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Minister of Finance Bill Morneau speaks with the media in the Foyer of the House of Commons on Jan. 31, 2019, in Ottawa.

Adrian Wyld/The Canadian Press

The parliamentary budget watchdog is projecting the federal deficit this fiscal year will come in $2.1-billion lower than the Liberals have predicted.

Yves Giroux’s office chalks up the change to higher-than-anticipated income-tax revenue that the government has collected this fiscal year, which closes in March.

A report out this morning from the Parliamentary Budget Office predicts that this year’s budget deficit will be $16-billion, less than the $18.1-billion the Liberals anticipate.

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Had the economy been weaker or tax revenue lower, the report says, the federal deficit for the 2018-19 fiscal year could have hit $23.2-billion when taking into account extra spending in Finance Minister Bill Morneau’s fall economic update.

More than half the $7.2-billion swing in the projection is owing to stronger tax revenue than Mr. Giroux predicted in the fall.

The report says corporate income-tax revenue is $3-billion higher than the watchdog forecast in October.

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