Archived - The Fiscal Monitor A publication of the Department of Finance: 2017-02

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February 2017: budgetary surplus of $1.3 billion

There was a budgetary surplus of $1.3 billion in February 2017, compared to a surplus of $3.2 billion in February 2016. Revenues decreased by $0.4 billion, or 1.4 per cent, as an increase in income tax revenues was more than offset by decreases in excise taxes and duties, Employment Insurance (EI) premium revenues and other revenues. Program expenses increased by $1.5 billion, or 7.0 per cent, largely reflecting increases in major transfers to persons and direct program expenses. Public debt charges increased by $16 million.

April 2016 to February 2017: budgetary deficit of $11.5 billion

For the April to February period of the 2016–17 fiscal year, the Government posted a budgetary deficit of $11.5 billion, compared to a surplus of $7.5 billion reported for the same period of 2015–16. Revenues were down $0.4 billion, or 0.1 per cent, as an increase in tax revenues was more than offset by decreases in EI premium revenues and other revenues. Program expenses were up $20.0 billion, or 8.5 per cent, reflecting increases in major transfers to persons and other levels of government and direct program expenses. Public debt charges were down $1.5 billion, or 6.3 per cent, largely reflecting a lower average effective interest rate on the stock of interest-bearing debt.

There was a budgetary surplus of $1.3 billion in February 2017, down $1.9 billion from the budgetary surplus reported for February 2016.

Revenues in February 2017 totalled $26.3 billion, down $0.4 billion, or 1.4 per cent, from February 2016.

Total program expenses in February 2017 were $23.3 billion, up $1.5 billion, or 7.0 per cent, from February 2016.

Public debt charges increased by $16 million, or 1.0 per cent.

For the April to February period of the 2016–17 fiscal year, there was a budgetary deficit of $11.5 billion, compared to a surplus of $7.5 billion reported during the same period of 2015–16.

Revenues decreased by $0.4 billion, or 0.1 per cent, to $265.1 billion.

Program expenses totaled $254.6 billion over the April to February period of 2016–17, up $20.0 billion, or 8.5 per cent, from the same period the previous year.

Public debt charges were down $1.5 billion, or 6.3 per cent, largely reflecting a lower average effective interest rate on the stock of interest-bearing debt.

Revenues and expenses (April 2016 to February 2017)

Revenues and expenses (April 2016 to February 2017) - For details, refer to preceding paragraphs.
Note: Totals may not add due to rounding.

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 $11.5 billion and a financial requirement of $9.7 billion from non-budgetary transactions, there was a financial requirement of $21.2 billion for the April 2016 to February 2017 period, compared to a financial requirement of $14.1 billion over the same period the previous year.

The Government financed its financial requirement of $21.2 billion and increased cash balances by $6.1 billion by increasing unmatured debt by $27.3 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 February 2017 stood at $44.0 billion, up $1.1 billion from their level at the end of February 2016.

Table 1
Summary statement of transactions
$ millions

February April to February


2016 2017 2015–16 2016–17
Budgetary transactions
Revenues 26,648 26,271 265,486 265,116
Expenses
Program expenses -21,764 -23,283 -234,529 -254,572
Public debt charges -1,679 -1,695 -23,484 -22,002


Budgetary balance (deficit/surplus) 3,205 1,293 7,473 -11,458
Non-budgetary transactions -83 -3,048 -21,622 -9,704


Financial source/requirement 3,122 -1,755 -14,149 -21,162
Net change in financing activities -10,433 120 29,033 27,273


Net change in cash balances -7,311 -1,635 14,884 6,111
Cash balance at end of period 42,835 43,956
Note: Positive numbers indicate a net source of funds. Negative numbers indicate a net requirement for funds.

Table 2
Revenues

February April to February


2016
($ millions)
2017
($ millions)
Change
(%)
2015–16
($ millions)
2016–17
($ millions)
Change
(%)
Tax revenues
Income taxes
Personal income tax 10,744 10,522 -2.1 127,587 126,596 -0.8
Corporate income tax 6,769 6,930 2.4 38,099 39,564 3.8
Non-resident income tax 365 804 120.3 5,883 6,704 14.0


Total income tax 17,878 18,256 2.1 171,569 172,864 0.8
Excise taxes and duties
Goods and Services Tax 2,556 2,313 -9.5 31,210 32,069 2.8
Energy taxes 455 439 -3.5 5,211 5,136 -1.4
Customs import duties 451 475 5.3 4,899 4,992 1.9
Other excise taxes and duties 427 316 -26.0 5,500 5,279 -4.0


Total excise taxes and duties 3,889 3,543 -8.9 46,820 47,476 1.4


Total tax revenues 21,767 21,799 0.1 218,389 220,340 0.9
Employment Insurance premiums 2,734 2,431 -11.1 20,506 20,114 -1.9
Other revenues 2,147 2,041 -4.9 26,591 24,662 -7.3


Total revenues 26,648 26,271 -1.4 265,486 265,116 -0.1
Note: Totals may not add due to rounding.

Table 3
Expenses

February April to February


2016
($ millions)
2017
($ millions)
Change
(%)
2015–16
($ millions)
2016–17
($ millions)
Change
(%)
Major transfers to persons
Elderly benefits 3,885 4,129 6.3 41,592 44,053 5.9
Employment Insurance benefits 1,870 1,940 3.7 17,850 19,051 6.7
Children's benefits 1,493 1,948 30.5 16,407 20,075 22.4


Total 7,248 8,017 10.6 75,849 83,179 9.7
Major transfers to other levels
of government
Support for health and other
social programs
Canada Health Transfer 2,836 3,006 6.0 31,189 33,062 6.0
Canada Social Transfer 1,080 1,112 3.0 11,879 12,236 3.0


Total 3,916 4,118 5.2 43,068 45,298 5.2
Fiscal arrangements and other transfers 1,939 1,731 -10.7 19,500 19,821 1.6
Canada's cities and communities 27 0 -100.0 1,937 2,064 6.6
Quebec Abatement -371 -249 -32.9 -4,081 -4,229 3.6


Total 5,511 5,600 1.6 60,424 62,954 4.2
Direct program expenses
Transfer payments
Agriculture and Agri-Food Canada 57 154 170.2 1,019 1,202 18.0
Employment and Social Development Canada 469 574 22.4 5,328 6,474 21.5
Global Affairs Canada 429 273 -36.4 2,831 3,105 9.7
Health Canada 99 109 10.1 2,652 2,823 6.4
Indigenous and Northern Affairs Canada 370 638 72.4 6,292 7,549 20.0
Innovation, Science and Economic Development Canada 185 498 169.2 938 3,095 230.0
Other 771 778 0.9 9,019 9,889 9.6


Total 2,380 3,024 27.1 28,079 34,137 21.6
Other direct program expenses
Crown corporations 823 715 -13.1 7,836 8,414 7.4
National Defence 1,949 1,984 1.8 20,660 21,792 5.5
All other departments
and agencies
3,853 3,943 2.3 41,681 44,096 5.8


Total other direct program expenses 6,625 6,642 0.3 70,177 74,302 5.9


Total direct program expenses 9,005 9,666 7.3 98,256 108,439 10.4


Total program expenses 21,764 23,283 7.0 234,529 254,572 8.5
Public debt charges 1,679 1,695 1.0 23,484 22,002 -6.3


Total expenses 23,443 24,978 6.5 258,013 276,574 7.2
Note: Totals may not add due to rounding.

Table 4
The budgetary balance and financial source/requirement
$ millions

February April to February


2016 2017 2015–16 2016–17
Budgetary balance (deficit/surplus) 3,205 1,293 7,473 -11,458
Non-budgetary transactions
Capital investment activities -419 -484 -3,979 -3,984
Other investing activities -172 -572 -6,111 -8,115
Pension and other accounts 397 294 4,439 6,773
Other activities
Accounts payable, receivables, accruals and allowances -3,596 -4,509 -8,424 -3,363
Foreign exchange activities 3,416 1,856 -11,356 -4,403
Amortization of tangible capital assets 291 367 3,809 3,388


Total other activities 111 -2,286 -15,971 -4,378


Total non-budgetary transactions -83 -3,048 -21,622 -9,704


Financial source/requirement 3,122 -1,755 -14,149 -21,162
Note: Totals may not add due to rounding.

Table 5
Financial source/requirement and net financing activities
$ millions

February April to February


2016 2017 2015–16 2016–17
Financial source/requirement 3,122 -1,755 -14,149 -21,162
Net increase (+)/decrease (-) in financing activities
Unmatured debt transactions
Canadian currency borrowings
Marketable bonds -1,723 201 15,477 33,941
Treasury bills -5,600 3,300 6,500 -1,600
Retail debt -27 -26 -589 -520


Total -7,350 3,475 21,388 31,821
Foreign currency borrowings -387 -4,294 3,447 -3,763


Total -7,737 -819 24,835 28,058
Cross-currency swap revaluation -2,657 1,070 3,718 -966
Unamortized discounts and premiums on market debt -20 -113 702 478
Obligations related to capital leases and other unmatured debt -19 -18 -222 -297


Net change in financing activities -10,433 120 29,033 27,273
Change in cash balance -7,311 -1,635 14,884 6,111
Note: Totals may not add due to rounding.

Table 6
Condensed statement of assets and liabilities
$ millions

March 31,
2016
February 28,
2017
Change
Liabilities
Accounts payable and accrued liabilities 127,853 131,565 3,712
Interest-bearing debt
Unmatured debt
Payable in Canadian currency
Marketable bonds 504,068 538,009 33,941
Treasury bills 138,100 136,500 -1,600
Retail debt 5,076 4,556 -520

Subtotal 647,244 679,065 31,821
Payable in foreign currencies 22,482 18,719 -3,763
Cross-currency swap revaluation 8,391 7,425 -966
Unamortized discounts and premiums on market debt 5,047 5,525 478
Obligations related to capital leases and other unmatured debt 5,047 4,750 -297

Total unmatured debt 688,211 715,484 27,273
Pension and other liabilities
Public sector pensions 152,227 151,716 -511
Other employee and veteran future benefits 85,681 92,772 7,091
Other liabilities 5,602 5,795 193

Total pension and other liabilities 243,510 250,283 6,773

Total interest-bearing debt 931,721 965,767 34,046

Total liabilities 1,059,574 1,097,332 37,758
Financial assets
Cash and accounts receivable 154,688 167,874 13,186
Foreign exchange accounts 93,539 97,942 4,403
Loans, investments, and advances (net of allowances)1 115,957 126,037 10,080
Public sector pension assets 1,639 1,639 0

Total financial assets 365,823 393,492 27,669

Net debt 693,751 703,840 10,089
Non-financial assets 77,765 78,361 596

Federal debt (accumulated deficit) 615,986 625,479 9,493
Note: Totals may not add due to rounding. 1 February 28, 2017 amount includes $2.0 billion in other comprehensive income from enterprise Crown corporations and other government business enterprises for the April 2016 to February 2017 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.

April 2017

© Her Majesty the Queen in Right of Canada (2017)

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