, Equalization transfers and transfers to the territories, as well as a downward adjustment to the Quebec Abatement, based on the latest estimated value of these tax point transfers.   
  • 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 $1.0 billion, or 10.2 per cent. Within direct program expenses:
    • Transfer payments increased by $0.8 billion, or 19.8 per cent, primarily reflecting higher claims expenses at Indigenous and Northern Affairs Canada.
    • Other direct program expenses increased by $0.2 billion, or 3.9 per cent.

Public debt charges increased by $1 million, or 0.1 per cent.

April 2015 to January 2016

For the April 2015 to January 2016 period of the 2015–16 fiscal year, there was a budgetary surplus of $4.3 billion, compared to a surplus of $1.3 billion reported during the same period of 2014–15.

Revenues increased by $15.6 billion, or 7.0 per cent, to $238.8 billion.

  • Personal income tax revenues were up $6.2 billion, or 5.6 per cent.
  • Corporate income tax revenues were up $4.4 billion, or 16.3 per cent.
  • Non-resident income tax revenues were up $0.3 billion, or 5.9 per cent.
  • Excise taxes and duties were up $2.9 billion, or 7.2 per cent. GST revenues increased by $1.9 billion, or 7.1 per cent, energy taxes by $0.1 billion, customs import duties by $0.7 billion, and other excise taxes and duties by $0.1 billion.
  • EI premium revenues were up $0.6 billion, or 3.2 per cent, reflecting growth in earnings.
  • Other revenues were up $1.3 billion, or 5.5 per cent, largely reflecting increased profits of enterprise Crown corporations.

For the April 2015 to January 2016 period, program expenses were $212.8 billion, up $13.7 billion, or 6.9 per cent, from the same period the previous year. 

  • Major transfers to persons were up $7.0 billion or 11.3 per cent. Elderly benefits increased by $1.5 billion, or 4.1 per cent, reflecting growth in the elderly population and changes in consumer prices, to which benefits are fully indexed. EI benefit payments increased by $1.4 billion, or 9.7 per cent, and children’s benefits were up $4.1 billion, or 37.8 per cent, largely reflecting increased benefits related to the enhancement and expansion of the UCCB.  
  • Major transfers to other levels of government were up $2.4 billion, or 4.6 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 $4.3 billion, or 5.1 per cent. Within direct program expenses:
    • Transfer payments decreased by $0.2 billion, or 0.8 per cent, largely reflecting the accelerated repayment of contributions by Pratt & Whitney Canada, offset in part by higher claims expenses at Indigenous and Northern Affairs Canada.
    • Other direct program expenses increased by $4.5 billion, or 7.7 per cent, due in large part to an increase in Crown corporation expenses and an increase in government pension and benefit costs based on the Government’s latest actuarial valuations.

Public debt charges decreased by $1.1 billion, or 4.8 per cent, largely reflecting lower average effective interest rates on Government of Canada bonds and treasury bills.

Revenues and expenses (April 2015 to January 2016)
Revenues and expenses (April 2015 to January 2016) - For details, refer to preceding paragraphs.
Note: Totals may not add due to rounding.

Financial requirement of $17.3 billion for April 2015 to January 2016

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 $4.3 billion and a financial requirement of $21.5 billion from non-budgetary transactions, there was a financial requirement of $17.3 billion for the April 2015 to January 2016 period, compared to a financial requirement of $6.1 billion for the same period the previous year. 

Net financing activities up $39.5 billion

The Government financed its financial requirement of $17.3 billion and increased cash balances by $22.2 billion by increasing unmatured debt by $39.5 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 January 2016 stood at $50.1 billion, up $13.4 billion from their level at the end of January 2015.

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

  2015 2016 2014–15 2015–16
Budgetary transactions        
  Revenues 25,415 26,775 223,282 238,839
  Expenses
    Program expenses -21,232 -23,732 -199,059 -212,766
    Public debt charges -1,972 -1,973 -22,914 -21,805
 

  Budgetary balance (deficit/surplus) 2,211 1,070 1,309 4,268
Non-budgetary transactions -8,983 -629 -7,382 -21,539
 

Financial source/requirement -6,772 441 -6,073 -17,271
Net change in financing activities 15,407 10,752 16,769 39,466
 

Net change in cash balances 8,635 11,193 10,696 22,195
Cash balance at end of period 36,768 50,146
Note: Positive numbers indicate a net source of funds. Negative numbers indicate a net requirement for funds.
 
Table 2
Revenues
  January   April to January  
 
 
 
  2015
($ millions)
2016
($ millions)
Change
(%)
2014–15
($ millions)
2015–16
($ millions)
Change
(%)
Tax revenues            
  Income taxes            
    Personal income tax 12,869 13,545 5.3 110,659 116,843 5.6
    Corporate income tax 2,793 2,907 4.1 26,949 31,330 16.3
    Non-resident income tax 977 1,080 10.5 5,213 5,519 5.9
 

    Total income tax 16,639 17,532 5.4 142,821 153,692 7.6
  Excise taxes and duties
    Goods and Services Tax 2,583 2,778 7.5 26,743 28,654 7.1
    Energy taxes 460 455 -1.1 4,610 4,756 3.2
    Customs import duties 356 440 23.6 3,775 4,447 17.8
    Other excise taxes and duties 424 428 0.9 4,935 5,073 2.8
 

    Total excise taxes and duties 3,823 4,101 7.3 40,063 42,930 7.2
 

  Total tax revenues 20,462 21,633 5.7 182,884 196,622 7.5
Employment Insurance premiums 2,718 2,750 1.2 17,220 17,772 3.2
Other revenues 2,235 2,392 7.0 23,178 24,445 5.5
 

Total revenues 25,415 26,775 5.4 223,282 238,839 7.0
Note: Totals may not add due to rounding.
 
Table 3
Expenses
  January   April to January  
 
 
 
  2015
($ millions)
2016
($ millions)
Change
(%)
2014–15
($ millions)
2015–16
($ millions)
Change
(%)
Major transfers to persons            
  Elderly benefits 3,696 3,865 4.6 36,232 37,706 4.1
  Employment Insurance benefits 1,673 2,127 27.1 14,565 15,980 9.7
  Children's benefits 1,063 1,464 37.7 10,821 14,914 37.8
 

  Total 6,432 7,456 15.9 61,618 68,600 11.3
Major transfers to other levels
  of government
  Support for health and other
    social programs
    Canada Health Transfer 2,676 2,836 6.0 26,762 28,354 5.9
    Canada Social Transfer 1,048 1,080 3.1 10,485 10,799 3.0
 

    Total 3,724 3,916 5.2 37,247 39,153 5.1
  Fiscal arrangements and other transfers1 1,641 1,703 3.8 17,077 17,562 2.8
  Canada's cities and communities 28 28 0.0 1,932 1,910 -1.1
  Quebec Abatement -376 -148 -60.6 -3,758 -3,710 -1.3
 

  Total 5,017 5,499 9.6 52,498 54,915 4.6
Direct program expenses
  Transfer payments
    Aboriginal Affairs and
      Northern Development
487 1,248 156.3 4,966 5,922 19.3
    Agriculture and Agri-Food 96 114 18.8 764 962 25.9
    Employment and Social Development 785 890 13.4 4,758 4,858 2.1
    Foreign Affairs, Trade and Development 358 396 10.6 1,966 2,402 22.2
    Health 298 290 -2.7 2,530 2,553 0.9
    Industry 144 169 17.4 1,815 753 -58.5
    Other1 1,683 1,506 -10.5 9,117 8,248 -9.5
 

    Total 3,851 4,613 19.8 25,916 25,698 -0.8
  Other direct program expenses
    Crown corporations 627 597 -4.8 6,113 7,013 14.7
    National Defence 1,551 1,856 19.7 16,626 18,711 12.5
    All other departments
      and agencies
3,754 3,711 -1.1 36,288 37,829 4.2
 

    Total other direct program expenses 5,932 6,164 3.9 59,027 63,553 7.7
 

  Total direct program expenses 9,783 10,777 10.2 84,943 89,251 5.1
 

Total program expenses 21,232 23,732 11.8 199,059 212,766 6.9
Public debt charges 1,972 1,973 0.1 22,914 21,805 -4.8
 

Total expenses 23,204 25,705 10.8 221,973 234,571 5.7

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
  January April to January
 

  2015 2016 2014–15 2015–16
Budgetary balance (deficit/surplus) 2,211 1,070 1,309 4,268
Non-budgetary transactions
  Capital investment activities -300 -529 -2,913 -3,560
  Other investing activities -606 208 2,474 -5,939
  Pension and other accounts 262 564 1,746 4,041
  Other activities    
    Accounts payable, receivables, accruals and allowances -1,417 1,344 -2,937 -4,827
    Foreign exchange activities -7,046 -2,508 -8,820 -14,772
    Amortization of tangible capital assets 124 292 3,068 3,518
 

    Total other activities -8,339 -872 -8,689 -16,081
 

  Total non-budgetary transactions -8,983 -629 -7,382 -21,539
 

Financial source/requirement -6,772 441 -6,073 -17,271
Note: Totals may not add due to rounding.
 
Table 5
Financial source/requirement and net financing activities
$ millions
  January April to January
 

  2015 2016 2014–15 2015–16
Financial source/requirement -6,772 441 -6,073 -17,271
Net increase (+)/decrease (-) in financing activities
  Unmatured debt transactions
    Canadian currency borrowings
      Marketable bonds 6,754 9,111 16,003 17,198
      Treasury bills 2,200 500 -4,300 12,100
      Retail debt 8 55 -630 -562
 

      Total 8,962 9,666 11,073 28,736
    Foreign currency borrowings 1,690 419 166 3,835
 

    Total 10,652 10,085 11,239 32,571
    Cross-currency swap revaluation 4,486 574 5,349 6,376
    Unamortized discounts and premiums on market debt 255 106 534 722
    Obligations related to capital leases and other unmatured debt 14 -13 -353 -203
 

  Net change in financing activities 15,407 10,752 16,769 39,466
Change in cash balance 8,635 11,193 10,696 22,195
Note: Totals may not add due to rounding.
 
Table 6
Condensed statement of assets and liabilities
$ millions
March 31,
2015
January 31,
2016
Change
Liabilities
   Accounts payable and accrued liabilities 123,631 122,499 -1,132
   Interest-bearing debt
      Unmatured debt
         Payable in Canadian currency
            Marketable bonds 487,881 505,079 17,198
            Treasury bills 135,692 147,792 12,100
            Retail debt 5,660 5,098 -562
 
            Subtotal 629,233 657,969 28,736
      Payable in foreign currencies 20,267 24,102 3,835
      Cross-currency swap revaluation 6,669 13,045 6,376
      Unamortized discounts and premiums on market debt 4,296 5,018 722
      Obligations related to capital leases and other unmatured debt 4,715 4,512 -203
 
      Total unmatured debt 665,180 704,646 39,466
     Pension and other liabilities  
         Public sector pensions 152,664 152,102 -562
         Other employee and veteran future benefits 76,140 80,879 4,739
         Other liabilities 6,002 5,866 -136
 
         Total pension and other liabilities 234,806 238,847 4,041
 
      Total interest-bearing debt 899,986 943,493 43,507
 
   Total liabilities 1,023,617 1,065,992 42,375
Financial assets
   Cash and accounts receivable 136,696 162,586 25,890
   Foreign exchange accounts 85,018 99,790 14,772
   Loans, investments, and advances (net of allowances)1 113,681 118,118 4,437
   Public sector pension assets 1,263 1,263 0
 
   Total financial assets 336,658 381,757 45,099
 
Net debt 686,959 684,235 -2,724
Non-financial assets 74,629 74,671 42
 
Federal debt (accumulated deficit) 612,330 609,564 -2,766
Note: Totals may not add due to rounding.
1 January 31, 2016 amount includes $1.5 billion in other comprehensive losses from enterprise Crown corporations and other government business enterprises for the April 2015 to January 2016 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 2016