Feds closer to budget surplus as deficit shrinks to $300M
In this file photo, Finance Minister Joe Oliver speaks to media in Wakefield, Que., on Tuesday, Aug. 12, 2014. (Sean Kilpatrick / THE CANADIAN PRESS)
The Canadian Press
Published Friday, October 31, 2014 11:18AM EDT
Last Updated Friday, October 31, 2014 1:19PM EDT
OTTAWA -- The federal government is inching closer to a budget surplus as it cuts back significantly on direct program expenses, new Finance Department data show.
The monthly Fiscal Monitor says the deficit in August was just $300 million, down from $2 billion in August 2013.
Even though government revenue slid that month, the drop was more than offset on the other side of the ledger. Program expenses decreased by 8.4 per cent, mainly because within that category, direct spending was down 23 per cent, or $2 billion, from the previous year.
For the fiscal year to date, the department said the deficit for the April to August period shrank to $1.1 billion, compared with $6.6 billion in the same period last year.
Again, lower direct program spending is a key driving force. Expenses were down 6.3 per cent, or $2.7 billion, compared to the same period a year earlier.
Recent public accounts show the federal government is often not spending the amounts it has budgeted for, sitting on billions of dollars of so-called lapsed funding for each of the last two years.
But the Finance Department says the drop in program spending in August should be attributed to a one-time adjustment in pension and benefit estimates.
Prime Minister Stephen Harper reiterated this week that he expects a small deficit this fiscal year, followed by a small surplus next year -- even after taking into account the multi-billion-dollar package of family tax cuts and benefits announced on Thursday.
For August alone, revenues were down $7 million, as increases in personal income tax and GST were offset by a decrease in corporate income tax revenues.
Program expenses decreased by $1.6 billion, or 8.4 per cent, largely reflecting a decrease in direct program expenses.
Personal income tax revenues were up by $700 million for the month, but corporate tax revenues were down by $1.2 billion.
Excise taxes and duties were up $500 million, or 14.3 per cent, mostly due to a $400 million jump in GST revenues. Revenues from EI premiums rose by $100 million, reflecting higher earnings.
Transfers to people, including elderly, EI and children's benefits increased by $100 million, or 2.4 per cent.
Transfers to other levels of government rose by $200 million.
Direct program expenses were down $2 billion.
Public debt charges fell by $0.1 billion, or 4.9 per cent.
For the April-August period, total revenues rose by $4.4 billion or 4.2 per cent, to $108.2 billion.
Personal income taxes for the period totalled $53.2 billion, up from $50.9 billion in 2013. Corporate income tax brought in $12.3 billion, compared with $11.4 billion in 2013.