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Annual Financial Report 1998-99: 7 - Table of Contents - Previous -
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 of the government and the resources for which it 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 1999 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, 1999
|
|
1999 |
1998 |
|
|
(millions of dollars) |
Revenues |
|
|
Tax
revenues |
|
|
Income tax |
102,183 |
101,142 |
Excise taxes and duties |
34,249 |
33,752 |
Employment insurance premiums |
19,363 |
18,802 |
|
155,795 |
153,696 |
Non-tax revenues |
11,748 |
10,666 |
Total gross
revenues |
167,543 |
164,362 |
Amounts deducted
to arrive at net revenues |
11,872 |
11,200 |
Total net
revenues |
155,671 |
153,162 |
Expenditures |
|
|
Transfer payments |
|
|
Old Age Security and related payments |
22,285 |
21,758 |
Other levels of government |
25,523 |
20,504 |
Employment insurance benefits |
11,884 |
11,842 |
Other transfer payments |
27,300 |
28,909 |
|
86,992 |
83,013 |
Crown
corporation expenditures |
4,995 |
3,775 |
Other
program expenditures |
31,278 |
31,353 |
Total gross
program expenditures |
123,265 |
118,141 |
Amounts deducted
to arrive at net program expenditures |
11,872 |
11,200 |
Total net
program expenditures |
111,393 |
106,941 |
Interest on debt |
41,394 |
40,931 |
Total net
expenditures |
152,787 |
147,872 |
Surplus for
the year before change in accounting policy |
2,884 |
5,290 |
Change in accounting policy |
|
(1,812) |
Surplus for the
year |
2,884 |
3,478 |
Accumulated deficit at beginning of year |
579,708 |
583,186 |
Accumulated
deficit at end of year |
576,824 |
579,708 |
|
Table 8 Government of Canada Condensed statement of assets and liabilities as at March 31, 1999
|
|
1999 |
1998 |
|
|
(millions of dollars) |
Liabilities |
|
|
Payables, accruals and allowances |
|
|
Accounts payable and accruals |
34,300 |
32,783 |
Allowances for guarantees and employee benefits |
11,016 |
10,917 |
|
45,316 |
43,700 |
Interest-bearing
debt |
|
|
Unmatured debt |
|
|
Marketable bonds |
295,752 |
294,583 |
Treasury bills |
96,950 |
112,300 |
Canada Savings Bonds |
27,662 |
29,769 |
Bonds for Canada Pension Plan |
4,063 |
3,456 |
Total payable in Canadian currency |
424,427 |
440,108 |
Payable in foreign currencies |
36,000 |
27,183 |
|
460,427 |
467,291 |
Pension and other accounts |
|
|
Public sector pensions |
122,407 |
117,457 |
Canada Pension Plan (net of securities) |
5,427 |
4,205 |
Other |
6,724 |
5,872 |
|
134,558 |
127,534 |
Total interest-bearing debt |
594,985 |
594,825 |
Total
liabilities |
640,301 |
638,525 |
Assets |
|
|
Cash and accounts receivable |
|
|
Cash |
10,693 |
11,691 |
Accounts receivable |
4,580 |
4,122 |
|
15,273 |
15,813 |
Foreign exchange accounts |
34,668 |
28,968 |
Loans, investments and advances |
|
|
Enterprise Crown corporations and other
government business enterprises |
11,052 |
12,601 |
National governments and international
organizations |
7,555 |
6,869 |
Other |
4,341 |
3,832 |
|
22,948 |
23,302 |
Less allowance for valuation |
9,412 |
9,266 |
|
13,536 |
14,036 |
Total assets |
63,477 |
58,817 |
Accumulated
deficit |
576,824 |
579,708 |
|
Table 9 Government of Canada Condensed statement of changes in financial position for the year ended March 31, 1999
|
|
1999 |
1998 |
|
|
(millions of dollars) |
Cash provided
by operating activities |
|
|
Surplus for the year |
2,884 |
3,478 |
Add expenditures not requiring cash |
11,466 |
13,867 |
|
14,350 |
17,345 |
Net payments from pension and other accounts |
(3,531) |
(5,110) |
Net change in receivables, payables and accruals |
181 |
(470) |
|
11,000 |
11,765 |
Cash provided
by investing activities |
|
|
Net decrease in loans, investments and advances |
566 |
1,467 |
Cash provided
by foreign exchange activities |
|
|
Net increase in foreign currency borrowings |
8,817 |
4,167 |
Less net increase in foreign exchange accounts |
5,700 |
2,155 |
|
3,117 |
2,012 |
Net cash
generated before financing activities |
14,683 |
15,244 |
Cash used for
financing activities |
|
|
Net decrease in Canadian currency borrowings |
15,681 |
13,728 |
Net increase
(decrease) in cash |
(998) |
1,516 |
Cash at beginning
of year |
11,691 |
10,175 |
Cash at end
of year |
10,693 |
11,691 |
|
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 1998 are reclassified to conform to the current year's presentation, except for the one-time impact of the change made in 1998 of $1.8 billion in the accounting policy for assistance to international financial institutions.
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 goods and services tax 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, 1999 contractual commitments amounted to approximately $30.9 billion ($29.4 billion in 1998).
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 international organizations amount to $62 billion. 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 $501 billion ($485 billion in 1998). 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, 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, 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.
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.
This annual document provides an overview of the federal government's borrowing operations. It outlines the key elements of current 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.
This monthly newsletter produced by the Department of Finance highlights the financial results of the government together with the reasons underlying major variances. |
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