OTTAWA — Canada's budget deficit continued to decline in June from year-earlier levels, with revenues rising 8.7 per cent, despite signs of a slowing economy.
The shortfall for the month was $2.2 billion, down from a deficit of $2.8 billion in June 2010, the Finance Department said Friday.
The government brought in $19.4 billion, up $1.6 billion, in June, "reflecting increases in most revenues streams," the department said. Among them, personal income tax revenues rose by $600 million, or 7.5 per cent.
Meanwhile, program expenses — including transfer payments — rose by $900 million, or 5.1 per cent, to $19 billion. Public debt charges rose by $32 million, or 1.2 per cent.
For the first three months of the fiscal year, the department said the deficit narrowed to $5.5 billion from $7.2 billion in the same period a year earlier.
Between April and June, revenues rose by $2.6 billion, or 4.8 per cent, to $57.7 billion — mainly due to higher income tax revenues, which partially offset lower goods and service tax revenues, the department said.
During the three-month period, program spending was up $200 million, or 0.4 per cent, and public debt charges rose by $700 million, or 9.3 per cent.
Although data "suggest that economic growth has slowed recently," the department said "financial results through the first three months of the 2011-12 fiscal year are broadly consistent with those projected . . . budget 2011."
In its June 6 budget, the government trimmed its deficit forecast for the current year and said it would eliminate its shortfall a year ahead of schedule.
Finance Minister Jim Flaherty said the government would aimed for $4 billion in annual savings and balance the budget by 2014-15. In the pre-election March budget, Flaherty had forecast the deficit would be erased by 2015-16.
For 2010-11, preliminary estimates put the shortfall at $36.2 billion, down from the previous forecast of $40.5 billion. The government expects a 2011-12 deficit of $32.3 billion.
CNS 8/26/11 11:48:55
© The Financial Post
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