Canada said a final tally of last year’s budget figures showed the deficit shrank by 28 percent from the year earlier and was C$7.0 billion ($6.8 billion) less than projected six months ago as the government’s operating spending dropped.
The deficit fell to C$18.9 billion in the fiscal year that ended March 31, down from C$26.3 billion in the previous year. In March, Finance Minister Jim Flaherty had forecast a C$25.9 billion deficit for the year.
The smaller shortfall reflects an unexpected decline in operating and capital spending, which represents about half of total program spending. Flaherty has zeroed in on operating spending in a bid to balance the budget by 2015.
“Our government’s continued efforts to ensure that every tax dollar is spent as efficiently as possible and that wasteful spending is eliminated are keeping Canada on track to balance the budget in 2015,” Flaherty said in a statement today.
Total direct program expenses fell to C$117.7 billion in the fiscal year that ended in March, down from C$119.1 billion a year earlier. Flaherty had forecast an increase to C$122.1 billion.
Flaherty told reporters government spending is “under control” and he’ll give a fall update “in a month or so.” The minister said even though the deficit was smaller than previously projected, he doesn’t anticipate returning to balance by 2014.