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Canada's budget deficit narrows
 
July 29, 2011

OTTAWA � Canada�s budget deficit shrank in April and May from the same 
period a year earlier as revenues increased by 2.9%, the Finance 
Department said Friday.

The federal government shortfall for the first two months of fiscal 2011
-12 was $3.3-billion, down from a deficit of $4.43-billion for April and 
May last year.

For April of this year, the deficit totalled $442-million, down from 
$2.44-billion a year earlier, while the government had a $2.86-billion 
shortfall in May, compared with $1.99-billion in May 2010.

Revenues during those two month rose by $1.1-billion to $38.3-billion, 
reflecting gains from personal taxes (up $1.4-billion, or 7.8%) and 
corporate taxes (up $400-million, or 10%), as well as employment 
insurance premiums (up $300-million, or 8.5%.

Those increases were partly offset by lower revenues from the goods and 
services tax.

Meanwhile, program expenses declined by $700-million, or 2%, mainly the 
result of lower transfer payments.

In its June 6 budget, the government trimmed its deficit forecast for the 
current year and said it would eliminate its deficit ahead of schedule.

Finance Minister Jim Flaherty said that following a spending review the 
government �will achieve $4-billion in annual savings and allow the 
government to return to budget balance by 2014-15, one year earlier than 
previously planned.�

In the pre-election March budget, Mr. Flaherty had forecast the deficit 
would be erased by 2015-16.

For 2010-11, preliminary estimates put the shortfall at $36.2-billion, 
down from the previous forecast of $40.5-billion. The government expects 
a 2011-12 deficit of $32.3-billion.