Canada's seven-month budget gap narrows

January 20 [Sun], 2013, 0:50
OTTAWA (Reuters) - Canada's federal budget deficit narrowed in the first seven months of the fiscal year to C$10.57 billion ($10.68 billion) from C$13.90 billion in the same period last year as personal and corporate income tax revenues rose and debt charges were lower.

The monthly shortfall in October was C$1.68 billion, compared with a gap of C$2.13 billion a year earlier, the Department of Finance said in a report on Friday.

The Conservative government in October pushed back by one year, to 2016-17, the date it expects to eliminate the deficit. Most economists believe that if the economy continues to grow, the books could be balanced sooner.

Ottawa has estimated a 2012-13 deficit of C$26 billion, including a C$1 billion cushion for risk.

In the April-October period, revenues increased by 3.6 percent, or C$4.9 billion, from the same period in 2011, pushed up by personal income tax and corporate income tax. Program expenses rose by 2 percent, or C$2.7 billion, on increases in elderly benefits and direct program expenses.

Public debt charges decreased 6.1 percent, or C$1.1 billion, on a lower effective interest rate.

(Reporting by Louise Egan; Editing by Peter Galloway)



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