Ottawa, July 27, 2012
The Honourable Jim Flaherty, Minister of Finance, today released The Fiscal Monitor for April-May 2012.
For the first two months of the 2012–13 fiscal year (April and May), there was a budgetary deficit of $0.8 billion, compared to a deficit of $2.0 billion reported in the same period last year. By month, there was a deficit of $19 million in April and a deficit of $0.8 billion in May.
For the two months combined, revenues increased by $2.0 billion, or 5.0 per cent, reflecting increases across all revenue streams. Program expenses were up $1.2 billion, or 3.4 per cent, mainly reflecting higher transfer payments. Public debt charges decreased by $0.4 billion, or 6.9 per cent, reflecting lower Consumer Price Index adjustments on real return bonds and a lower effective interest rate on the stock of interest-bearing debt.
Beginning with the April and May 2012 Fiscal Monitor, the Government has adopted a new accounting standard issued by the Public Sector Accounting Board of the Canadian Institute of Chartered Accountants regarding tax revenues. The new standard provides guidance on the classification of a payment made through the tax system or a reduction in taxes payable as either a reduction in tax revenues or a transfer payment. As a consequence, several refundable tax credits that were previously recorded as a reduction in tax revenues have been reclassified as transfer payments. This accounting reclassification has no impact on the administration of these tax credits through the income tax system. To enhance comparability, prior period results have been restated to reflect this reclassification. This change has resulted in an increase of $0.3 billion in revenues and expenses for April 2011 and May 2011, with no overall impact on the budgetary balance.
In addition, the methodology for reporting monthly Goods and Services Tax (GST) revenues has been changed to better align the methodology and reported results with the annual Public Accounts. Prior period results have been restated on a comparable basis. This change has resulted in a $1.2 billion increase in GST revenues for April 2011 and a $0.1 billion increase in GST revenues for May 2011.
For further information, media may contact:
Mary Ann Dewey-Plante
Office of the Minister of Finance
Department of Finance
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