Ottawa posts $1B deficit in Q1, down from $5B surplus last year

OTTAWA – The federal government ran a deficit of $1.0 billion for the first quarter of its fiscal year, down from a surplus of $5.0 billion in the same period last year.

The Finance Department released its fiscal monitor today showing the state of Ottawa’s finances.

For June, the federal government ran a deficit of $1.1 billion as revenue fell and spending increased.

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The shortfall compared with a surplus of $1.1 billion in the same month last year.

Revenue fell $500 million or 2.2 per cent in June due to lower corporate income tax revenue, non-resident income tax and excise taxes and duties.

Program spending grew by $1.6 billion that month, an increase of 7.5 per cent, due to growth in major transfers to other levels of government and direct program expenses, though that was partially offset by a drop in major transfers to people.

Public debt charges increased by $100 million or 3.1 per cent, mainly due to higher consumer price index adjustments on real return bonds.