OTTAWA – The federal deficit shrank to $941 million in October compared with $3.21 billion in the same month a year ago, thanks mainly to higher revenue, the Finance Department reported Tuesday.
In its monthly fiscal monitor, the department said revenue increased 11.1 per cent year over year in October, boosted by higher personal income tax and Goods and Services Tax revenues.
Personal income tax revenues were up $1.6 billion or 16.5 per cent from a year ago when they were hit by a $1.6-billion downward adjustment due to the introduction of the Conservative government’s income-splitting plan for families and a doubling of the children’s fitness tax credit.
The newly elected Liberal government has announced it will end income splitting for families for next year.
Corporate income tax revenues were up 4.4 per cent, while excise taxes and duties were up 19.5 per cent.
Meanwhile, program spending for October 2015 increased by 0.4 per cent and public debt charges fell 6.4 per cent.
For the April to October period, the government posted a surplus of $634 million compared with a deficit of $3.95 billion in the same period a year earlier.
Revenue for the first seven months of the fiscal year was up 8.7 per cent, while program spending was up 6.6 per cent. Public debt charges fell 3.6 per cent.
In April, the Conservative government projected a $2.4-billion surplus for 2015-16 — including the $1 billion set aside for contingencies.
However, oil prices have since fallen and economic growth has been far slower than estimated when the spring budget was written.
The Liberal government’s fall economic update predicted a $3-billion deficit for the current fiscal year.