Federal deficit shrinks to $300 million in August

The federal deficit shrank to $300 million August, down from $2 billion in the same month a year earlier.

The Department of Finance said Friday that while revenues mainly from taxes decreased during the month, that was more than offset by a $1.6 billion reduction in expenses.

For accounting purposes, Ottawa's fiscal year starts in April. The government said Friday the federal deficit for the first five months of the year, between April and August, is now at $1.1 billion.

That compares with $6.6 billion in the same five-month period a year earlier.

The government has been projecting for several years now that it expects a surplus in time for the next fiscal year which will be an election year.

Friday's figures suggest the government is getting closer to seeing the surplus it has been projecting for years.

Monthly details

For August aloneincome tax revenues were up by $700 million for the month, but corporate tax revenues were down by $1.2 billion.

Excise taxes and duties were up $500 million, or 14.3 per cent, mainly because of a $400 million jump in the amount of GST revenue taken in. Earnings from EI premiums increased by $100 million because of higher earnings for workers.

Transfers to people, including elderly, EI and children's benefits increased by $100 million, or 2.4 per cent.Transfers to other levels of government rose by $200 million.

And public debt charges fell by $0.1 billion, or 4.9 per cent.