OTTAWA – Ottawa’s finances suffered a setback in the first two months of its fiscal year with a $2.7-billion deficit, almost $1 billion more than for the same period last year.
The shortfall was larger than the $1.8-billion deficit recorded in the April and May period a year ago after revisions to the method used in calculating revenues.
The 2012-13 fiscal year ended with an estimated $25.9 billion shortfall for the government, the first year Ottawa failed to make significant progress in reducing its deficit since the recession.
The government’s March budget projected the annual deficit would fall to $18.7 billion during the current 2013-14 fiscal period.
Analysts warn against reading too much into the early balance sheet reports of government revenues and expenditures because they tend to be lumpy and subject to revisions.
Ottawa says April and May this year saw a $557-million increase in revenue to $41.8 billion, with gains in personal and corporate tax receipts undercut by a fall-off in revenues from GST taxes and excise and duties receipts.
Meanwhile, program spending rose by $1.35 billion to $39.2 billion, mainly reflecting higher transfer payments to persons and provinces.
As well, the cost of servicing the national debt rose $106 million to $5.4 billion during the two months from last year.