FISCAL MONITOR FOR JANUARY 2013
For the first ten months (April to January) of fiscal year 2012-13, the federal government posted a deficit of $13.4 billion, down $0.7 billion from the deficit of $14.1 billion reported in the same period in 2011-12.
Of this $0.7 billion improvement, budgetary revenues were up by $4.6 billion, reflecting higher revenues in all major components with the exception of non-resident taxes and “other revenues”. Public debt charges declined by $1.6 billion, reflecting the impact of lower effective interest rates, as the stock of interest-bearing debt increased. Program expenses were up by $5.5 billion, with higher expenses recorded in all of the major components, with the exception of employment insurance benefits. Part of the $5.5 billion year-over-year increase in program expenses was attributable to a receivable of $1.6 billion from British Columbia for the repayment of HST transitional assistance. The impact of this receivable will be more than offset in March, with the recording of a liability of $2.2 billion to Quebec for HST transitional assistance.
In Budget 2013, the Minister of Finance revised down his forecast for the deficit in 2012-13 marginally from $26 billion to $25.9 billion... However, included in the revised estimate is a liability of $2.4 billion for AECL environmental liabilities. This means that the underlying deficit estimate for 2012-13 is $23.5 billion, roughly in line with our estimate for the year as a whole.
Based on the results to date, the deficit could still come in slightly lower than estimated in Budget 2013. This gives the Minister some flexibility in meeting his revised deficit target in the event end-of-year accrual adjustments come in somewhat larger than currently estimated.
Normally, the Fiscal Monitor is released on the last Friday of each month. There are two regular exceptions: the April and May Fiscal Monitors are combined so there is no separate April Fiscal Monitor, and the October Fiscal Monitor is released in the week before the Christmas break. However, depending on the timing of the budget/update, the Fiscal Monitor is released with the budget/update. The January 2013 Fiscal Monitor was released with Budget 2013, over a week ahead of its previously announced release date. This raises the question as to why it cannot be consistently released in the third week of the month. This would consistent with IMF publication guidelines.