Canada’s Deficit Widens in December on Higher SpendingTheophilos Argitis
Canada’s federal budget deficit widened in December from a year earlier, as the government increased spending on programs.
The shortfall widened to C$572 million ($559 million), from C$538 million the same month a year earlier, the finance department said in a monthly report from Ottawa. The deficit in the first nine months of the fiscal year that began April 1 narrowed to C$13 billion from C$16.1 billion.
Finance Minister Jim Flaherty, who projects a shortfall of C$26 billion for the fiscal year that ends March 31, is seeking to balance the country’s books by 2015 through spending cuts as faltering growth curbs revenue.
Canada’s economy probably had its worst six-month performance since the end of the 2009 recession in the last half of 2012 as exports softened.
Flaherty scaled back revenue projections in a November budget update by an average of about C$7.2 billion over the next five years, citing lower commodity prices.
Revenue in December rose 2.8 percent on greater receipts from personal income taxes, while program spending was up 3.8 percent.
Nine-month revenue was up 3 percent, down from a pace of 4.2 percent growth in the first nine months of the last fiscal year. Program spending rose 2.2 percent from April to December compared with a year earlier, after contracting over the same period in the previous two fiscal years.