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A worker sweeps the steps in front of Centre Block on Parliament Hill in Ottawa.

CHRIS WATTIE/REUTERS

The federal government ran a $2.3-billion deficit in August, which is down from a $3-billion deficit in August 2012.

As the government nears the halfway point of the fiscal year, the federal deficit from April to August stood at $6.8-billion, compared to a deficit of $7.2-billion over the same period during the previous fiscal year.

The numbers are contained in Finance Canada's Fiscal Monitor, which provides monthly tracking over federal revenues and expenses.

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The department's monthly tracking reports proved to be significantly off target last year. With less than two weeks to go in the last fiscal year, Finance Canada's March budget said the 2012-13 deficits would come in at $25.9-billion. In fact, when the final closing of the books was announced on Tuesday, the final deficit was $18.9-billion, a difference of nearly $7-billion.

The final numbers for 2012-13 – coupled with the fiscal improvements in the monthly tracking data – suggest Ottawa is on track to meet its target of returning to surplus by the 2015-16 fiscal year.

In a research note, TD Senior Economist Sonya Gulati questioned the usefulness of the Fiscal Monitor in light of this week's final deficit numbers.

"In times past, fiscal analysts, like ourselves, could hang their hat on Fiscal Monitor trends and apply those developments to the overall budgetary balance," she wrote. "Of late, it has become much more difficult to accurately perform this exercise. A case in point, the Fiscal Monitor numbers suggested that the federal government was on track to meet its $25.9-billion deficit target for fiscal 2012-13. Yet, the annual report figures released just recently showed a nearly $7-billion improvement over and above the last official estimate."

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