Finance Canada
Annual Financial Report 1999-2000: 7
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Condensed Financial Statements of the Government of Canada

The fundamental purpose of these condensed financial statements is to provide an overview of the financial affairs and the resources for which the Government is responsible under authority granted by Parliament. Responsibility for the integrity and objectivity of these statements rests with the Government.

These financial statements are extracted and condensed from the audited financial statements included in Section 1 of Volume I of the 2000 Public Accounts of Canada, which are expected to be tabled in Parliament later this year. As these condensed financial statements are, by their nature, summarized, they do not include all disclosure required for financial reporting by governments in Canada. Readers interested in the disclosure of more detailed data should refer to the audited financial statements in the Public Accounts.

Table 7
Government of Canada
Condensed Statement of Revenues, Expenditures and Accumulated Deficit for the Year Ended March 31, 2000
2000 1999
($ millions)
Revenues
  Tax revenues
     Income tax 111,493 102,183
     Excise taxes and duties 35,806 34,249
     Employment insurance premiums 18,512 19,363
165,811 155,795
  Non-tax revenues 12,279 11,748
Total gross revenues 178,090 167,543
Amounts deducted to arrive at net revenues 12,382 11,872
Total net revenues 165,708 155,671
Expenditures
  Transfer payments
     Old Age Security and related payments 22,856 22,285
     Other levels of government 23,243 25,523
     Employment insurance benefits 11,301 11,884
     Other transfer payments 27,455 27,300
84,855 86,992
  Crown corporation expenditures 4,344 4,995
  Other program expenditures 34,946 31,278
Total gross program expenditures 124,145 123,265
Amounts deducted to arrive at net program expenditures 12,382 11,872
Total net program expenditures 111,763 111,393
  Interest on debt 41,647 41,394
Total net expenditures 153,410 152,787
Surplus for the year 12,298 2,884
  Accumulated deficit at beginning of year 576,824 579,708
Accumulated deficit at end of year 564,526 576,824

 

Table 8
Government of Canada
Condensed Statement of Assets and Liabilities
as at March 31, 2000

2000 1999
($ millions)
Liabilities
  Payables, accruals and allowances
     Accounts payable and accruals 28,904 34,300
     Allowances for guarantees and employee benefits 11,844 11,016
     Total 40,748 45,316
  Interest-bearing debt
     Unmatured debt
       Marketable bonds 293,927 295,752
       Treasury bills 99,850 96,950
       Canada Savings Bonds 26,489 27,662
       Non-marketable bonds and notes 3,552 4,063
       Total payable in Canadian currency 423,818 424,427
       Payable in foreign currencies 32,588 36,000
       Total 456,406 460,427
     Pension and other accounts
       Public sector pensions 128,346 122,407
       Due to Canada Pension Plan 6,217 5,427
       Other 6,963 6,724
       Total 141,526 134,558
  Total interest-bearing debt 597,932 594,985
Total liabilities 638,680 640,301
Assets
  Cash and accounts receivable
     Cash 14,511 10,693
     Accounts receivable 4,353 4,580
     Total 18,864 15,273
  Foreign exchange accounts 41,494 34,668
  Loans, investments and advances
     Enterprise Crown corporations and other
      government business enterprises		 10,562 11,052
     National governments and international organizations 7,316 7,555
     Other 4,184 4,341
     Total 22,062 22,948
     Less allowance for valuation 8,266 9,412
     Total 13,796 13,536
Total assets 74,154 63,477
Accumulated deficit 564,526 576,824

 

Table 9
Government of Canada
Condensed Statement of Changes in Financial Position
for the Year Ended March 31, 2000
2000 1999
($ millions)
Cash provided by operating activities
  Surplus for the year 12,298 2,884
  Add expenditures not requiring cash 8,510 11,016
20,808 13,900
  Net payments from pension and other accounts (4,010) (3,081)
  Net change in receivables, payables and accruals (3,272) 181
13,526 11,000
Cash provided by investing activities
  Net decrease in loans, investments and advances 1,139 566
Cash provided by foreign exchange activities
  Net increase in foreign currency borrowings (3,412) 8,817
  Net increase in foreign exchange accounts (6,826) (5,700)
(10,238) 3,117
Net cash generated before financing activities 4,427 14,683
Cash used for financing activities
  Net decrease in Canadian currency borrowings 609 15,681
Net increase (decrease) in cash 3,818 (998)
Cash at beginning of year 10,693 11,691
Cash at end of year 14,511 10,693

 

Government of Canada
Notes to the Condensed Financial Statements

Significant Accounting Policies

The Government of Canada reporting entity includes all departments, agencies, corporations and funds which are owned or controlled by the Government and which are accountable to Parliament. The financial activities of all these entities are consolidated in these statements, except for enterprise Crown corporations and other government business enterprises, which are not dependent on the Government for financing their activities. These corporations are reported as investments at their original cost adjusted by an allowance for valuation to reflect their annual profits or losses. The Canada Pension Plan is excluded from the reporting entity, as it is under the joint control of the Government and participating provinces.

The Government basically accounts for transactions on an accrual basis. Two notable exceptions are tax revenues and related refunds, which are generally accounted for on a cash basis; and capital assets, which are fully charged to expenditures at the time of acquisition or construction.

As a consequence, the only assets recorded on the Condensed Statement of Assets and Liabilities are financial assets, as they can provide resources to discharge liabilities or finance future operations. Assets are recorded at the lower of cost or net realizable value. Liabilities are recorded on an accrual basis with public sector pension and severance liabilities being determined on an actuarial basis. Valuation allowances are established for loan guarantees, concessionary and sovereign loans, and other obligations.

Some amounts in these statements are based on estimates and assumptions made by the Government. By their nature, such estimates are subject to measurement uncertainty, although all of them are believed to be reasonable.

Comparative figures for 1999 are reclassified to conform to the current year’s presentation.

Reporting of Revenues and Expenditures on a Gross Basis

Detailed amounts on the Condensed Statement of Revenues, Expenditures and Accumulated Deficit are presented on a full (gross) disclosure basis only. Gross revenues include revenues of consolidated Crown corporations and revenues of government departments, agencies and funds which, on the net basis, are deducted from expenditures for budget and parliamentary authority purposes. Gross expenditures include expenditures determined through the tax system, such as child tax benefits and quarterly GST credits, that are deducted from revenues on the net basis.

Contractual Commitments

Contractual commitments that will materially affect the level of future expenditures include transfer payment agreements; benefit plans for veterans and others; capital asset acquisitions and other purchases; operating and capital leases; and funding of international organizations. At March 31, 2000, contractual commitments amounted to approximately $33 billion ($31 billion in 1999).

Contingent Liabilities

Contingent or potential liabilities that may become actual liabilities in future years include guarantees by the Government; callable share capital in international organizations; claims and pending and threatened litigation; and environmental contingencies. Contingent liabilities related to guarantees by the Government and to international organizations amount to $67 billion ($62 billion in 1999). The total amount claimed against the Government for other claims and pending and threatened litigation but not assessed is not determinable. Of these other claims, over $200 billion relates to Aboriginal and comprehensive land claims. The Government is confident that the ultimate settlement for these contingent liabilities will be for amounts significantly lower than those being disclosed.

Insurance in force relating to self-sustaining insurance programs operated for the Government by three enterprise Crown corporations amounted to approximately $555 billion ($522 billion in 1999). The Government expects that it will not incur any costs to cover the claims for these programs.

Other Sources of Information

The Public Accounts of Canada

The Public Accounts of Canada, as required under Section 64(1) of the Financial Administration Act, are tabled in the fall of each year by the President of the Treasury Board. This report is presented in two volumes:

  • Volume I contains the Government’s audited financial statements and supporting schedules and information; and
  • Volume II contains details of financial operations by ministry (Part I) and additional information and analyses (Part II).

The Budget

The budget, usually introduced in February, presents the Government’s overall fiscal plan, incorporating revenue projections and spending plans, which combine to determine the resulting budgetary balance. The budget also introduces proposals for changes in taxation.

The Fiscal Monitor

This monthly newsletter produced by the Department of Finance highlights the financial results of the Government together with the reasons underlying major variances.

Debt Management Strategy

This report is tabled annually in Parliament. It provides information on the federal government’s debt management strategy for the coming fiscal year.

The Debt Management Report

This annual document provides an accounting of the key elements of federal debt strategy and describes various strategic and operational aspects of the Government’s debt program and cash management activities over the past fiscal year.

The Estimates

Each year, the Government prepares Estimates in support of its request to Parliament for authority to spend public monies. This request is formalized through the tabling of appropriation bills in Parliament. The Estimates are tabled in the House of Commons by the President of the Treasury Board and consists of three parts:

Part I – The Government Expenditure Plan provides an overview of federal spending and summarizes the relationship of the key elements of the Main Estimates to the Expenditure Plan set out in the budget.

Part II – The Main Estimates directly support the Appropriations Act.

Part III – Departmental Expenditure Plans, which consist of two components – Reports on Plans and Priorities and Departmental Performance Reports.

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