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Canadian Prime Minister Stephen Harper pauses at the start of a cabinet swearing-in ceremony at Rideau Hall in Ottawa July 15, 2013.

CHRIS WATTIE/REUTERS

Erasing the federal deficit is the top priority for the Conservative government, but monthly tracking shows Ottawa's bottom line is moving in the wrong direction.

The federal government posted a $2.7-billion deficit over the first two months of the fiscal year, which begins April 1. That compares to a $1.8-billion deficit during the same two months – April and May – the year before.

Sonya Gulati, a senior economist with TD Economics, said it is too early in the fiscal year to know if the government's deficit targets are still on track.

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"We do not have a sufficient amount of economic indicators for the second quarter to gauge whether 2013 government planning assumptions remain on-point," she wrote in a research note.

Monthly tracking figures released by Finance Canada can be quite volatile, but the reports are analyzed for signs of a trend in terms of government revenue and spending.

Prime Minister Stephen Harper has made it clear that he wants federal finances to be back in the black before his Conservatives return to the campaign trail in 2015. But the deficit hasn't budged much over the last two years.

The official deficit number for 2011-12 came in at $26.2-billion. The official deficit number for 2012-13 won't be known until the Public Accounts are released in the fall, however the March budget estimated the figure at $25.9-billion.

The budget projected the size of the deficit would shrink to $18.7-billion in the current 2013-14 fiscal year, before dropping sharply to $6.6-billion in 2014-15. The government is forecasting a surplus of $800-million in 2015-16, an election year. However the official deficit number for that year won't be known until after the 2015 election, because the Public Accounts are not published until several months after the end of the fiscal year.

The latest Fiscal Monitor report from Finance Canada notes that it has changed its monthly reports so that the accounting more accurately reflects the reporting used in the annual Public Accounts. Finance has restated last year's monthly deficit numbers as well, so the accounting change does not affect the month-to-month comparisons.

In the past, the accounting differences were sorted out at the end of the fiscal year. That sometimes led to questions both inside and outside of government as to why the official year end numbers in the Public Accounts were different than the year-end reporting by Finance Canada.

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