June 23, 1942


Maturity Date Interest Rate Where Payable Amount % s May 1, 1941 li New York- 20,000.000 1 250.000,000 4 33.293.471 2 200.000.000 5 141,663,000 Mav 15, 1942 (1) ii 93.818,000June 1, 1942 (1). 2 59.761.00021 4,201,913May 1, 1955 (3) 31 42,761.3904 68.550,263July 1, 1963 (3)... 31 44,257.0873 (4) 4,551,948Non-Interest Bearing Certificates Nil Canada 1,477,129964,335,201(1) Amount converted into Second Victory Loan.(2) This issue was vested by the Treasury of the United Kingdom in January 1942. The amount (at par of exchange) purchased in the fiscal year 1941-42 was cancelled.(3) These issues were vested by the Treasury of the United Kingdom in August 1941. The amounts purchased, including Sinking Funds were cancelled.(4) Yield to investor if held to maturity, seven and one-half years after issue date.60. The fortnightly issue of three months Treasury Bills was continued during the past fiscal year. The last issue made during the year was sold at a discount of 0-552 per cent. The amount of these Treasury Bills outstanding at the close of the fiscal year was $270,000,000, and increase of $40,000,000 over the amount outstanding at the beginning of the year. As at March 31, 1942, the average rate of interest on the Dominion's outstanding direct funded debt (including Treasury Bills) was 2-90 per cent. This compares with an average rate of 3-06 per cent on the debt outstanding at the close of the preceding fiscal year and is probably the lowest average rate in the Dominion's history. 60a. It may be of interest to give a summary of Loan Flotations and Bond Redemptions made by the Government of Canada since the outbreak of war to March 31, 1942. The record of such financing operations is found in the two following statements: 445BI-2301 The Budget-Appendix


DOMINION OF CANADA BOND REDEMPTIONS SINCE OUTBREAK OF WAR TO MARCH 31, 1942


Maturity Date Interest Where Rate Payable Amount % Oct. 15, 1939 Oct. 15, 1939 Nov. 15, 1939 March 1, 1940 April 17, 1940 June 1, 1940 Sept. 1, 1940 Oct. 1, 1940 March 15, 1941 May 1, 1941 May 1, 1941 Oct. 16, 1941 Nov. 15, 1941 May 15, 1942 June 1, 1942 Oct. 1, 1947 May 1, 1955 Sept. 1, 1958 July 1, 1963 War Savings Certificates Non Interest Hearing Certificates 2i 3 3* * H 4a 4 1 1 5 H 2 21 31 4 31 (')3 Nil Canada Canada Canada Canada London Canada C anada.... London C anada.... New York___ C anada.... Canada C anada.... C anada.... Canada London London London London C anada.... Canada 17,168,000 6,242,500 4,654,000 115.013.637 0)137,058,841 80,000,000 75.000. 000 0)93,926,667 45.000. 000 20.000. 000 250.000. 000 200.000. 000 141 663,000 (s)9.3,818,000 (3)59,761,000 (*)4,201,913 (6)42.761,390 (')68,550,263 0)44,257.087 4.746,413 1,655,632 Total 1,505,478,343 Recapitulation- Payable in Canada 1,094,722,182 New York 20.090,000 London 390,756,161 1,505,478,343 0) Due July, 1, 1950, called for redemption on April 17, 1940. 0) Due October 1, 1960. called for redemption on October 1, 1940. (3) Amount converted into Second Victory Loan. (*) This issue was vested by the Treasury of the United Kingdom in January, 1942. The amount (at par of exchange) purchased to March 31, 1942, has been cancelled. fs) These issues were vested by the Treasury of the United Kingdom in August, 1941. The amounts purchased (at par of exchange) to March 31, 1942, have been cancelled. (3) Yield to investor if held to maturity, seven and one-half years after issue date. tMr. Ilsley.]


DOMINION OF CANADA LOAN FLOTATIONS SINCE OUTBREAK OF WAR TO MARCH 31, 1942


Title of Issue Two-Year Notes First War Loan (***) Five-Year Bonds One-Year Notes Five-Year Bonds Second War Loan (***1 Two and One-Half Year Notes New York Bank Credit One-Year Notes 1941 Victory Loan 1941 Victory Loan Total-1941 Victory Loan (***)... Three-Year Notes Second Victory Loan Second Victory Loan Second Victory Loan Total-Second Victory Loan (***) War Savings Certificates Non-Interest Bearing Certificates Total Increase in short-term Treasury Bills. Grand Total Issue Date Maturity Date Interest Rate Sold to Total IssuedPublic Chartered Banks Bank of Canada % $ % $ $Oct. 16, 1939 .. Oct. 16, 1941... 2 - 200,000,000 - 200.000.000Feb. 1, 1940 . Feb. 1, 1948-52 31 250,000,000 - - 250.000.000March 1, 1940 .. March 1, 1945... 2 - - 40.000.000 40.000.000May 1, 1940... May 1, 1941... 1 - - 250 000 000 250 000.000June 1, 1940 .. March 1, 1945... 2 - 40 960 000 24 040 000 65 000 000Oct. 1, 1940... Oct. 1, 1952... 3 324,945,700 - - 324,945.700Jan. 2, 1941... July 2, 1943... li - 250.000.000 - 250.000.000May 1, 1941... May 1, 1943... 21 - (**)10 000.000 - 10.000,000May 1, 1941.. May 1, 1942... 1 - - 250,000,000 250.000 00015, 1941... Dec. 15, 1946.. 2 } 836.820.250 / 193,286.000June 15, 1941.. June 15, 1951... 3 \ 643,534.250836.820,250 - - 836,820,250Oct. 16, 1941.. Oct. 16, 1944... a 99,700,000 100,300,000 200.000.000M arch 1, 1942... Sept. 1. 1944.. n 1 ( 57.169.000M arch 1, 1942.. M arch 1, 1948... 2i 997,503.300 - - 268.924,000M arch 1, 1942.. March 1, 1954.. 3 I 1 671,410,300997,503,300 - - 997,503,30013 133,473.762 133 473.762Various... June 15, 1945... Nil 10,765.678 - - 10.765,6782,553,508,690 600,660,000 664,340.000 3,818,508.690(*) (*) (*) 115,000,0003.933,508.690 t Yield to investor if held to maturity seven and one-half years after issue date. (*) It is not possible to allocate the increase in Treasury Bills to purchases by the public, chartered banks and Bank of Canada. (**) Includes participation by a United States bank. ' . . , (***) The chartered banks and the Bank of Canada converted maturing bpnde into bonds of these issues, in the case of the 1941 Victory Loan conversions amounted to $42,225.000 and in the Second Victory Loan to $117,486,000. The Budget-Appendix The Budget-Appendix


NATIONAL DEBT


61. At the close of the fiscal year under review the gross unmatured funded debt (including Treasury Bills) of the Dominion outstanding amounted to $5,866,071,000. Other liabilities consisting chiefly of Annuities, Superannuation and insurance funds, Post Office Savings Bank deposits, and various trust and contingent funds were outstanding on the same date in an aggregate amount of $742,949,000. The gross liabilities of the Dominion, therefore, totalled $6,609,020,000 as at March 31, 1942. On the other side of its balance sheet, however, the Dominion had active assets of $2,546,648,000 consisting of cash on hand and various active loans and investments (less reserves provided against ultimate loss on their realization). If, therefore, we deduct the amount of the net active assets from the amount of the gross liabilities, we arrive at a figure of $4,062,372,000 representing the estimated net debt of the Dominion. This net debt shows an increase over the corresponding figure for the close of the preceding fiscal year of $413,681,000, which of course is the amount of the over-all deficit for the fiscal year ending March 31 last. 62. The following is a preliminary statement or balance sheet showing the liabilities and assets of the Dominion as estimated at March 31, 1942: LIABILITIES-MARCH 31, 1942 (estimated) Bank Circulation Redemption Fund $ TPost Office Money Orders, Postal Notes, etc., outstanding Post Office Savings Bank deposits Insurance and Superannuation Funds- Government Annuities $ 172,970,000 Insurance Fund-Civil Service 15,118,000 Insurance Fund-Returned Soldiers 20,574,000 Retirement Fund 12,718,000 Superannuation Funds 65,533,000 Unemployment Insurance Fund (cash) 5,213,000 4.478.000 6.900.000 21,678,000 292,126,000 Trust Funds- Indian Funds Common School Funds Contractors' Securities Deposits Other Trust Funds 14.642.000 2.678.000 6.851.000 10.463.000 War Supplies Limited Contingent and Special Funds Canadian Wheat Board-Reserve for losses on wheat marketing guarantees Province Debt Accounts Funded Debt and Treasury Bills unmatured 5,866,071,000 34.634.000 36.714.000 257,567,000 18.447.000 11.920.000 Floating Debt- Funded Debt matured and outstanding 6,000,000 Interest due and outstanding 8,485,000 Outstanding cheques 44,000,000



5,924,556,000



The Budget-Appendix



(estimated) Cash, working capital advances and other current assets Recoverable Advances- United Kingdom and other Allied Governments, Army, Navy and Air Special Deposits Bank of Canada Capital Stock Central Mortgage Bank Capital Stock Canadian Broadcasting Corporation-Loan Canadian National (West Indies) Steamships. Ltd.-Loan Dominion and National Housing Acts-Loans Municipal Improvements Assistance Act, 1938-Loans S 791,093,000 120,559,000 3.022.000 5.920.000 250.000 503.000 . 450,000 , 16,254,000 . 5,976,000 Loans to Provinces- , , Housing Loans, O. C. of December 3, 1918 and amendments Unemployment Relief Loans Province of Saskatchewan-Power Commission Province of Alberta-subsidy overpayment Loans to National Harbours Board- Montreal * Vancouver New Westminster Harbour Commission-Loan Canadian Farm Loan Board-Advances and Capital Stock. Foreign Exchange Control Board-Loans and Advances... $ 130,000 157,275.000 54,000 469,000 60.326.000 25.091.000 157,928,000 85.417.000 275,000 36.537.000 725,000,000 Railway Accounts- Canadian National Railways- Advances-Refunding Act, 1938 Advances-Financing and Guarantee Act, 1939 Advances-Financing and Guarantee Act, 1940 Advances-Financing and Guarantee Act, 1940- Grand Trunk Railway Debenture Stock Advances-Financing and Guarantee Act, 1941 Advances-The War Appropriation (United Kingdom Financing) Act, 1942-purchase of securities 51.825.000 11.332.000 7,573,000 105.936.000 11.943.000 191.602.000 Advances-The War Appropriation Act 1941- Temporary Loan Purchase of equipment leased to- Canadian National Railways- 1936 Agreement War Appropriation Act, 1940 War Appropriation Act, 1941 Canadian Pacific Railway- 1936 Agreement War Appropriation Act, 1940 Loans to Foreign Governments- Greece Roumania Soldier and General Land Settlement Loans Seed Grain and Relief Advances [DOT] [DOT] [DOT] Munitions and Supply-Advances to Commodity and other Companies. Canadian Government Railways Working Capital Bond Holding Account Province Debt Accounts Unamortized Discount and Commission on Loans Less-Reserve for possible losses on ultimate realization of active loans and advances 17,122,000



397,333,000 4.655.000 13.888.000 1.027.000



19,570,000 3.526.000 9.288.000



12,814,000 6.525.000 24.329.000



30,854,000 33,888,000 2,413,000 34,222,000 16,772,000 41,860,000 2,296,000 . . 55,442,000



Net Debt, March 31, 1942 (estimated) Net Debt represented by- . , A. Expenditure and non-active assets (estimated) March 31, 1942. Capital Expenditures- Public Works- Canals Railways Public buildings, harbour and river improvements.... Military Property and stores Territorial Accounts



425.960.000 [DOT] 307.828.000 12,572,000 9,896,000



The Budget-Appendix



ASSETS-MAKCH 31, 1942-Concluded. (estimated) Loans, Non-aetive- Canadian National Railways Securities Trust Stock § 267 283 000 Canadian National Railway Stock 18 000 000 Canadian Pacific Railway (old) "!!""!!!!! 62.791 000Canadian National Steamships !!"!!"!!! 13 872 000National Harbours Board- ...Quebec 27,778,000Chicoutimi ,, 3,838,000Churchill 10,000Halifax 12,452,000Saint John 16,550,000Three Rivers 3,741,000Montreal (Jacques Cartier Bridge) 4^815! 000Seed Grain and Relief Advances ^ 346^000Soldier and General Land Settlement 16.526^000Saskaichewan Seed Grain Loans Guarantee Act, 1936 2,637 000The Set d Grain Loans Guarantee Act, 1937 7'136 000Miscellaneous Advances 3 537 000 B. Consolidated Fund- Balance Consolidated Fund brought forward from March 31, 1941 2,195,400,000 Excess of expenditure over revenue, less amounts charged under A ' ' above, fiscal year ended March 31, 1942-(estimated) 409,101,000



2,604,501,000 *4.062,372,000 63. The following table shows the various 31, 1942, and the annual interest charges obligations included in the unmatured funded thereon: debt of the Dominion outstanding as at March


UNMATURED FUNDED DEBT AND TREASURY BILLS AS AT MARCH 31, 1942, AND ANNUAL INTEREST THEREON

June 23, 1942