The federal government posted a surplus of $4.3 billion in February 2019, compared to a surplus of $2.8 billion in February 2018. 

Budgetary revenues increased 12.2%, primarily due to strong increases in personal income taxes (up 12.6%), in part attributable to timing factors given that receipts declined on a year-over-year basis in January 2019, and corporate income taxes (up 16%).  February is the settlement period for those corporations having a taxation year ending in December. This implies, that in aggregate, these corporations did much better in 2018 than in 2017. In addition, non-resident taxes were up 46.8%, customs import duties increased 14.9%, while other revenues were up 17.3%. Program expenses advanced 6.9%, primarily due to a 11.6% increase in direct program expenses, and an increase of 6.2% in major transfers to other levels of government primarily due to higher transfers to the Gas Tax Fund. Public debt charges increased 19.9%, primarily attributable to timing factors as a decline of 15.3% was recorded in January 2019 on a year-over-year basis.

For the first eleven months of fiscal year 2018-19, the federal government posted a surplus of $3.1 billion compared to a deficit of $6.0 billion in the same eleven months of 2017-18. Budgetary revenues were up $23.5 billion, or 8.5%, program expenses increased by $12.7 billion, or 4.8%, while public debt charges were up $1.7 billion, or 8.4%, from year earlier levels.
Within budgetary revenues, personal income tax revenues were up $8.9 billion or 6.6%, corporate income tax revenues increased by $5.5 billion or 12.6%, non-resident taxes were up $1.7 billion or 22.3%, goods and services tax revenues advanced $2.5 billion or 7.3%, customs import duties increased $1.3 billion or 26.3% while other revenues increased by $2.7 billion or 11.9%. The year-to-date results for all the major components are broadly in line with the revised forecasts presented in the March 17, 2019 Budget, with the exception of corporate income taxes and other revenues. In total, these two components are $3.1 billion higher than their respective total forecast in the March 2019 Budget.

Within grogram expenses, major transfers to persons were up 2.3% or $1.9 billion.  Elderly benefits increased 5.2% or $2.4 billion, reflecting in an increase in the eligible population and higher average benefits which are indexed to inflation.  Children’s benefits increased by 2.0% or $435 million, primarily due to an increase in the eligible population.  Partially offsetting these increases was a decline in employment insurance benefits (down 5.0% or $915 million) reflecting a decline in the number of unemployed. In aggregate, the increase in major transfers to persons is in line with that forecast in the March 2019 Budget.
Major transfers to provinces and territories were up 3.7% or $2.4 billion, while the March 2019 Budget forecast an increase of 7.8% or $5.5 billion. The increases in the components are largely consistent with the increases as set out in their applicable legislation, with difference attributable to timing of receipts.  For example, the March 2019 Budget proposed a one-time transfer of $2.2 billion through the Gas Tax Transfer. This will be reflected in the end-of-year supplementary adjustment period once the enabling legislation receives Royal Assent.

Direct program expenses, which includes other subsidies and transfers and the operating costs of government, increased by 7.5% or $8.4 billion.  Other transfers were up 11.3% or $3.9 billion.  The March 2019 Budget forecast an increase of 16.0% or $7.6 billion. However, included in this estimate is $1.1 billion for energy efficiency measures and $0.6 billion related to the Fuel Charge Refund. Again, these expenses will be reflected in the end-of-year supplementary adjustment period once the enabling legislation receives Royal Assent.  Other direct program expenses (the operating costs of government) increased by 5.8% or$4.5 billion, primarily reflecting higher personnel expenses and in other subsidies and expenses.  The March 2019 Budget forecast virtually no change in other direct program expenses on a year-over-year basis.. However, the final results for 2017-18 included several large year end accrual adjustments. A significantly smaller adjustment is expected this year. The final outcome will largely be dependent on year-end accrual adjustments.

The increase in public debt charges reflected higher Consumer Price Index adjustments on Real Return Bonds and higher annual average effective interest rates on the stock of Treasury Bills. The year-to-date increase is roughly in line with the March 2019 Budget forecast.  

The March 2019 Budget forecast a deficit of $14.9 billion for 2018-19, $4.0 billion lower than the final outcome for 2017-18. The financial results to the end of February 2019 indicate a decline of $9.1 billion from year earlier results. Some of this will be reduced once enabling legislation relating to a number of budget proposals receives Royal Assent.  As noted above, this could amount to $4.7 billion. This would make the current results broadly consistent with the March 2019 Budget forecast. However, the final outcome could still be $2 to $3 billion lower than forecast in the March 2019 Budget, given the unexpected strength in rev enues.