Revenues
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Revenues consist of all tax and other amounts which enter into the calculation of the annual surplus or deficit of the Government.
Accounting for revenues
The Government reports all revenues on an accrual basis.
Tax revenues are recognized in the period in which the taxable event occurs and when they are authorized by legislation or the ability to assess and collect the tax has been provided through legislative convention. They are reported net of refunds and are exclusive of amounts collected on behalf of provinces and territories.
Tax revenues are measured from amounts assessed/reassessed and from estimates of amounts not yet assessed/reassessed based on cash received that relates to the fiscal year ended March 31. Annual revenues also include adjustments between the estimated revenues of previous years and actual amounts, as well as revenues from reassessments relating to prior years. Revenues do not include estimates of unreported taxes, or the impact of future reassessments that cannot yet be reliably determined.
Tax expenditures that reduce taxes paid or payable are considered tax concessions and are netted against applicable tax revenue. Tax expenditures that provide a financial benefit through the tax system and are not related to the relief of taxes paid or payable are shown as other transfer payment expenses and are not netted against tax revenue.
Income tax revenue is recognized when the taxpayer has earned the income subject to tax.
Domestic goods and services tax revenue is recognized at the time of the sale of goods or the provision of services. These revenues are reported net of input tax credits, GST rebates, and the GST quarterly tax credits. The GST quarterly tax credit for low-income individuals and families is recorded in the period to which it relates.
Customs duties and goods and services tax revenue on imports is recognized when goods are authorized to enter Canada.
Excise tax revenue is recognized when a taxpayer sells goods taxable under the Excise Tax Act. Excise duties revenue is recognized when the taxpayer manufactures goods taxable under the Excise Act and the Excise Act, 2001.
Employment insurance premiums are recognized as revenue in the same period as the insurable earnings are earned.
Other revenues are recognized in the period to which they relate.
Tax revenues
Tax revenues include personal, corporate and non-resident income tax revenues, and other taxes and duties as summarized in Table 3.2.
| 2016–2017 | 2015–2016 | |
|---|---|---|
| Tax revenues | ||
| Income tax revenues | ||
| Personal | 143,680 | 144,897 |
| Corporate | 42,216 | 41,444 |
| Non-resident | 7,071 | 6,505 |
| Total income tax revenues | 192,967 | 192,846 |
| Other taxes and duties | ||
| Goods and services tax, Table 3.3 | 34,368 | 32,952 |
| Energy taxes | ||
| Excise tax—Gasoline | 4,496 | 4,350 |
| Excise tax—Aviation gasoline and diesel fuel | 1,138 | 1,215 |
| Total energy taxes | 5,634 | 5,565 |
| Customs import duties | 5,478 | 5,372 |
| Other excise taxes and duties | ||
| Excise duties | 4,873 | 4,844 |
| Air travellers security charge | 768 | 721 |
| Softwood lumber products export charge | – | 130 |
| Other miscellaneous excise taxes and duties | 227 | 221 |
| Total other excise taxes and duties | 5,868 | 5,916 |
| Total other taxes and duties | 51,348 | 49,805 |
| Total tax revenuesLink to footnote 1 | 244,315 | 242,651 |
Personal income tax
Personal income tax is levied on personal income under the provisions of the Income Tax Act.
Corporate income tax
Corporate income tax is levied on corporate income under the provisions of the Income Tax Act.
Non-resident income tax
Non-resident income tax is levied on income earned in Canada by non-residents under the provisions of the Income Tax Act. This tax is derived from tax withheld from dividends, interest, rents, royalties, alimony, and income from estates and trusts paid to non-residents.
Non-resident income tax revenues also include withholding taxes on income earned in Canada by non-resident life insurance companies and income from trusts.
Other taxes and duties
Other taxes and duties are collected under the Excise Act, the Excise Act, 2001, the Excise Tax Act, Customs Tariff (Act) and other acts. They include the goods and services tax, energy taxes, customs import duties, as well as other excise taxes and duties.
Goods and Services Tax
The goods and services tax (GST) became effective January 1, 1991. It is applied at a rate of five per cent on most goods and services consumed in Canada, with only a limited set of exclusions that consists of certain medical devices, prescription drugs, basic groceries, residential rents as well as most health and dental care services. A comparative analysis of the GST is presented in Table 3.3.
| 2016–2017 | 2015–2016 | |
|---|---|---|
| GST | 40,937 | 39,312 |
| Less: remission order for the GST paid and accrued by ministries on or for goods and services purchased from outside parties | 2,104 | 2,003 |
| Gross GST from outside parties | 38,833 | 37,309 |
| Less: quarterly tax credits | 4,465 | 4,357 |
| Net GST from outside parties | 34,368 | 32,952 |
Energy taxes
Energy taxes primarily include the excise tax on gasoline, aviation gas and diesel fuel.
Customs import duties
Revenues from customs import duties consist mainly of ad valorem taxes on the importation of goods levied under the Customs Tariff (Act).
Other excise taxes and duties
Excise taxes and duties are levied on alcoholic beverages and tobacco products. In addition, excise taxes are imposed on other items such as passenger vehicle air conditioners. The Air Travellers Security Charge is collected by air carriers at the time of payment for the air travel by the purchaser of an air transportation service.
The softwood lumber products export charge is assessed on exports of softwood lumber products to the United States after September 30, 2006. The charge on refunds of softwood lumber duty deposits is assessed on amounts refunded to Canadian companies related to an American duty order on the importation of softwood lumber products into the United States between May 22, 2002, and September 30, 2006.
Employment insurance premiums
Premiums from employees and employers are levied under the provisions of the Employment Insurance Act and are classified as part of revenues. Additional details on employment insurance premiums are provided in Section 4 of this volume.
Other revenues
Other revenues include revenues from enterprise Crown corporations and other government business enterprises, other program revenues and net foreign exchange revenues.
| 2016–2017 | 2015–2016 | |
|---|---|---|
| Other revenues | ||
| Enterprise Crown corporations and other government business enterprises | ||
| Share of annual profit | 4,920 | 7,316 |
| Interest and other | 735 | 600 |
| Total enterprise Crown corporations and other government business enterprises | 5,655 | 7,916 |
| Other programs | ||
| Return on investments, Table 3.5 | 1,163 | 1,132 |
| Sales of goods and services | ||
| Rights and privileges | 2,748 | 2,520 |
| Lease and use of public property | 725 | 655 |
| Services of a regulatory nature | 1,221 | 1,446 |
| Services of a non-regulatory nature | 4,179 | 3,925 |
| Sales of goods and information products | 3,874 | 3,971 |
| Other fees and charges | 449 | 787 |
| Total sales of goods and services | 13,196 | 13,304 |
| Miscellaneous | ||
| Interest and penalties | 4,116 | 4,364 |
| Other | 792 | 694 |
| Total other programs | 19,267 | 19,494 |
| Net foreign exchange | ||
| Exchange Fund Account | 1,996 | 2,186 |
| International Monetary Fund | 121 | 133 |
| Other | 16 | 3 |
| Total | 2,133 | 2,322 |
| Total other revenuesLink to footnote 1 | 27,055 | 29,732 |
Enterprise Crown corporations and other government business enterprises
Revenues include interest earned on loans to enterprise Crown corporations and other government business enterprises as well as the government's share of the accumulated profits or losses of enterprise Crown corporations and other government business enterprises.
Other programs
Other program revenues include sales of goods and services, return on investments, and miscellaneous revenues. Details are reported by individual ministry in Volume II of the Public Accounts of Canada.
Net foreign exchange
Net foreign exchange revenues include the revenues from investments held in the Exchange Fund Account and the International Monetary Fund, as well as the net gains or losses resulting from the translation of these investments to Canadian dollars at March 31. Net foreign exchange revenues also include the net gains or losses resulting from foreign debt and currency swap revaluations.
Return on investments
Return on investments consists mainly of interest from loans and advances, dividends from investments, and transfer of profits and surpluses for loans, investments and advances other than those in enterprises Crown corporations and government business enterprises. A comparative analysis of return on investments is presented in Table 3.5.
| 2016–2017 | 2015–2016 | |
|---|---|---|
| Cash and accounts receivable | ||
| Interest on bank deposits | 231 | 222 |
| Loans, investments and advances | ||
| National governments including developing countries | 11 | 11 |
| International organizations | 4 | 3 |
| Other loans, investments and advances | 795 | 758 |
| Total loans, investments and advances | 810 | 772 |
| Other accounts | –Link to footnote 4 | 10 |
| Total ministerial return on investments | 1,041 | 1,004 |
| Net gain on exchange | 104 | 124 |
| Accrual of other revenues | 27 | 22 |
| Total return on investments | 1,172 | 1,150 |
| Elimination of return on investments internal to the Government | (negative 9) | (negative 18) |
| Total external return on investments | 1,163 | 1,132 |
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