Ottawa's October deficit rings in at $2.5 billion, same as a year ago

OTTAWA – The federal government ran a deficit of $2.5 billion in October, unchanged from the same month last year.

The monthly fiscal monitor said Monday that the federal government’s revenue slipped by $100 million as an increase in personal income tax and other sources was offset by lower revenue from corporate taxes and the GST.

Meanwhile, Ottawa’s program spending increased by $100 million in October, while public debt charges fell $200 million.

“The government remains on track to balance the budget in 2015,” the update from the Finance Department said.

In the current fiscal year, Finance Minister Jim Flaherty has said he expects a deficit of $17.9 billion, about $1 billion below the previous year’s shortfall.

The improvement comes from better than expected savings from cost-cutting and lower interest charges that more than make up for lower revenues from slow economic growth.

For the fiscal year so far, the deficit stood at $13.2 billion, compared with a deficit of $11.9 billion at the same time last year.

However, excluding the Alberta flood and the government’s sale of General Motors stock, the deficit for the April-to-October period this year would have been $11.1 billion.

Revenues over the six months were up $4.1 billion, while program spending was up $5.4 billion. Public debt charges were down $42 million.

Flaherty has predicted the deficit will fall to $5.5 billion in the 2014-15 fiscal year as a revived economy starts producing more tax revenues.

A surplus of $3.7 billion is forecast for 2015-16.