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Highlights

January 2012: budgetary surplus of $1.7 billion

There was a budgetary surplus of $1.7 billion in January 2012, compared to a deficit of $0.3 billion in January 2011. This surplus, the first since February 2009, largely reflects the recording of a $1.6-billion receivable from British Columbia for the repayment of federal transitional assistance, resulting from the province’s decision to exit the Harmonized Sales Tax (HST). The repayment will follow a schedule agreed to between the two governments in January 2012. Absent the recovery of transitional assistance from British Columbia, there would have been a small surplus in the month. This reflects a recurring seasonal trend whereby the results for December to February are generally stronger than for the rest of the year due to higher personal and corporate income tax receipts. These results have been incorporated in Budget 2012, released today.

Revenues increased by $1.7 billion, or 7.7 per cent, reflecting increases in most revenue streams. Program expenses were down $0.2 billion, or 1.3 per cent, reflecting a decrease in transfer payments, partially offset by an increase in other program expenses. Public debt charges decreased by $0.1 billion.

April 2011 to January 2012: budgetary deficit of $16.0 billion

For the first 10 months of the 2011–12 fiscal year, the budgetary deficit stood at $16.0 billion, compared to a deficit of $27.7 billion reported in the same period of 2010–11.

Revenues were up $8.7 billion, or 4.6 per cent, primarily reflecting higher income tax revenues, which were partially offset by lower Goods and Services Tax (GST) revenues and other revenues. Program expenses were down $3.3 billion, or 1.7 per cent. Public debt charges were up $0.3 billion.

January 2012

There was a budgetary surplus of $1.7 billion in January 2012, compared to a $0.3-billion deficit in January 2011.

Revenues increased by $1.7 billion, or 7.7 per cent, to $23.3 billion.

  • Personal income tax revenues were up $1.0 billion, or 9.6 per cent.
  • Corporate income tax revenues were up $0.5 billion, or 20.1 per cent.
  • Non-resident income tax revenues were down $0.4 billion, or 33.1 per cent.
  • Excise taxes and duties were up $0.3 billion, or 8.2 per cent. GST revenues were up $0.2 billion, or 12.4 per cent. Energy taxes were down $3 million, customs import duties were up $34 million, and other excise taxes and duties were down $15 million.
  • Employment Insurance (EI) premium revenues were up $0.1 billion, or 6.5 per cent, consistent with the 5-cent increase in the employee premium rate effective January 1, 2012. As announced on November 8, 2011, the Government reduced the maximum potential increase in EI premium rates in 2012 from 10 cents to 5 cents. The premium rate for 2012 is $1.83 per $100 of insurable earnings.
  • 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 $0.1 billion, or 6.0 per cent.

Program expenses in January 2012 totalled $19.0 billion, down $0.2 billion, or 1.3 per cent, from January 2011. Program expenses include transfer payments and other program expenses.

Transfer payments decreased by $0.9 billion, or 6.7 per cent.

  • Major transfers to persons, consisting of elderly, EI and children's benefits, increased by $0.1 billion, or 1.5 per cent. Elderly benefits increased by $0.3 billion, or 8.6 per cent, reflecting the introduction of the Guaranteed Income Supplement top-up benefit in July 2011, as well as growth in the elderly population and changes in consumer prices, to which benefits are fully indexed. EI benefit payments decreased by $0.2 billion, or 8.4 per cent, reflecting a decrease in regular benefits. Children's benefits, which consist of the Canada Child Tax Benefit and the Universal Child Care Benefit, increased by $12 million.
  • Major transfers to other levels of government, consisting of federal transfers in support of health and other social programs (primarily the Canada Health Transfer and the Canada Social Transfer), fiscal 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, decreased by $1.3 billion, or 30.9 per cent, primarily reflecting the recording of a $1.6-billion receivable from British Columbia for the repayment of HST transitional assistance, offset in part by legislated growth in transfers.
  • Other transfer payments were up $0.3 billion, or 9.8 per cent, reflecting both increases and decreases across a number of departments.

Other program expenses consist of operating expenses of Crown corporations, departments and agencies, including National Defence, and also reflect the ongoing assessment of the Government's liabilities. These expenses increased by $0.7 billion, or 11.1 per cent, from the previous year.

Public debt charges decreased by $0.1 billion.

April 2011 to January 2012

For the first 10 months of the 2011–12 fiscal year, there was a budgetary deficit of $16.0 billion, compared to a deficit of $27.7 billion reported during the same period of 2010–11.

Revenues increased by $8.7 billion, or 4.6 per cent, to $197.5 billion.

  • Personal income tax revenues were up $6.7 billion, or 7.1 per cent.
  • Corporate income tax revenues were up $2.6 billion, or 13.0 per cent, reflecting an increase in receipts of about 4.3 per cent and a decrease of 10.2 per cent in refunds of taxes paid.
  • Non-resident income tax revenues were up $30 million, or 0.7 per cent.
  • Excise taxes and duties were down $0.5 billion, or 1.5 per cent, as a result of a decrease in GST revenues of about $0.8 billion, or 3.4 per cent. Energy taxes were up $16 million, customs import duties were up $0.3 billion, and other excise taxes and duties were down $0.1 billion.
  • EI premium revenues were up $0.7 billion, or 5.1 per cent, reflecting growth in insurable earnings and higher premium rates of $1.78 and $1.83 per $100 of insurable earnings for 2011 and 2012, respectively.
  • Other revenues were down $0.8 billion, due in large part to gains realized in November and December 2010 on the Government's sale of shares in General Motors.

For the April 2011 to January 2012 period, program expenses were $187.4 billion, down $3.3 billion, or 1.7 per cent, from the same period the previous year.

Transfer payments decreased by $4.2 billion, or 3.2 per cent.

  • Major transfers to persons were up $0.2 billion, or 0.4 per cent. Elderly benefits increased by $2.0 billion, or 6.7 per cent, reflecting the introduction of the Guaranteed Income Supplement top-up benefit, as well as growth in the elderly population and changes in consumer prices, to which benefits are fully indexed. EI benefit payments decreased by $1.9 billion, or 11.7 per cent, reflecting a decrease in regular benefits. Children's benefits were up $0.1 billion, or 1.3 per cent.
  • Major transfers to other levels of government were up $1.2 billion, or 2.7 per cent, reflecting legislated growth in transfers and transfer protection payments to provinces, as well as an increase in transfers to Canada's cities and communities, offset in part by the recording of a $1.6-billion receivable from British Columbia for the repayment of HST transitional assistance.
  • Other transfer payments were down $5.6 billion, or 19.7 per cent, reflecting declines across a number of departments, including: a decline in agriculture transfers, reflecting a decrease in estimated statutory grants and contributions; a decrease in infrastructure transfers, consistent with the wind-down of the stimulus provided through Canada's Economic Action Plan; and the revaluation of the Government's liability to Ontario for the province's one third participation in the value of the Government's common shares in General Motors.

Other program expenses increased by $0.9 billion, or 1.5 per cent, from the previous year's level.

Public debt charges increased by $0.3 billion, or 1.1 per cent, reflecting a higher stock of interest-bearing debt.

Revenues: April to January 2012
Revenues $billions
EI premiums 14.2
Corporate income taxes 22.4
Other revenues 25.5
Excise taxes and duties 34.0
Personal income taxes 101.3
Total 197.5
Expenses: April to January 2012
Expenses $billions
Other transfer payments 22.8
Public debt charges 26.1
Major transfers to other levels of gov't 45.6
Major transfers to persons 57.0
Other program expenses 62.0
Total 213.5

Financial requirement of $30.2 billion for April 2011 to January 2012

The budgetary balance is presented on an accrual basis of accounting, recording government revenues and expenses when they are receivable 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 $16.0 billion and a requirement of $14.2 billion from non-budgetary transactions, there was a financial requirement of $30.2 billion for the April 2011 to January 2012 period, compared to a financial requirement of $43.6 billion for the same period the previous year.

Net financing activities up $31.2 billion

The Government financed this financial requirement of $30.2 billion and increased cash balances by $1.0 billion by increasing market debt by $31.2 billion. The increase in market 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 January 2012 stood at $11.2 billion, up $5.0 billion from their level at the end of January 2011.

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

  2011 2012 2010–11 2011–12
Budgetary transactions        
  Revenues 21,588 23,254 188,784 197,501
  Expenses        
    Program expenses -19,271 -19,027 -190,639 -187,367
    Public debt charges -2,618 -2,508 -25,813 -26,108
 

  Budgetary balance (deficit/surplus)  -301 1,719 -27,668 -15,974
Non-budgetary transactions 1,549 727 -15,947 -14,183
 

Financial source/requirement 1,248 2,446 -43,615 -30,157
Net change in financing activities -2,370 -190 24,192 31,157
 

Net change in cash balances -1,122 2,256 -19,423 1,000
Cash balance at end of period 6,202 11,158
Note: Positive numbers indicate net source of funds. Negative numbers indicate net requirement for funds.

 

 
Table 2
Revenues
  January    April to January  
 
 
 
  2011
($ millions)
2012
($ millions)
 Change
(%)
2010–11
($ millions)
2011–12
($ millions)
 Change
(%)
Tax revenues            
  Income taxes            
    Personal income tax 10,785 11,818 9.6 94,604 101,319 7.1
    Corporate income tax 2,249 2,701 20.1 19,857 22,430 13.0
    Non-resident income tax 1,056 706 -33.1 4,451 4,481 0.7
 

    Total income tax 14,090 15,225 8.1 118,912 128,230 7.8
  Excise taxes and duties            
    Goods and Services Tax 1,955 2,197 12.4 22,511 21,751 -3.4
    Energy taxes 445 442 -0.7 4,449 4,465 0.4
    Customs import duties 295 329 11.5 2,875 3,191 11.0
    Other excise taxes and duties 465 450 -3.2 4,686 4,596 -1.9
 

    Total excise taxes and duties 3,160 3,418 8.2 34,521 34,003 -1.5
 

  Total tax revenues 17,250 18,643 8.1 153,433 162,233 5.7
Employment Insurance premiums 2,188 2,331 6.5 13,511 14,204 5.1
Other revenues 2,150 2,280 6.0 21,840 21,064 -3.6
 

Total revenues 21,588 23,254 7.7 188,784 197,501 4.6
Note: Totals may not add due to rounding.

 

 
Table 3
Expenses
   January    April to January  
 
 
 
  2011
($ millions)
2012
($ millions)
 Change
(%)
2010–11
($ millions)
2011–12
($ millions)
 Change
(%)
Transfer payments            
  Major transfers to persons            
    Elderly benefits 3,020 3,279 8.6 29,615 31,614 6.7
    Employment Insurance benefits 2,100 1,924 -8.4 16,530 14,599 -11.7
    Children's benefits 1,089 1,101 1.1 10,656 10,791 1.3
 

    Total 6,209 6,304 1.5 56,801 57,004 0.4
  Major transfers to other levels
   of government
           
    Support for health and other
     social programs
           
      Canada Health Transfer 2,181 2,263 3.8 21,703 22,645 4.3
      Canada Social Transfer 932 959 2.9 9,316 9,595 3.0
 

      Total 3,113 3,222 3.5 31,019 32,240 3.9
    Fiscal transfers1 1,392 -81 -105.8 14,819 14,587 -1.6
    Canada's cities and communities 0 60 n/a 1,619 2,043 26.2
    Quebec Abatement1,2 -352 -333 -5.4 -3,043 -3,245 6.6
 

    Total 4,153 2,868 -30.9 44,414 45,625 2.7
  Other transfer payments    
    Aboriginal Affairs and
     Northern Development 
474 666 40.5 4,534 4,567 0.7
    Agriculture and Agri-Food 319 109 -65.8 1,791 1,386 -22.6
    Foreign Affairs and International
     Trade
351 400 14.0 2,612 2,491 -4.6
    Health 271 269 -0.7 2,148 2,143 -0.2
    Human Resources and Skills
     Development
445 553 24.3 3,070 2,802 -8.7
    Industry 519 153 -70.5 2,715 1,927 -29.0
    Other 643 1,167 81.5 11,466 7,438 -35.1
 

    Total 3,022 3,317 9.8 28,336 22,754 -19.7
 

  Total transfer payments 13,384 12,489 -6.7 129,551 125,383 -3.2
Other program expenses
  Crown corporations 954 897 -6.0 8,857 8,283 -6.5
  Defence 1,617 2,035 25.9 15,605 17,003 9.0
  All other departments and agencies 3,316 3,606 8.7 36,626 36,698 0.2
 

  Total other program expenses 5,887 6,538 11.1 61,088 61,984 1.5
 

Total program expenses 19,271 19,027 -1.3 190,639 187,367 -1.7
Public debt charges 2,618 2,508 -4.2 25,813 26,108 1.1
 

Total expenses 21,889 21,535 -1.6 216,452 213,475 -1.4
Note: Totals may not add due to rounding.
(1) Comparative figures have been reclassified to conform to the presentation in the 2010-11 audited financial statements.
(2) These amounts represent recoveries of the Quebec Abatement which is comprised of federal tax abated under the Alternative Payments for Standing Programs and the Youth Allowance Program of that province.

 

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

  2011 2012 2010–11 2011–12
Budgetary balance (deficit/surplus) -301 1,719 -27,668 -15,974
Non-budgetary transactions        
  Capital investment activities -449 -202 -3,997 -2,119
  Other investing activities -62 -1,779 -2,345 -1,113
  Pension and other accounts 517 265 4,782 3,704
  Other activities        
    Accounts payable, receivables, accruals and allowances 3,133 1,503 -17,051 -12,680
    Foreign exchange activities -1,982 585 -1,096 -5,466
    Amortization of tangible capital assets 392 355 3,760 3,491
 

    Total other activities 1,543 2,443 -14,387 -14,655
 

  Total non-budgetary transactions 1,549 727 -15,947 -14,183
 

Financial source/requirement 1,248 2,446 -43,615 -30,157
Note: Totals may not add due to rounding.

 

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

  2011 2012 2010–11 2011–12
Financial source/requirement 1,248 2,446 -43,615 -30,157
Net increase (+)/decrease (-) in financing activities        
  Unmatured debt transactions        
    Canadian currency borrowings        
      Marketable bonds 4,805 4,399 37,040 30,213
      Treasury bills -7,700 -3,900 -10,900 900
      Retail debt 2 16 -1,528 -1,075
      Other 0 0 -425 -16
 

      Total -2,893 515 24,187 30,022
    Foreign currency borrowings -37 -325 -439 349
 

    Total -2,930 190 23,748 30,371
    Cross-currency swap revaluation 578 -496 -267 601
    Unamortized discounts and premiums on market debt -14 79 816 270
    Obligations related to capital leases -4 37 -105 -85
 

  Net change in financing activities -2,370 -190 24,192 31,157
 

Change in cash balance -1,122 2,256 -19,423 1,000
Note: Totals may not add due to rounding.

 

 
Table 6
Condensed statement of assets and liabilities
$ millions
  March 31, 2011 January 31, 2012 Change
Liabilities      
  Accounts payable and accrued liabilities 119,060 107,730 -11,330
  Interest-bearing debt      
    Unmatured debt      
      Payable in Canadian currency      
        Marketable bonds 416,080 446,293 30,213
        Treasury bills 162,980 163,880 900
        Retail debt 10,141 9,066 -1,075
        Other 27 11 -16
 
        Subtotal 589,228 619,250 30,022
      Payable in foreign currencies 7,628 7,977 349
      Cross-currency swap revaluation -5,091 -4,490 601
      Unamortized discounts and premiums
       on market debt
-4,485 -4,215 270
      Obligations related to capital leases
       and other unmatured debt
3,875 3,790 -85
 
      Total unmatured debt 591,155 622,312 31,157
    Pension and other liabilities  
        Public sector pensions 146,135 147,987 1,852
        Other employee and veteran future benefits 58,206 59,677 1,471
        Other liabilities 6,315 6,696 381
 
        Total pension and other liabilities 210,656 214,360 3,704
 
    Total interest-bearing debt 801,811 836,672 34,861
 
  Total liabilities 920,871 944,402 23,531
 
Financial assets  
  Cash and accounts receivable 96,907 99,257 2,350
  Foreign exchange accounts 48,507 53,973 5,466
  Loans, investments, and advances (net of allowances)1 158,549 153,574 -4,975
 
  Total financial assets 303,963 306,804 2,841
 
Net debt 616,908 637,598 20,690
Non-financial assets 66,581 65,209 -1,372
 
Federal debt (accumulated deficit) 550,327 572,389 22,062
Note: Totals may not add due to rounding.
(1) January 31, 2012 amount includes $2.8 billion in other comprehensive losses reported by enterprise Crown corporations and other government business enterprises and $3.3 billion in transitional adjustments resulting from the adoption of International Financial Reporting Standards by enterprise Crown corporations and other government business enterprises.

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

For inquiries about this publication, contact Doug Nevison at 613-996-0321.
March 2012