The federal government ran a deficit of $1.7-billion in October – down from $2.1-billion the month before – as new data suggests this year’s deficit could come in slightly lower than forecast.
Finance Canada’s monthly fiscal monitor shows this year’s deficit stood at $10.6-billion over the first seven months of the 2012-13 fiscal year, which is lower than the $13.9-billion deficit over the same period the year before.
Monthly spending and revenue numbers are not always consistent throughout the year however. Last year’s tracking data suggested a smaller deficit, but then a large amount of spending booked at year end pushed the 2012-13 deficit to $26.2-billion, which was higher than previously forecast.
In November, Finance Minister Jim Flaherty issued a fiscal update that injected some pessimism into his government forecasts. While the March budget had forecast a 2012-13 deficit of $21.2-billion, Mr. Flaherty’s November update revised that to $26-billion, which would essentially mean no year-over-year improvement.
Mr. Flaherty is under pressure to erase the deficit before the next federal election in 2015 and has said he wants to stay on as finance minister until he achieves that goal.
The new numbers from his department, released Friday morning, show total program expenses grew by two per cent over the first seven months of the year, from $150.8-billion to $152.4-billion. The biggest source of savings for Ottawa is on public debt charges thanks to lower interest rates. Spending to service debt is down six per cent.
In terms of money coming in to Ottawa through taxes and duties, total revenues were up 3.6 per cent over the first seven months, from $136.9-billion to $141.8-billion.