Feds register surplus of $3.2 billion over first two months of fiscal year

OTTAWA — The federal government ran a surplus of $641 million in the second month of its fiscal year, helped along by a boost in tax revenues.

For the first two months of the fiscal year, the government had a surplus of $3.2 billion compared to a $68-million surplus in the same period last fiscal year.

The government’s February budget predicted a deficit of $18.1 billion for the current 2018-19 fiscal year, but the parliamentary budget office has forecasted a deficit of $22.1 billion.

The monthly fiscal monitor report from the Department of Finance says revenues were up $4.3 billion for the first two months combined. That’s an increase of 8.6 per cent, compared with April and May 2017, driven largely by growth in personal, corporate and sales tax revenue, and helped by a 5.1 per cent increase in employment insurance revenues.

Program spending was up approximately $700 million for the fiscal year to date, or 1.6 per cent compared to the same period last year. The rise was due to increases in transfers to other levels of government, direct program spending, and transfers to persons, particularly elderly benefits that went up by about $400 million, or 5.1 per cent, reflecting Canada’s aging population and adjustments for inflation.

Public debt charges were up $500 million compared to the same period a year ago, or 12.4 per cent. The leap was due to upward adjustments for inflation in real return bonds.