OTTAWA – The federal government posted a deficit of $2 billion in July, compared with a deficit of $1.4 billion in the same month last year, mostly as a result of lower income tax revenue and higher spending to service the public debt.
A drop in personal and corporate income tax offset increased revenue from other sources, while spending increased slightly, according to the Finance Department’s monthly Fiscal Monitor report issued Friday.
Overall revenue dropped by $500 million to $19.8 billion. Personal income tax revenue fell $200 million to roughly $10.5 billion. Corporate income tax revenue was off by $1.3 billion or 73.7 per cent, to $454 million, due to timing issues.
The lower income tax revenue was partially offset by an increase in excise taxes and duties, employment insurance premiums and other revenue.
Total program spending by the federal government increased by $24 million, to $19.3 billion, while public debt charges increased by roughly $100 million or 3.8 per cent.
For the April to July period, the first four months of its current financial year, Ottawa posted a deficit of $4.5 billion compared. That compares with a deficit of $4.2 billion in the same four-month period a year ago.
“The fiscal outlook for 2013–14 remains on track with the projection set out in Budget 2013,” the report said Friday.
The government estimated in the March budget the year’s deficit would fall to $18.7 billion from the $25.9-billion shortfall recorded last year.