OTTAWA: Canada’s budget deficit widened in September from the same year-ago month on a broad-based decline in tax receipts.
Canada posted a September deficit of 2.37 billion Canadian dollars ($1.75 billion), compared with a C$1.25 billion deficit a year earlier, the Finance Department’s monthly fiscal monitor publication indicated.
In the government’s fall economic statement, released earlier this month, Canadian Finance Minister Bill Morneau said the budget deficit for this fiscal year would be slightly smaller than originally forecast. Ottawa expects a C$25.1 billion budget shortfall for the 2016-17 fiscal year, or 1.2% of gross domestic product.
Amid a slow-growth outlook, the Liberal government — which came to power just over a year ago — has ramped up infrastructure spending and offered tax breaks to households with children to help fuel growth. The Bank of Canada forecasts GDP expansion in 2016 of a tepid 1.1%, and is leaning on fiscal stimulus to help drive growth amid disappointing nonenergy exports.
To date, economists say the stimulus spending has had mixed results in terms of lifting output.Government revenue fell 1.5% to C$21.66 billion in September, on declines in receipts from corporate and excise taxes, according to the data released Friday. For the April-to-September period, revenue decreased 1.3% to C$139.45 billion. September marks the third straight month-over-month drop in revenue.
On the expense side, outlays related to government programs climbed 4.8% in September to C$24.02 billion, and 5.4% over the six-month period, reflecting a jump in benefits paid out to households with children. Offsetting the increased costs was a drop of 11.3% in public-debt charges, reflecting the low-rate environment.
