Ottawa posts deficit for 2015-16 fiscal year as income tax revenues fall

Parliament Hill in Ottawa on Friday, Jan. 22, 2016.
Parliament Hill in Ottawa on Friday, Jan. 22, 2016. Sean Kilpatrick/The Canadian Press

OTTAWA – The federal government posted a deficit in line with what was projected in its spring budget as personal and corporate income tax revenue fell in March.

According to its preliminary estimates, the Finance Department said today there was a $2 billion deficit for the government’s latest fiscal year. However, that was before any year-end adjustments as well as a $3.7 billion commitment to benefits for veterans.

The spring budget had projected a $5.4 billion deficit for the 2015-16 fiscal year.

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The final results are expected to be released in the fall, but the Finance Department said the results were “broadly in line” with what was projected in the budget.

For March, the last month of the fiscal year, the government posted a $9.4 billion deficit compared with a deficit of $3 billion in the same month last year.

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The shortfall came as government revenue fell $5 billion due to lower personal and corporate income taxes, offset in part by higher excise taxes and duties. Program spending increased $1.3 billion, while public debt charges gained $100 million.

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