Audited Financial Statements – Administered Activities

Management Discussion and Analysis in Support of Audited Financial Statements

Analysis of Revenues Administered on behalf of the Federal Government of Canada

Federal income tax revenues were $7.9 billion higher in 2005/06 than in 2004/05. Personal and trust income tax revenues increased $5.2 billion, while corporate income tax revenues increased $1.8 billion. Non-resident income tax revenues increased $1 billion. The increase in personal income tax revenues, in spite of significant tax reduction measures, reflects strong real income gains combined with the progressivity of the personal income tax system. The corporate income tax revenue increase resulted from higher corporate profits in 2005, particularly in the energy sector. The rise in non-resident income tax revenue reflected strong growth in dividend payments to non-residents in late 2005.

There was an increase of $1,730 million in other taxes and duties. Domestic GST revenues increased $1,975 million, reflecting increased retail sales. The remaining taxes and duties were $245 million lower, which was attributable to decreased tobacco revenues as a large licensee began moving their domestic production to Mexico starting in October 2005.

Employment insurance premiums decreased $0.8 billion as the reduction in premiums more than offset the impact of gains in employment, wages, and salaries.

Figure 46 Revenues 2005-2006

Audited

Date modified:

2006-11-23