Canada Deficit Narrows in October as Tax Revenue Grows

Canada’s federal budget deficit narrowed in October from a year earlier as tax revenue accelerated.

The shortfall narrowed to C$1.68 billion ($1.69 billion) during the month from C$2.13 billion a year earlier, the finance department said in a monthly report from Ottawa. Total revenue rose 8 percent, reflecting receipts of corporate income taxes that came earlier this year, it said. Program expenses rose 6.1 percent to C$20 billion.

Canadian Finance Minister Jim Flaherty is aiming to balance the federal budget before the next federal election expected in 2015 by cutting costs and forgoing new spending, even as revenue growth slows. Canada projects a deficit of C$26 billion in the current fiscal year that began in April, little changed from a year earlier.

The government has cut its payroll by 10,980 positions in the six months since the last budget targeted a reduction of 19,200, Treasury Board President Tony Clement said in a Nov. 16 statement.

The deficit in the first seven months of the fiscal year narrowed to C$10.6 billion from C$13.9 billion in the previous period. Revenue rose 3.6 percent in the period, while program expenses were up 2 percent.

To contact the reporter on this story: Theophilos Argitis in Ottawa at targitis@bloomberg.net

To contact the editor responsible for this story: David Scanlan at dscanlan@bloomberg.net

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