Canada’s federal government posted a budget surplus in the first seven months of its fiscal year, moving out of a prior deficit as tax revenue increased.
The surplus was C$634 million ($455 million) from April to October, the Finance Department said Tuesday from Ottawa, compared with a deficit of C$3.95 billion in the same period in 2014. Revenue rose by 8.7 percent, outstripping the 6.6 percent increase in program spending.
Although the fiscal picture is improving, it’s unlikely to stay that way. Finance Minister Bill Morneau projected a C$3 billion deficit for the 2015-16 fiscal year last month, and his Liberal Party led by Justin Trudeau won an October election by pledging deficit spending to boost an economy hurt by low commodity prices.
Corporate taxes increased 18.9 percent, or C$3.4 billion, reflecting “assessments and reassessments for prior tax years,” the Finance Department said in its statement. Personal income taxes rose 5.1 percent, or C$3.8 billion.
Program expenses climbed C$9.1 billion, boosted by a C$2.9 billion increase in payouts under a family tax benefit enacted by the Conservatives before the election.