Canada Budget Deficit Widens in July as Revenue Falls

Canada’s budget deficit widened in July as the federal government’s revenue declined and borrowing costs rose.

The deficit for the month grew to C$1.98 billion ($1.93 billion) from C$1.35 billion a year earlier, the finance department said in a statement. Revenue fell 2.6 percent and public debt charges increased 3.8 percent to C$2.48 billion.

Finance Minister Jim Flaherty’s annual budget, released in March, projected a deficit for the current fiscal year that began April 1 of C$18.7 billion, down from C$25.9 billion the previous year, in large part by reducing direct program expenses.

The government anticipates direct program expenses, which don’t include transfers to provinces or individuals, to fall to C$119.2 billion this year from C$122.1 billion. Spending on that component in the first four months of the current year rose 5.5 percent to C$34.2 billion.

The budget gap for the first four months of the fiscal year widened to C$4.54 billion from C$4.16 billion. The finance department said the government is still on track to meet its 2013 budget targets.

Total program expenses including transfers are up 3.4 percent in the four-month period, while revenue has increased 2.6 percent. Spending rose 0.1 percent in July.

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