Bloomberg News

Canada September Deficit Narrows on Rising Income Tax Revenue

November 27, 2011

Nov. 25 (Bloomberg) -- Canada’s federal budget deficit narrowed by 36 percent in September as income tax revenue rose, the finance department said.

The shortfall narrowed to C$2.5 billion ($2.39 billion) during the month from C$3.92 billion a year earlier, the department said in its monthly budget report. The deficit in the first six months of the fiscal year that began April 1 shrank to C$13.2 billion from C$17.4 billion.

Finance Minister Jim Flaherty cut his projections for government revenue this month to reflect weakening global growth prospects, and said slower-than-anticipated growth will delay plans to balance the country’s budget by one year.

Cumulative deficits between 2011 and 2016 are now projected to be C$29 billion more than initially budgeted, Flaherty said in a Nov. 8 update of his fiscal plan.

In September, corporate tax revenue jumped 20 percent to C$1.63 billion and increased 8.4 percent in the first six months of the fiscal year to C$12.1 billion. Personal income tax revenue was up 16.2 percent in September, and 7.7 percent in the six-month period.

Employment insurance premiums were down 13 percent in September to C$1.08 billion, while payments of employment insurance benefits fell 13 percent during the month.

--Editors: Paul Badertscher, Carlos Torres

To contact the reporters on this story: Theophilos Argitis in Ottawa at targitis@bloomberg.net

To contact the editor responsible for this story: Chris Wellisz at cwellisz@bloomberg.net


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