The Fiscal Monitor
A publication of the Department of Finance

RSS

Highlights

February 2019

There was a budgetary surplus of $4.3 billion in February 2019, compared to a surplus of $2.8 billion in February 2018. Revenues increased by $3.5 billion, or 12.2 per cent, primarily reflecting an increase in tax revenues. Program expenses increased by $1.7 billion, or 6.9 per cent, largely reflecting an increase in direct program expenses. Public debt charges increased by $0.3 billion, or 19.9 per cent, reflecting higher Consumer Price Index adjustments on Real Return Bonds.

Monthly budgetary balance
Monthly budgetary balance
 

April 2018 to February 2019

For the April to February period of the 2018–19 fiscal year, the Government posted a budgetary surplus of $3.1 billion, compared to a deficit of $6.0 billion reported for the same period of 2017–18. Revenues were up $23.5 billion, or 8.5 per cent, reflecting increases in tax revenues, Employment Insurance (EI) premium revenues and other revenues. Program expenses were up $12.7 billion, or 4.8 per cent, reflecting increases in major transfers to persons, major transfers to other levels of government and direct program expenses. Public debt charges increased by $1.7 billion, or 8.4 per cent, reflecting a higher average effective interest rate on the stock of interest-bearing debt.

Budget 2019 announced several significant measures for 2018–19, which will be recorded once enabling legislation receives Royal Assent. These measures include:

  • a one-time transfer of $2.2 billion through the federal Gas Tax Fund;
  • $1.0 billion to increase energy efficiency in residential, commercial and multi-unit buildings; and
  • $0.9 billion for forgiving and reimbursing loans for comprehensive claims negotiations.

Taking these measures, along with expected March 2019 results and end-of-year adjustments, into account, the results to date are broadly in line with the budgetary deficit for 2018–19 projected in Budget 2019.

Year-to-date budgetary balance
Year-to-date budgetary balance
1 Source: Budget 2019.

PDF Version [379 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.
 
Table 1
Summary statement of transactions
($ millions)
February April to February
 

2018
Restated1
2019 2017–18
Restated1
2018–19
Budgetary transactions        
  Revenues 28,544 32,040 276,951 300,459
  Expenses        
    Program expenses -24,234 -25,904 -263,226 -275,958
    Public debt charges -1,526 -1,830 -19,744 -21,407
 

  Budgetary balance (deficit/surplus) 2,784 4,306 -6,019 3,094
Non-budgetary transactions -9,341 -2,446 -6,057 -13,819
 

Financial source/requirement -6,557 1,860 -12,076 -10,725
Net change in financing activities 5,173 -8,739 19,460 12,332
 

Net change in cash balances -1,384 -6,879 7,384 1,607
Cash balance at end of period     44,285 39,284
Notes: Positive numbers indicate net source of funds. Negative numbers indicate net requirement for funds.
1 Certain comparative figures have been restated to reflect a change in accounting policy. See Note 8 at the end of this document for further details.
 

Revenues

Revenues in February 2019 totalled $32.0 billion, up $3.5 billion, or 12.2 per cent, from February 2018.

  • Tax revenues increased by $3.1 billion, or 13.1 per cent, largely reflecting increases in personal and corporate income tax revenues.
  • EI premium revenues were unchanged at $2.6 billion.   
  • 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 $0.4 billion, or 17.3 per cent.

For the April to February period of 2018–19, revenues were $300.5 billion, up $23.5 billion, or 8.5 per cent, from the same period the previous year.

  • Tax revenues increased by $20.2 billion, or 8.6 per cent, driven largely by growth in income tax revenues, Goods and Services Tax revenues and customs import duties revenues.
  • EI premium revenues were up $0.6 billion, or 3.3 per cent. 
  • Other revenues were up $2.7 billion, or 11.9 per cent, largely reflecting higher interest and penalties revenues.
 
Table 2
Revenues
February   April to February  
 
 
 
2018
Restated1
2019 Change 2017–18
Restated1
2018–19 Change
($ millions) (%) ($ millions) (%)
Tax revenues            
  Income taxes            
    Personal 11,568 13,022 12.6 134,304 143,227 6.6
    Corporate 7,914 9,179 16.0 43,412 48,897 12.6
    Non-resident 630 925 46.8 7,494 9,168 22.3
 

    Total income tax revenues 20,112 23,126 15.0 185,210 201,292 8.7
  Other taxes and duties            
    Goods and Services Tax 2,476 2,511 1.4 34,381 36,875 7.3
    Energy taxes 454 453 -0.2 5,295 5,325 0.6
    Customs import duties 430 494 14.9 5,003 6,319 26.3
    Other excise taxes and duties 378 395 4.5 5,466 5,712 4.5
 

    Total other taxes and duties 3,738 3,853 3.1 50,145 54,231 8.1
 

  Total tax revenues 23,850 26,979 13.1 235,355 255,523 8.6
Employment Insurance premiums 2,573 2,573 0.0 18,572 19,176 3.3
Other revenues 2,121 2,488 17.3 23,024 25,760 11.9
 

Total revenues 28,544 32,040 12.2 276,951 300,459 8.5
Note: Totals may not add due to rounding.
1 Certain comparative figures have been restated to reflect a change in accounting policy. See Note 8 at the end of this document for further details.

Expenses

Program expenses in February 2019 were $25.9 billion, up $1.7 billion, or 6.9 per cent, from February 2018.

  • Major transfers to persons, consisting of elderly, EI and children's benefits, were up $0.1 billion, or 1.4 per cent. Elderly benefits increased by $0.2 billion, or 5.2 per cent, reflecting growth in the elderly population and changes in consumer prices, to which benefits are fully indexed. EI benefits decreased by $0.1 billion, or 6.6 per cent. Children's benefits were up $7 million, or 0.4 per cent.
  • Major transfers to other levels of government were up $0.4 billion, or 6.2 per cent, largely reflecting legislated growth in the Canada Health Transfer, the Canada Social Transfer and Equalization transfers, as well as an increase in Gas Tax Fund transfers.  
  • Direct program expenses were up $1.2 billion, or 11.6 per cent. Within direct program expenses:
    • Other transfer payments increased by $0.2 billion, or 6.3 per cent.
    • Other direct program expenses, consisting of operating expenses of the Government's departments, agencies, and consolidated Crown corporations and other entities, increased by $1.0 billion, or 14.4 per cent.

Public debt charges were up $0.3 billion, or 19.9 per cent, reflecting higher Consumer Price Index adjustments on Real Return Bonds.

For the April to February period of 2018–19, program expenses were $276.0 billion, up $12.7 billion, or 4.8 per cent, from the same period the previous year.

  • Major transfers to persons were up $1.9 billion, or 2.3 per cent. Elderly benefits increased by $2.4 billion, or 5.2 per cent, reflecting growth in the elderly population and changes in consumer prices. EI benefits decreased by $0.9 billion, or 5.0 per cent, while children's benefits were up $0.4 billion, or 2.0 per cent.
  • Major transfers to other levels of government were up $2.4 billion, or 3.7 per cent, largely reflecting legislated growth in the Canada Health Transfer, the Canada Social Transfer and Equalization transfers.  
  • Direct program expenses were up $8.4 billion, or 7.5 per cent. Within direct program expenses:
    • Other transfer payments increased by $3.9 billion, or 11.3 per cent, reflecting increases across a number of departments, including increased transfers relating to claims, disaster assistance and infrastructure.
    • Other direct program expenses increased by $4.5 billion, or 5.8 per cent, largely reflecting an increase in personnel costs and expenses related to claims.

Public debt charges increased by $1.7 billion, or 8.4 per cent, reflecting a higher average effective interest rate on the stock of interest-bearing debt.

 
Table 3
Expenses
February   April to February
 
 
 
2018
Restated1
2019 Change 2017–18
Restated1
2018–19 Change
  ($ millions) (%) ($ millions) (%)
Major transfers to persons            
  Elderly benefits 4,314 4,538 5.2 46,439 48,867 5.2
  Employment Insurance benefits 1,808 1,688 -6.6 18,189 17,274 -5.0
  Children’s benefits 1,982 1,989 0.4 21,467 21,902 2.0
 

  Total 8,104 8,215 1.4 86,095 88,043 2.3
Major transfers to other levels of government            
  Canada Health Transfer 3,096 3,215 3.8 34,054 35,368 3.9
  Canada Social Transfer 1,146 1,180 3.0 12,603 12,981 3.0
  Equalization 1,521 1,580 3.9 16,733 17,352 3.7
  Territorial Formula Financing 250 257 2.8 3,431 3,528 2.8
  Gas Tax Fund 0 267 n/a 2,072 2,161 4.3
  Home care and mental health 0 0 n/a 300 490 63.3
  Other fiscal arrangements2 -291 -421 44.7 -4,308 -4,584 6.4
 

  Total 5,722 6,078 6.2 64,885 67,296 3.7
Direct program expenses            
  Other transfer payments 3,706 3,941 6.3 34,543 38,438 11.3
  Other direct program expenses 6,702 7,670 14.4 77,703 82,181 5.8
 

  Total direct program expenses 10,408 11,611 11.6 112,246 120,619 7.5
 

Total program expenses 24,234 25,904 6.9 263,226 275,958 4.8
Public debt charges 1,526 1,830 19.9 19,744 21,407 8.4
 

Total expenses 25,760 27,734 7.7 282,970 297,365 5.1
Note: Totals may not add due to rounding.
1 Certain comparative figures have been restated to reflect a change in accounting policy. See Note 8 at the end of this document for further details.
2Other fiscal arrangements include the Youth Allowances Recovery and Alternative Payments for Standing Programs, which represent a recovery from Quebec of a tax point transfer; statutory subsidies; payments under the 2005 Offshore Accords; and payments to provinces in respect of common securities regulation.

The following table presents total expenses by main object of expense.

 
Table 4
Total expenses by object of expense
  February   April to February  
 
 
 
  2018 2019 Change 2017-18 2018-19 Change
($ millions) (%) ($ millions) (%)
Transfer payments 17,532 18,234 4.0 185,523 193,777 4.4
Other expenses            
  Personnel 4,284 4,558 6.4 47,686 50,109 5.1
  Transportation and communications 203 196 -3.4 2,235 2,398 7.3
  Information 25 32 28.0 210 259 23.3
  Professional and special services 972 1,019 4.8 9,299 9,606 3.3
  Rentals 209 239 14.4 2,590 2,769 6.9
  Repair and maintenance 252 287 13.9 2,467 2,768 12.2
  Utilities, materials and supplies 234 252 7.7 2,160 2,261 4.7
  Other subsidies and expenses 114 644 464.9 6,505 7,414 14.0
  Amortization of tangible capital assets 398 422 6.0 4,430 4,466 0.8
  Net loss on disposal of assets 11 21 90.9 121 131 8.3
 

  Total other expenses 6,702 7,670 14.4 77,703 82,181 5.8
 

Total program expenses 24,234 25,904 6.9 263,226 275,958 4.8
Public debt charges 1,526 1,830 19.9 19,744 21,407 8.4
 

Total expenses 25,760 27,734 7.7 282,970 297,365 5.1
Note: Totals may not add due to rounding.
 
Revenues and expenses (April 2018 to February 2019)
Revenues and expenses (April 2018 to February 2019) - For details, refer to preceding paragraphs.
Note: Totals may not add due to rounding.

Financial requirement of $10.7 billion for April 2018 to February 2019

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 $3.1 billion and a requirement of $13.8 billion from non-budgetary transactions, there was a financial requirement of $10.7 billion for the April 2018 to February 2019 period, compared to a financial requirement of $12.1 billion for the same period the previous year.

 
Table 5
The budgetary balance and financial source/requirement
($ millions)
February April to February
 

2018
Restated1
2019 2017–18
Restated1
2018–19
Budgetary balance (deficit/surplus) 2,784 4,306 -6,019 3,094
Non-budgetary transactions        
  Accounts payable, accrued liabilities and
   accounts receivable
-5,082 -6,288 -5,120 -3,825
  Pensions, other future benefits, and other liabilities 835 548 6,182 6,947
  Foreign exchange accounts -4,130 4,200 -2,292 -3,249
  Loans, investments and advances -834 -823 -3,978 -11,769
  Non-financial assets -130 -83 -849 -1,923
 

  Total non-budgetary transactions -9,341 -2,446 -6,057 -13,819
 

Financial source/requirement -6,557 1,860 -12,076 -10,725
Note: Totals may not add due to rounding.
1 Certain comparative figures have been restated to reflect a change in accounting policy. See Note 8 at the end of this document for further details.

Net financing activities up $12.3 billion

The Government financed this financial requirement of $10.7 billion and increased cash balances by $1.6 billion by increasing unmatured debt by $12.3 billion. The increase in unmatured debt was achieved primarily through the issuance of 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 February 2019 stood at $39.3 billion, down $5.0 billion from their level at the end of February 2018. 

 
Table 6
Financial source/requirement and net financing activities
($ millions)
February April to February
 

2018 2019 2017–18 2018–19
Financial source/requirement -6,557 1,860 -12,076 -10,725
Net increase (+)/decrease (-) in financing activities        
  Unmatured debt transactions        
    Canadian currency borrowings        
      Marketable bonds -472 -5,583 42,613 -2,463
      Treasury bills 2,300 1,000 -21,800 19,100
      Retail debt -78 -22 -1,882 -1,303
 

      Total 1,750 -4,605 18,931 15,334
    Foreign currency borrowings 869 -4,077 2,773 -74
 

    Total 2,619 -8,682 21,704 15,260
    Cross-currency swap revaluation 2,756 -62 -417 -1,257
    Unamortized discounts and premiums on market debt -176 37 -1,758 -1,288
    Obligations related to capital leases and other unmatured debt -26 -32 -69 -383
 

  Net change in financing activities 5,173 -8,739 19,460 12,332
Change in cash balance -1,384 -6,879 7,384 1,607
Cash balance at end of period     44,285 39,284
Note: Totals may not add due to rounding.

Federal debt

The federal debt, or accumulated deficit, is the difference between the Government's total liabilities and total assets. The year-over-year change in the accumulated deficit reflects the year-to-date budgetary balance plus other comprehensive income or loss. Other comprehensive income or loss represents certain unrealized gains and losses on financial instruments and certain actuarial gains and losses related to pensions and other employee future benefits reported by enterprise Crown corporations and other government business enterprises.

The federal debt decreased by $3.7 billion over the April 2018 to February 2019 period, reflecting the $3.1-billion budgetary surplus and $0.6 billion in other comprehensive income.

Table 7
Condensed statement of assets and liabilities
($ millions)
  March 31,
2018
Restated2
February 28,
2019
Change
Liabilities      
  Accounts payable and accrued liabilities 148,733 155,776 7,043
  Interest-bearing debt      
    Unmatured debt      
      Payable in Canadian currency      
        Marketable bonds 574,968 572,505 -2,463
        Treasury bills 110,700 129,800 19,100
        Retail debt 2,586 1,283 -1,303
 
        Subtotal 688,254 703,588 15,334
      Payable in foreign currencies 16,049 15,975 -74
      Cross-currency swap revaluation 7,835 6,578 -1,257
      Unamortized discounts and premiums on market debt 3,467 2,179 -1,288
      Obligations related to capital leases and other unmatured debt 5,596 5,213 -383
 
      Total unmatured debt 721,201 733,533 12,332
    Pension and other liabilities      
        Public sector pensions 170,914 169,020 -1,894
        Other employee and veteran future benefits 104,793 113,530 8,737
        Other liabilities 5,670 5,774 104
 
        Total pension and other liabilities 281,377 288,324 6,947
 
      Total interest-bearing debt 1,002,578 1,021,857 19,279
 
    Total liabilities 1,151,311 1,177,633 26,322
Financial assets      
    Cash and accounts receivable 172,991 185,466 12,475
    Foreign exchange accounts 96,938 100,187 3,249
    Loans, investments, and advances
     (net of allowances)1
126,371 138,712 12,341
    Public sector pension assets 2,124 2,124 0
 
    Total financial assets 398,424 426,489 28,065
 
Net debt 752,887 751,144 -1,743
Non-financial assets 81,633 83,556 1,923
 
Federal debt (accumulated deficit) 671,254 667,588 -3,666
Note: Totals may not add due to rounding.
1 February 28, 2019 amount includes $0.6 billion in other comprehensive income from enterprise Crown corporations and other government business enterprises for the April 2018 to February 2019 period.
2 Certain March 31, 2018 balances have been restated to reflect a change in the Government's accounting for the Canadian Commercial Corporation. This restatement has resulted in a $6,091-million decrease in accounts payable and accrued liabilities, a $215-million decrease in cash and accounts receivable, and a $5,876-million decrease in non-financial assets, with no overall impact on the federal debt. See Note 8 at the end of this document for further details.

Notes

  1. The Fiscal Monitor is a report on the consolidated financial results of the Government of Canada, prepared monthly by the Department of Finance Canada. The Government is committed to releasing The Fiscal Monitor on a timely basis in accordance with the International Monetary Fund's Special Data Dissemination Standard Plus, which is designed to promote member countries' data transparency and promote the development of sound statistical systems.
  2. The financial results reported in The Fiscal Monitor are drawn from the accounts of Canada, which are maintained by the Receiver General and used to prepare the annual Public Accounts of Canada.
  3. The Fiscal Monitor is generally prepared in accordance with the same accounting policies as used to prepare the Government's annual consolidated financial statements, which are summarized in Section 2 of Volume I of the Public Accounts of Canada, available through the Public Services and Procurement Canada website.     
  4. The financial results presented in The Fiscal Monitor have not been audited or reviewed by an external auditor.
  5. There can be substantial 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.
  6. The April to March results reported in The Fiscal Monitor are not the final results for the fiscal year as a whole. The final results are published in the annual Public Accounts of Canada and incorporate post-March end-of-year adjustments made once further information becomes available, including the accrual of tax revenues reflecting assessments of tax returns and valuation adjustments for assets and liabilities. Post-March adjustments may also include the accrual of measures announced in the budget that are recorded upon receipt of Royal Assent of enabling legislation.
  7. Table 7, Condensed Statement of Assets and Liabilities, is included in the monthly Fiscal Monitor following the finalization and publication of the Government's financial results for the preceding fiscal year, typically in the fall.
  8. Accounting Changes and Restatement

    The monthly financial results for 2017–18 presented for comparative purposes in The Fiscal Monitor have been restated to reflect the following two changes in accounting policy.

    Change in Discount Rate Methodology

    In finalizing its 2017–18 annual financial results, the Government implemented a change in the discount rate methodology used in valuing unfunded pension obligations. This change resulted in a $0.5-billion increase in the 2017–18 budgetary deficit. Further details regarding this accounting policy change can be found in Note 3 to the condensed consolidated financial statements in the Annual Financial Report of the Government of Canada 2017–2018, available on the Department of Finance Canada website.

    Canadian Commercial Corporation

    For the 2018–19 fiscal year, the Canadian Commercial Corporation has determined that it acts as an agent in its commercial trading transactions. As a result, the revenues and expenses and related asset and liability balances arising from these transactions are no longer consolidated in the Government's financial results. This accounting change has no net impact on the budgetary balance, as the decline in the Government's revenues is offset by an equal reduction in expenses. Similarly, this change has no net impact on the federal debt, as the decrease in the Government's assets is offset by an equal reduction in its liabilities. The March 31, 2018 Condensed Statement of Assets and Liabilities shown in Table 7 has been adjusted to reflect the retroactive impact of this change.

    The following table provides an overview of these restatements of the 2017–18 financial results.
Table 8
Summary of Restatements
($ millions)
Program expenses Public debt charges Other revenues Budgetary balance (deficit/surplus) Non-budgetary transactions
February 2018          
As previously reported -24,173 -1,717 2,293 2,826 -9,383
Effect of change in accounting policy          
  Change in discount rate methodology -233 191   -42 42
  Canadian Commercial Corporation 172   -172 -  
 
As restated -24,234 -1,526 2,121 2,784 -9,341
 
April 2017 to February 2018          
As previously reported -262,879 -21,845 25,240 -5,557 -6,519
Effect of change in accounting policy          
  Change in discount rate methodology -2,563 2,101   -462 462
  Canadian Commercial Corporation 2,216   -2,216 -  
 
As restated -263,226 -19,744 23,024 -6,019 -6,057
 
Note: Totals may not add due to rounding.

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.

April 2019