For the first two months of the 2008-09 fiscal year (April and May), there was a budgetary deficit of $0.5 billion, compared to a $2.8-billion surplus reported in the same period last year. By month, there was a deficit of $0.9 billion in April and a surplus of $0.3 billion in May. For the two months together, revenues declined by $1.6 billion, or 4.1 per cent, largely reflecting lower corporate income tax and goods and services tax (GST) revenues. The revenue estimates for the first two months of the year include the impact of tax reduction measures for persons, businesses and the GST.
Program expenses were up $2.1 billion, or 7.0 per cent, reflecting higher transfers and other program expenses. The monthly profile of growth in spending will initially be quite high but by mid-year will moderate considerably, consistent with the 3.4 per cent annual growth projected in Budget 2008. This monthly profile is due to the pattern of spending in 2007-08, which was low in early months but rose in the second half of the year once Budget 2007 fiscal balance and spending measures came into effect. Public debt charges declined by $0.4 billion.
The results for the first two months of the fiscal year are not indicative of the outcome for the year as a whole. Financial results can be volatile on a monthly basis due to variations in the timing of significant payments or receipts.
A quarterly update of the 2008-09 budgetary surplus projection will be provided in the June Fiscal Monitor, which will be published in late August.
The Fiscal Monitor is a monthly document that provides highlights of the federal government's fiscal performance, including monthly revenues, expenses, the budgetary balance and the financial source/requirement.
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For further information, media may contact:
Chisholm Pothier
Press Secretary
Office of the Minister of Finance
613-996-7861
