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Canada: Staff Report for the 2019 Article IV Consultation—Informational Annex

Author(s):
International Monetary Fund. Western Hemisphere Dept.
Published Date:
June 2019
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Fund Relations

(As of April 30, 2019)

Membership Status: Joined 12/27/1945; Article VIII

General Resources Account:SDR MillionPercent of Quota
Quota11,023.90100.00
Fund holdings of currency9,177.9483.25
Reserve Tranche Position1,845.9616.75
Lending to the Fund
New Arrangements to Borrow294.20
SDR Department:SDR MillionPercent of Allocation
Net cumulative allocation5,988.08100.00
Holdings6,107.66102.00

Outstanding Purchases and Loans: None.

Latest Financial Arrangements: None.

Projected Obligations to Fund:

(SDR Million; based on existing use of resources and present holdings of SDRs):

Forthcoming
20192020202120222023
Principal
Charges/Interest0.160.090.090.090.09
Total0.160.090.090.090.09

Implementation of HIPC Initiative: Not Applicable.

Implementation of Multilateral Debt Relief Initiative (MDRI): Not Applicable.

Implementation of Post-Catastrophe Debt Relief (PCDR): Not Applicable.

Exchange Rate Arrangements: The authorities maintain a “free floating” exchange rate regime. The exchange rate regime is free from exchange restrictions and multiple currency practices. The Canadian authorities do not maintain margins with respect to exchange transactions. However, the authorities may intervene to maintain orderly conditions in the exchange market. There are no taxes or subsidies on purchases or sales of foreign exchange. Canada has accepted the obligations of Article VIII, Sections 2, 3, and 4 (a), and maintains an exchange system that is free of restrictions on the making of payments and transfers for current international transactions. Canada maintains exchange restrictions for security reasons, based on UN Security Council Resolutions, that have been notified to the Fund for approval (most recently in June 10, 2014) under the procedures set forth in Executive Board Decision No. 144–(52/51).

Last Article IV Consultation: The Staff Report for the 2018 consultation with Canada was considered by the Executive Board on July 13, 2018 (IMF Country Report No. 18/221). Canada is on a 12-month consultation cycle. The Financial Sector Assessment Program (FSAP) took place in 2000, and was updated in 2008, 2014, and 2019.

2019 Article IV Consultation: Discussions took place in Toronto and Ottawa during April 29-May 7, 2019, and May 15. The team comprised Ms. Lim (head), Messrs. Alvarez, Krznar, and Matheson (all WHD). Mr. Andrle (RES) joined the mission during May 1–3, 2019. Ms. Pan and Mr. Ochoa (WHD) provided valuable assistance. Ms. Levonian (ED), Mr. Werner, and Mr. Shabsigh (MCM) attended the concluding meeting in Ottawa. Mr. Weil (OED) accompanied the mission for parts of the trip. The mission met with Finance Minister Morneau, Governor Poloz, Superintendent Rudin, Deputy Minister Rochon, Deputy Governors Beaudry, Schembri, and Patterson, other senior officials, regulators, provincial governments, representatives from the financial and business sector, academics, and think tanks. The concluding statement was issued on May 21, 2019.

Technical Assistance: Not Applicable.

Resident Representative: Not Applicable.

Statistical Issues

The quality, coverage, periodicity, and timeliness of Canada’s economic data are considered to be adequate both in the context of the Article IV consultation and for purposes of ongoing surveillance. Canada has subscribed to the Fund’s Special Data Dissemination Standard (SDDS), and its metadata are posted on the Fund’s Dissemination Standards Bulletin Board (DSBB). The data ROSC was published on October 23, 2003.

Real Sector. Statistics Canada provides timely and adequate data in monthly, quarterly, and annual frequency thereby facilitating the analyses of economic developments and policy assessments within a quantitative macroeconomic framework. In October 2012, Statistics Canada started aligning the Canadian System of National Accounts (CSNA) with the SNA2008 international standard. The changes introduced in the CSNA2012 included, among others, capitalization of research and development, move to replacement cost-based valuation of consumption of fixed capital, and valuing equity more consistently at market price. Additional changes were introduced with the 2014 release of the CSNA, which for the most part did not have a significant impact on GDP and represented the development of new accounts, improved integration between the CSNA and Government Finance Statistics, additional detail, and presentational changes that better align with international standards (see, Statistics Canada). In 2015 Statistics Canada carried out comprehensive revision to the Canadian System of Macroeconomic Accounts (CSMA). The four main sources of revision with that release of the CSMA were: the integration of Government Finance Statistics, the improved treatment of defined benefit pension plans, the measurement of financial services purchased by households’, and updated measures of national wealth.

Fiscal Sector. Statistics Canada provides quarterly data (a Statement of Government Operations along with a Balance Sheet) on the general government and its subsectors following the Government Finance Statistics Manual 2001 (GFSM 2001) recommendations. In November 2014, Statistics Canada published the provisional (unconsolidated) data on Canadian Government Finance Statistics (CGFS) for 2008–2012. This covers the statement of operations for all components of general government, as well as federal and provincial and territorial government business enterprises. Data on the functional expenses were also released. Subsequently, in February 2015, estimates for financial flows and the balance sheet of the general government and government business enterprises for 2007–2012 were published. Statistics Canada published Consolidated Government Finance Statistics data for 2008–2014 for the first time in March 2016 and for 2015 in March 2017. In addition, the Department of Finance Canada provides monthly and annual data on the federal government’s budget (according to the national presentation) and tax policies. The provided data enable adequate assessment of the impact of fiscal policy measures on Canada’s economic performance.

Financial Sector. The Bank of Canada and OSFI provide monthly and quarterly data on the broad range of financial variables. However, the 2013 FSSA Update recommended that financial sector data collection and dissemination should be expanded with a view to enhancing coverage, regularity, and availability of time-series to facilitate analysis.

Monetary Sector. The Bank of Canada provides timely and adequate coverage of daily, weekly, monthly, and quarterly data related to the monetary sector.

External Sector. Statistics Canada provides timely information on a quarterly frequency on the balance of payments, external debt, and the international investment position. Department of Finance Canada provides monthly data on Official International Reserves in a format comparable to the IMF’s reserve data template, thus enabling adequate surveillance.

Canada: Table of Common Indicators Required For Surveillance
Date of latest observationDate receivedFrequenc y of Data6Frequency of Reporting6Frequency of Publication6Memo Items:
Data Quality – Methodologic al soundness7Data Quality – Accuracy and reliability8
Exchange RatesSame daySame dayDDD
International Reserve Assets and Reserve Liabilities of the Monetary Authorities1May 15, 2019May 20, 2019WWW
Reserve/Base MoneyMarch, 2019May 20, 2019MMMLO, O, LO, LOO, O, O, O, O
Broad MoneyMarch, 2019May 20, 2019MMM
Central Bank Balance SheetMarch, 2019May 20, 2019MMM
Consolidated Balance Sheet of the Banking SystemMarch, 2019May 20, 2019MMM
Interest Rates2Same daySame dayDDD
Consumer Price IndexMarch, 2019May 13, 2019MMMO, O, O, OO, O, O, O, NA
Revenue, Expenditure, Balance and Composition of Financing3 – General Government42018 Q4May 20, 2019QQQO, O, O, OO, O, O, O, O
Revenue, Expenditure, Balance and Composition of Financing3– Central Government2018 Q4May 20, 2019QQQ
External Current Account Balance2018 Q4May 13, 2019QQQO, O, LO, OO, O, O, O, O
Exports and Imports of Goods and Services2018 Q4May 13, 2019QQQ
GDP/GNP2018 Q4May 13, 2019QQQO, O, O, LOO, O, O, O, O
Gross External Debt2018 Q4May 13, 2019QQQ
International Investment Position52018 Q4May 13, 2019QQQ

Any reserve assets that are pledged or otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.

Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.

Includes external gross financial asset and liability positions vis-à-vis nonresidents.

Daily (D); weekly (W); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA).

Reflects the assessment provided in the data ROSC published on October 23, 2003 and based on the findings of the mission that took place during January 22–February 5, 2003 for the dataset corresponding to the variable in each row. The assessment indicates whether international standards concerning (respectively) concepts and definitions, scope, classification/sectorization, and basis for recording are fully observed (O), largely observed (LO), largely not observed (LNO), not observed (NO); and not available (NA).

Same as footnote 8, except referring to international standards concerning (respectively) source data, assessment of source data, statistical techniques, assessment and validation of intermediate data and statistical outputs, and revision studies.

Any reserve assets that are pledged or otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.

Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.

Includes external gross financial asset and liability positions vis-à-vis nonresidents.

Daily (D); weekly (W); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA).

Reflects the assessment provided in the data ROSC published on October 23, 2003 and based on the findings of the mission that took place during January 22–February 5, 2003 for the dataset corresponding to the variable in each row. The assessment indicates whether international standards concerning (respectively) concepts and definitions, scope, classification/sectorization, and basis for recording are fully observed (O), largely observed (LO), largely not observed (LNO), not observed (NO); and not available (NA).

Same as footnote 8, except referring to international standards concerning (respectively) source data, assessment of source data, statistical techniques, assessment and validation of intermediate data and statistical outputs, and revision studies.

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