Canada November Budget Deficit Widens on Corporate TaxesTheophilos Argitis
Canada’s federal budget deficit widened in November from a year earlier, as corporate tax revenue fell.
The shortfall widened to C$1.85 billion ($1.83 billion) during the month from C$1.63 billion a year earlier, the finance department said in a monthly report from Ottawa. Revenue dropped 0.3 percent to C$19.9 billion, as income from corporate taxes fell 5.6 percent and sales tax proceeds shrank 5.9 percent.
Canada’s economy probably had its worst six-month performance since the end of the 2009 recession in the second half of last year, as exports declined and concerns about the global expansion prompted businesses to curb spending, leading economists and policy makers to scale back their expectations for 2013.
Alberta Premier Alison Redford said in a televised address yesterday her province will collect C$6 billion less revenue in 2013 as a result of the low price of Canadian heavy oil.
The deteriorating fiscal outlook is making it more difficult to bring the federal budget into balance as planned by 2015, a person with direct knowledge of the government’s budget planning told Bloomberg News last week.
Finance Minister Jim Flaherty, seeking to return the country to surplus while ensuring fiscal tightening doesn’t impede growth, scaled back revenue projections in a November budget update by C$7.1 billion for the next fiscal year and by C$36 billion over five years, citing lower commodity prices.
The deficit in the first eight months of the fiscal year narrowed to C$12.4 billion from C$15.5 billion in the previous period. Revenue rose 3.1 percent in the period, while program expenses were up 2 percent.