The Fiscal Monitor
A publication of the Department of Finance

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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. 

Highlights

March 2016: budgetary deficit of $9.4 billion

There was a budgetary deficit of $9.4 billion in March 2016, compared to a budgetary deficit of $3.0 billion reported for March 2015. Revenues decreased by $5.0 billion, reflecting significant decreases in income tax revenues and other revenues, partially offset by an increase in excise taxes and duties. Program expenses increased by $1.3 billion, or 4.4 per cent, mainly reflecting an increase in direct program expenses. Public debt charges increased by $0.1 billion, or 7.0 per cent, reflecting higher consumer price adjustments on Real Return Bonds.

April 2015 to March 2016: budgetary deficit of $2.0 billion

For the April to March period of the 2015–16 fiscal year, the Government posted a budgetary deficit of $2.0 billion, compared to a surplus of $2.9 billion reported for the same period of 2014–15. Revenues were up $10.6 billion, or 3.8 per cent, reflecting increases in total tax revenues and Employment Insurance (EI) premium revenues, partially offset by a decline in other revenues. Program expenses were up $16.6 billion, or 6.6 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 4.1 per cent, largely reflecting a lower average effective interest rate on the stock of interest-bearing debt.

The April 2015 to March 2016 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. In addition, these results do not include the $3.7-billion fiscal impact of the Government’s initiative to enhance veterans’ benefits. Taking year-end adjustments into account, results to date are broadly in line with a small deficit in 2015–16, as projected in Budget 2016.

The Government will release the final audited outcome for 2015–16 in the Annual Financial Report of the Government of Canada in the fall.

March 2016

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There was a budgetary deficit of $9.4 billion in March 2016, compared to a deficit of $3.0 billion in March 2015.

Revenues in March 2016 totalled $24.1 billion, down $5.0 billion from March 2015.

  • Personal income tax revenues were down $1.1 billion, or 9.4 per cent.
  • Corporate income tax revenues were down $2.1 billion, or 37.3 per cent. 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 only unwinds near the end of the fiscal year.
  • Non-resident income tax revenues were down $0.2 billion, or 24.8 per cent.
  • Excise taxes and duties were up $0.5 billion, or 15.0 per cent. Goods and Services Tax (GST) revenues increased by $0.4 billion, energy taxes and customs import duties each increased by $0.1 billion, and other excise taxes and duties decreased by $30 million.
  • EI premium revenues were down $0.1 billion, or 3.8 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 $2.0 billion, or 36.7 per cent. This decline is largely the result of a significant increase in Crown corporation revenues in March 2015, which did not reoccur in 2016.

Program expenses in March 2016 were $31.5 billion, up $1.3 billion, or 4.4 per cent, from March 2015.

  • Major transfers to persons, consisting of elderly, EI and children’s benefits, decreased by $0.1 billion, or 1.2 per cent. Elderly benefits increased by $0.1 billion, or 3.1 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 $0.5 billion, or 25.3 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 $0.3 billion, or 28.4 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 decreased by $0.2 billion, or 2.7 per cent, largely reflecting a year-over-year increase in estimated recoveries under the Quebec Abatement.
  • 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 $1.5 billion, or 8.8 per cent. Within direct program expenses:
    • Transfer payments increased by $0.1 billion, or 0.8 per cent.
    • Other direct program expenses increased by $1.5 billion, or 14.3 per cent, due mainly to an increase in year-end valuation adjustments for assets and liabilities and an increase in pension and benefit costs.

Public debt charges increased by $0.1 billion, or 7.0 per cent, reflecting higher consumer price adjustments on Real Return Bonds.

April 2015 to March 2016

For the April to March period of the 2015–16 fiscal year, there was a budgetary deficit of $2.0 billion, compared to a surplus of $2.9 billion reported during the same period of 2014–15.

Revenues increased by $10.6 billion, or 3.8 per cent, to $289.6 billion.

  • Personal income tax revenues were up $4.5 billion, or 3.3 per cent.
  • Corporate income tax revenues were up $2.5 billion, or 6.3 per cent.
  • Non-resident income tax revenues were up $6 million, or 0.1 per cent.
  • Excise taxes and duties were up $3.8 billion, or 8.2 per cent. GST revenues increased by $2.7 billion, or 8.6 per cent, energy taxes by $0.2 billion, customs import duties by $0.8 billion, and other excise taxes and duties by $0.2 billion. 
  • EI premium revenues were up $0.5 billion, or 2.1 per cent.
  • Other revenues were down $0.7 billion, or 2.3 per cent, reflecting a number of factors including lower interest and penalty revenues.

Program expenses increased by $16.6 billion, or 6.6 per cent, to $266.0 billion.

  • Major transfers to persons were up $7.7 billion, or 10.2 per cent. Elderly benefits increased by $1.7 billion, or 4.0 per cent, reflecting growth in the elderly population and changes in consumer prices, to which benefits are fully indexed. EI benefit payments increased by $1.1 billion, or 5.8 per cent, and children’s benefits were up $4.9 billion, or 37.4 per cent, largely reflecting increased benefits related to the enhancement and expansion of the UCCB.
  • Major transfers to other levels of government were up $2.7 billion, or 4.3 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 $6.2 billion, or 5.5 per cent. Within direct program expenses:
    • Transfer payments decreased by $0.3 billion, or 0.9 per cent.
    • Other direct program expenses increased by $6.5 billion, or 8.6 per cent, largely reflecting an increase in year-end valuation adjustments for assets and liabilities and an increase in pension and benefit costs.

Public debt charges decreased by $1.1 billion, or 4.1 per cent, largely reflecting a lower average effective interest rate on the stock of interest-bearing debt.

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

Financial requirement of $12.6 billion for April 2015 to March 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 deficit of $2.0 billion and a financial requirement of $10.6 billion from non-budgetary transactions, there was a financial requirement of $12.6 billion for the April 2015 to March 2016 period, compared to a financial requirement of $4.3 billion for the same period the previous year.

Net financing activities up $22.5 billion

The Government financed its financial requirement of $12.6 billion and increased cash balances by $9.9 billion by increasing unmatured debt by $22.5 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 March 2016 stood at $37.8 billion, up $9.9 billion from their level at the end of March 2015.

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

  2015 2016 2014–15 2015–16
Budgetary transactions        
  Revenues 29,099 24,105 279,021 289,591
  Expenses
    Program expenses -30,175 -31,489 -249,448 -266,019
    Public debt charges -1,917 -2,052 -26,632 -25,536
 

  Budgetary balance (deficit/surplus) -2,993 -9,436 2,941 -1,964
Non-budgetary transactions 2,519 11,007 -7,214 -10,614
 

Financial source/requirement -474 1,571 -4,273 -12,578
Net change in financing activities 35 -6,561 6,151 22,473
 

Net change in cash balances -439 -4,990 1,878 9,895
Cash balance at end of period 27,952 37,845
Note: Positive numbers indicate a net source of funds. Negative numbers indicate a net requirement for funds.
 
Table 2
Revenues
  March   April to March  
 
 
 
  2015
($ millions)
2016
($ millions)
Change
(%)
2014–15
($ millions)
2015–16
($ millions)
Change
(%)
Tax revenues            
  Income taxes            
    Personal income tax 11,531 10,452 -9.4 133,582 138,040 3.3
    Corporate income tax 5,741 3,601 -37.3 39,223 41,701 6.3
    Non-resident income tax 666 501 -24.8 6,378 6,384 0.1
 

    Total income tax 17,938 14,554 -18.9 179,183 186,125 3.9
  Excise taxes and duties
    Goods and Services Tax 2,085 2,462 18.1 30,997 33,673 8.6
    Energy taxes 375 438 16.8 5,446 5,649 3.7
    Customs import duties 392 473 20.7 4,558 5,372 17.9
    Other excise taxes and duties 418 388 -7.2 5,734 5,888 2.7
 

    Total excise taxes and duties 3,270 3,761 15.0 46,735 50,582 8.2
 

  Total tax revenues 21,208 18,315 -13.6 225,918 236,707 4.8
Employment Insurance premiums 2,419 2,326 -3.8 22,354 22,831 2.1
Other revenues 5,472 3,464 -36.7 30,749 30,053 -2.3
 

Total revenues 29,099 24,105 -17.2 279,021 289,591 3.8
Note: Totals may not add due to rounding.
 
Table 3
Expenses
  March   April to March  
 
 
 
  2015
($ millions)
2016
($ millions)
Change
(%)
2014–15
($ millions)
2015–16
($ millions)
Change
(%)
Major transfers to persons            
  Elderly benefits 3,786 3,903 3.1 43,763 45,494 4.0
  Employment Insurance benefits 2,128 1,590 -25.3 18,382 19,440 5.8
  Children's benefits 1,185 1,522 28.4 13,049 17,929 37.4
 

  Total 7,099 7,015 -1.2 75,194 82,863 10.2
Major transfers to other levels
  of government
  Support for health and other
    social programs
    Canada Health Transfer 2,676 2,835 5.9 32,114 34,025 6.0
    Canada Social Transfer 1,048 1,080 3.1 12,582 12,959 3.0
 

    Total 3,724 3,915 5.1 44,696 46,984 5.1
  Fiscal arrangements and other transfers1 1,972 1,844 -6.5 20,674 21,345 3.2
  Canada's cities and communities 15 37 146.7 1,973 1,973 0.0
  Quebec Abatement -136 -371 172.8 -4,234 -4,451 5.1
 

  Total 5,575 5,425 -2.7 63,109 65,851 4.3
Direct program expenses
  Transfer payments
    Aboriginal Affairs and
      Northern Development
1,952 1,484 -24.0 7,444 7,775 4.4
    Agriculture and Agri-Food 417 270 -35.3 1,290 1,289 -0.1
    Employment and Social Development 929 945 1.7 6,097 6,273 2.9
    Foreign Affairs, Trade and Development 1,511 1,535 1.6 3,904 4,366 11.8
    Health 319 333 4.4 2,949 2,985 1.2
    Industry 414 467 12.8 2,399 1,404 -41.5
    Other1 1,508 2,072 37.4 11,435 11,091 -3.0
 

    Total 7,050 7,106 0.8 35,518 35,183 -0.9
  Other direct program expenses
    Crown corporations 1,303 726 -44.3 8,227 8,562 4.1
    National Defence 3,426 3,814 11.3 21,804 24,474 12.2
    All other departments
      and agencies
5,722 7,403 29.4 45,596 49,086 7.7
 

    Total other direct program expenses 10,451 11,943 14.3 75,627 82,122 8.6
 

  Total direct program expenses 17,501 19,049 8.8 111,145 117,305 5.5
 

Total program expenses 30,175 31,489 4.4 249,448 266,019 6.6
Public debt charges 1,917 2,052 7.0 26,632 25,536 -4.1
 

Total expenses 32,092 33,541 4.5 276,080 291,555 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
  March April to March
 

  2015 2016 2014–15 2015–16
Budgetary balance (deficit/surplus) -2,993 -9,436 2,941 -1,964
Non-budgetary transactions
  Capital investment activities -251 -112 -3,801 -4,091
  Other investing activities -60 770 2,349 -5,340
  Pension and other accounts -85 -58 2,017 4,381
  Other activities    
    Accounts payable, receivables, accruals and allowances 7,748 8,706 1,526 282
    Foreign exchange activities -4,872 2,836 -12,756 -8,520
    Amortization of tangible capital assets 39 -1,135 3,451 2,674
 

    Total other activities 2,915 10,407 -7,779 -5,564
 

  Total non-budgetary transactions 2,519 11,007 -7,214 -10,614
 

Financial source/requirement -474 1,571 -4,273 -12,578
Note: Totals may not add due to rounding.
 
Table 5
Financial source/requirement and net financing activities
$ millions
  March April to March
 

  2015 2016 2014–15 2015–16
Financial source/requirement -474 1,571 -4,273 -12,578
Net increase (+)/decrease (-) in financing activities
  Unmatured debt transactions
    Canadian currency borrowings
      Marketable bonds 4,397 730 14,493 16,208
      Treasury bills -9,500 -4,100 -17,300 2,400
      Retail debt -23 4 -684 -585
 

      Total -5,126 -3,366 -3,491 18,023
    Foreign currency borrowings 4,554 -1,232 4,237 2,215
 

    Total -572 -4,598 746 20,238
    Cross-currency swap revaluation 125 -1,996 4,343 1,722
    Unamortized discounts and premiums on market debt 168 49 1,112 751
    Obligations related to capital leases and other unmatured debt 314 -16 -50 -238
 

  Net change in financing activities 35 -6,561 6,151 22,473
Change in cash balance -439 -4,990 1,878 9,895
Note: Totals may not add due to rounding.
 
Table 6
Condensed statement of assets and liabilities
$ millions
March 31,
2015
March 31,
2016
Change
Liabilities
   Accounts payable and accrued liabilities 123,631 125,788 2,157
   Interest-bearing debt
      Unmatured debt
         Payable in Canadian currency
            Marketable bonds 487,881 504,089 16,208
            Treasury bills 135,692 138,092 2,400
            Retail debt 5,660 5,075 -585
 
            Subtotal 629,233 647,256 18,023
      Payable in foreign currencies 20,267 22,482 2,215
      Cross-currency swap revaluation 6,669 8,391 1,722
      Unamortized discounts and premiums on market debt 4,296 5,047 751
      Obligations related to capital leases and other unmatured debt 4,715 4,477 -238
 
      Total unmatured debt 665,180 687,653 22,473
     Pension and other liabilities  
         Public sector pensions 152,664 151,950 -714
         Other employee and veteran future benefits 76,140 81,636 5,496
         Other liabilities 6,002 5,601 -401
 
         Total pension and other liabilities 234,806 239,187 4,381
 
      Total interest-bearing debt 899,986 926,840 26,854
 
   Total liabilities 1,023,617 1,052,628 29,011
Financial assets
   Cash and accounts receivable 136,696 148,466 11,770
   Foreign exchange accounts 85,018 93,538 8,520
   Loans, investments, and advances (net of allowances)1 113,681 116,396 2,715
   Public sector pension assets 1,263 1,263 0
 
   Total financial assets 336,658 359,663 23,005
 
Net debt 686,959 692,965 6,006
Non-financial assets 74,629 76,046 1,417
 
Federal debt (accumulated deficit) 612,330 616,919 4,589
Note: Totals may not add due to rounding.
1 March 31, 2016 amount includes $2.6 billion in other comprehensive losses from enterprise Crown corporations and other government business enterprises for the April 2015 to March 2016 period.

Note: Unless otherwise noted, changes in financial results are presented on a year-over-year basis.

For inquiries about this publication, contact Bradley Recker at 613-369-5667.

May 2016