FISCAL MONITOR FOR FEBRUARY 2013
For the period April to February of fiscal year 2012-13, the federal government posted a deficit of $11.8 billion, down $0.8 billion from the deficit of $12.6 billion reported in the same period in 2011-12.
Of this $0.8 billion improvement, budgetary revenues were up by $5.1 billion, reflecting higher revenues in all major components with the exception of corporate income taxes, non-resident taxes and “other revenues”. Public debt charges declined by $1.7 billion, reflecting the impact of lower effective interest rates, as the stock of interest-bearing debt increased. Program expenses were up by $6.1 billion, with higher expenses recorded in all of the major components, with the exception of employment insurance benefits. Part of the 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, which was “booked” in January 2012, thereby lowering program expenses in that month. The impact of this receivable will be more than offset in March 2013, or in the end-of-year accounting period for fiscal year 2012-13, 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 the forecast for the deficit in 2012-13 marginally, from $26 billion to $25.9 billion... However, the revised estimate includes $2.4 billion for AECL environmental liabilities. This means that the underlying deficit estimate for 2012-13 is $23.5 billion.
Although there is no “adjustment for risk” factor included in the deficit estimate for 2012-13, the results to date suggest that 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.