The Fiscal Monitor
A publication of the Department of Finance

RSS

Highlights

June 2019

There was a budgetary surplus of $1.0 billion in June 2019, compared to a surplus of $1.1 billion in June 2018. Revenues increased by $0.9 billion, or 3.5 per cent, primarily reflecting an increase in income tax revenues. Program expenses increased by $0.9 billion, or 3.9 per cent, reflecting increases in major transfers to persons and other levels of government and direct program expenses. Public debt charges increased by $0.2 billion, or 7.7 per cent, reflecting higher Consumer Price Index adjustments on Real Return Bonds and a higher average effective interest rate on the stock of Treasury Bills.

Monthly budgetary balance
Monthly budgetary balance
 

April to June 2019

For the April to June period of the 2019–20 fiscal year, the Government posted a budgetary deficit of $0.5 billion, compared to a surplus of $4.3 billion reported for the same period of 2018–19. Revenues were up $3.2 billion, or 4.0 per cent, primarily reflecting increases in tax revenues and other revenues. Program expenses were up $7.3 billion, or 10.3 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 $0.7 billion, or 11.5 per cent, reflecting higher Consumer Price Index adjustments on Real Return Bonds and a higher average effective interest rate on the stock of Treasury Bills.

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

PDF Version [252 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)
June April - June
 

2018
Restated1
2019 2018–19
Restated1
2019–20
Budgetary transactions        
  Revenues 26,926 27,859 81,156 84,374
  Expenses        
    Program expenses -23,800 -24,733 -70,661 -77,919
    Public debt charges -2,013 -2,168 -6,200 -6,911
 

  Budgetary balance (deficit/surplus) 1,113 958 4,295 -456
Non-budgetary transactions -8,246 -3,271 -11,190 -9,369
 

Financial source/requirement -7,133 -2,313 -6,895 -9,825
Net change in financing activities -7,214 -10,671 5,909 6,386
 

Net change in cash balances -14,347 -12,984 -986 -3,439
Cash balance at end of period     36,691 36,565
Note: Positive numbers indicate net source of funds. Negative numbers indicate net requirement for funds.
1 Certain comparative figures have been restated to reflect changes in accounting policy. See Note 8 at the end of this document for further details.
 

Revenues

Revenues in June 2019 totalled $27.9 billion, up $0.9 billion, or 3.5 per cent, from June 2018.

  • Tax revenues increased by $1.0 billion, or 4.5 per cent.
  • Fuel charge proceeds under the new federal carbon pollution pricing system totaled $0.1 billion.
  • Employment Insurance (EI) premium revenues increased by $28 million, or 1.4 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 10.7 per cent, largely reflecting lower interest and penalties revenues.

For the April to June period of 2019–20, revenues were $84.4 billion, up $3.2 billion, or 4.0 per cent, from the same period the previous year.

  • Tax revenues increased by $2.7 billion, or 3.9 per cent, driven largely by growth in personal income tax revenues.
  • Fuel charge proceeds totaled $0.1 billion over the April to June period of 2019-20.
  • EI premium revenues were up $0.1 billion, or 0.8 per cent. 
  • Other revenues were up $0.4 billion, or 5.3 per cent, largely reflecting higher net foreign exchange revenues.
Table 2
Revenues
June   April - June  
 
 
 
2018
Restated1
2019 Change 2018–19
Restated1
2019–20 Change
($ millions) (%) ($ millions) (%)
Tax revenues            
  Income taxes            
    Personal 12,433 14,366 15.5 37,743 40,639 7.7
    Corporate 5,253 4,269 -18.7 13,642 13,077 -4.1
    Non-resident 650 639 -1.7 2,063 2,128 3.2
 

    Total income tax revenues 18,336 19,274 5.1 53,448 55,844 4.5
  Other taxes and duties            
    Goods and Services Tax 2,763 2,970 7.5 10,132 10,180 0.5
    Energy taxes 441 444 0.7 1,320 1,371 3.9
    Customs import duties 455 433 -4.8 1,314 1,458 11.0
    Other excise taxes and duties 567 457 -19.4 1,548 1,576 1.8
 

    Total other taxes and duties 4,226 4,304 1.8 14,314 14,585 1.9
 

  Total tax revenues 22,562 23,578 4.5 67,762 70,429 3.9
Fuel charge proceeds 0 137 n/a 0 137 n/a
Employment Insurance premiums 2,054 2,082 1.4 6,625 6,680 0.8
Other revenues 2,310 2,062 -10.7 6,769 7,128 5.3
 

Total revenues 26,926 27,859 3.5 81,156 84,374 4.0
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 June 2019 were $24.7 billion, up $0.9 billion, or 3.9 per cent, from June 2018. 

  • Major transfers to persons, consisting of elderly, EI and children’s benefits, were up $0.4 billion, or 5.9 per cent. Elderly benefits increased by $0.6 billion, or 13.2 per cent, reflecting growth in the elderly population and changes in consumer prices, to which benefits are fully indexed. EI benefits decreased by $0.2 billion, or 12.4 per cent. Children’s benefits were up $27 million, or 1.3 per cent.
  • Major transfers to other levels of government were up $0.3 billion, or 4.5 per cent, largely reflecting legislated growth in the Canada Health Transfer, the Canada Social Transfer and Equalization transfers.
  • Direct program expenses were up $0.2 billion, or 2.2 per cent. Within direct program expenses:
    • Fuel charge proceeds returned reflects $0.1 billion in payments under the federal carbon pollution pricing system.
    • Other transfer payments decreased by $33 million. 
    • Other direct program expenses, consisting of operating expenses of the Government’s departments, agencies, and consolidated Crown corporations and other entities, increased by $0.2 billion, or 2.5 per cent.

Public debt charges were up $0.2 billion, or 7.7 per cent, reflecting higher Consumer Price Index adjustments on Real Return Bonds and a higher average effective interest rate on the stock of Treasury Bills.

For the April to June period of 2019–20, program expenses were $77.9 billion, up $7.3 billion, or 10.3 per cent, from the same period the previous year.

  • Major transfers to persons were up $0.9 billion, or 3.9 per cent. Elderly benefits increased by $1.0 billion, or 7.8 per cent, reflecting growth in the elderly population and changes in consumer prices. EI benefits decreased by $0.1 billion, or 2.1 per cent, and children’s benefits were down $14 million, or 0.2 per cent.
  • Major transfers to other levels of government were up $3.2 billion, or 17.9 per cent, primarily reflecting legislated growth in the Canada Health Transfer, the Canada Social Transfer, Equalization transfers and transfers to the territories; an increase in payments under home care and mental health transfers; and, transfers under the new Hibernia Dividend Backed Annuity Agreement reached on April 1, 2019 between Canada and Newfoundland and Labrador.
  • Direct program expenses were up $3.1 billion, or 10.7 per cent. Within direct program expenses:
    • Fuel charge proceeds returned totaled $1.2 billion.
    • Other transfer payments increased by $0.7 billion, or 8.8 per cent, reflecting increases across a number of departments.
    • Other direct program expenses increased by $1.2 billion, or 5.7 per cent, reflecting in part an increase in personnel costs.

Public debt charges increased by $0.7 billion, or 11.5 per cent, reflecting higher Consumer Price Index adjustments on Real Return Bonds and a higher average effective interest rate on the stock of Treasury Bills.

Table 3
Expenses
June   April - June
 
 
 
2018
Restated1
2019 Change 2018–19
Restated1
2019–20 Change
  ($ millions) (%) ($ millions) (%)
Major transfers to persons            
  Elderly benefits 4,361 4,938 13.2 13,024 14,038 7.8
  Employment Insurance benefits 1,254 1,098 -12.4 4,373 4,282 -2.1
  Children’s benefits 2,033 2,060 1.3 6,110 6,096 -0.2
 

  Total 7,648 8,096 5.9 23,507 24,416 3.9
Major transfers to other levels of government            
  Canada Health Transfer 3,215 3,364 4.6 9,646 10,093 4.6
  Canada Social Transfer 1,180 1,215 3.0 3,540 3,646 3.0
  Equalization 1,580 1,653 4.6 4,740 4,959 4.6
  Territorial Formula Financing 257 268 4.3 1,469 1,532 4.3
  Gas Tax Fund 0 0 n/a 0 0 n/a
  Home care and mental health 0 0 n/a 17 550 3,135.3
  Other fiscal arrangements2 -416 -425 -2.2 -1,248 630 150.5
 

  Total 5,816 6,075 4.5 18,164 21,410 17.9
Direct program expenses            
  Fuel charge proceeds returned 0 76 n/a 0 1,186 n/a
  Other transfer payments 3,082 3,049 -1.1 8,486 9,233 8.8
  Other direct program expenses 7,254 7,437 2.5 20,504 21,674 5.7
 

  Total direct program expenses 10,336 10,562 2.2 28,990 32,093 10.7
 

Total program expenses 23,800 24,733 3.9 70,661 77,919 10.3
Public debt charges 2,013 2,168 7.7 6,200 6,911 11.5
 

Total expenses 25,813 26,901 4.2 76,861 84,830 10.4
Note: Totals may not add due to rounding.
1 Certain comparative figures have been restated to reflect changes 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; payments to provinces in respect of common securities regulation; transfers under the new Hibernia Dividend Backed Annuity Agreement with Newfoundland and Labrador; and, other items.

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

 
Table 4
Total expenses by object of expense
  June   April - June  
 
 
 
  2018
Restated1
2019 Change 2018-19
Restated1
2019-20 Change
($ millions) (%) ($ millions) (%)
Transfer payments 16,546 17,296 4.5 50,157 56,245 12.1
Other expenses
  Personnel 4,414 4,559 3.3 13,093 13,800 5.4
  Transportation and communications 252 246 -2.4 541 528 -2.4
  Information 15 28 86.7 40 54 35.0
  Professional and special services 822 837 1.8 1,684 1,886 12.0
  Rentals 201 261 29.9 782 806 3.1
  Repair and maintenance 231 256 10.8 411 496 20.7
  Utilities, materials and supplies 199 217 9.0 510 528 3.5
  Other subsidies and expenses 728 600 -17.6 2,213 2,274 2.8
  Amortization of tangible capital assets 374 427 14.2 1,196 1,281 7.1
  Net loss on disposal of assets 18 6 -66.7 34 21 -38.2
 

  Total other expenses 7,254 7,437 2.5 20,504 21,674 5.7
 

Total program expenses 23,800 24,733 3.9 70,661 77,919 10.3
Public debt charges 2,013 2,168 7.7 6,200 6,911 11.5
 

Total expenses 25,813 26,901 4.2 76,861 84,830 10.4
Note: Totals may not add due to rounding.
1 Certain comparative figures have been restated to reflect changes in accounting policy. See Note 8 at the end of this document for further details.
 
Revenues and expenses (April to June 2019)
Revenues and expenses (April to June 2019) - For details, refer to preceding paragraphs.
Note: Totals may not add due to rounding.

Financial requirement of $9.8 billion for April to June 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 deficit of $0.5 billion and a requirement of $9.4 billion from non-budgetary transactions, there was a financial requirement of $9.8 billion for the April to June 2019 period, compared to a financial requirement of $6.9 billion for the same period the previous year.

 
Table 5
The budgetary balance and financial source/requirement
($ millions)
June April - June
 

2018
Restated1
2019 2018–19
Restated1
2019–20
Budgetary balance (deficit/surplus) 1,113 958 4,295 -456
Non-budgetary transactions        
  Accounts payable, accrued liabilities and
   accounts receivable
-5,523 -5,764 -10,147 -8,345
  Pensions, other future benefits, and other liabilities 664 584 1,448 1,915
  Foreign exchange accounts -2,774 3,044 -316 -500
  Loans, investments and advances -602 -1,073 -2,387 -2,685
  Non-financial assets -11 -62 212 246
 

  Total non-budgetary transactions -8,246 -3,271 -11,190 -9,369
 

Financial source/requirement -7,133 -2,313 -6,895 -9,825
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 $6.4 billion

The Government financed this financial requirement of $9.8 billion by decreasing cash balances by $3.4 billion and increasing unmatured debt by $6.4 billion. The increase in unmatured debt was achieved primarily through the issuance of marketable bonds.

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 June 2019 stood at $36.6 billion, down $0.1 billion from their level at the end of June 2018. 

 
Table 6
Financial source/requirement and net financing activities
($ millions)
June April - June
 

2018 2019 2018–19 2019–20
Financial source/requirement -7,133 -2,313 -6,895 -9,825
Net increase (+)/decrease (-) in financing activities        
  Unmatured debt transactions        
    Canadian currency borrowings        
      Marketable bonds -4,059 -644 -2,109 8,257
      Treasury bills -4,600 -6,500 8,600 600
      Retail debt -29 -13 -114 -67
 

      Total -8,688 -7,157 6,377 8,790
    Foreign currency borrowings 706 -1,142 523 -636
 

    Total -7,982 -8,299 6,900 8,154
    Cross-currency swap revaluation 846 -2,374 -367 -1,712
    Unamortized discounts and premiums on market debt -32 50 -520 55
    Obligations related to capital leases and other unmatured debt -46 -48 -104 -111
 

  Net change in financing activities -7,214 -10,671 5,909 6,386
Change in cash balance -14,347 -12,984 -986 -3,439
Cash balance at end of period     36,691 36,565
Note: Totals may not add due to rounding.

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. A 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 2018–19 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 $9 million increase in the budgetary surplus as of June 30, 2018. 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

    During 2018–19, the Canadian Commercial Corporation 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 decrease 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 following table provides an overview of these restatements of the 2018–19 financial results.
Table 7
Summary of Restatements
($ millions)
Program expenses Public debt charges Other revenues Budgetary balance (deficit/surplus) Non-budgetary transactions
June 2018          
As previously reported -23,809 -2,213 2,516 1,110 -8,243
Effect of change in accounting policy
  Change in discount rate methodology -197 200 n/a 3 -3
  Canadian Commercial Corporation 206 n/a -206 0 n/a
 
As restated -23,800 -2,013 2,310 1,113 -8,246
 
April to June 2018          
As previously reported -70,688 -6,800 7,387 4,286 -11,181
Effect of change in accounting policy
  Change in discount rate methodology -591 600 n/a 9 -9
  Canadian Commercial Corporation 618 n/a -618 0 n/a
 
As restated -70,661 -6,200 6,769 4,295 -11,190
 
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.

August 2019