Alberta`s budget shortfall shrinks
OTTAWA -- In further proof that the Canadian economy has roared back to life, the Department of Finance said Friday it nearly hit a balanced budget in January based on the first monthly increase in tax revenue in over a year.
The $265-million shortfall in January is by far the smallest so far this 2009-10 fiscal year, ending March 31. The latest issue of the Fiscal Monitor lends to credence to arguments from some economists that the federal deficit might shrink faster than the Department of Finance indicated in its budget earlier this month.
According to Finance, Ottawa recorded a budget shortfall of $265-million, compared with a small $118-million surplus in the same year-ago month. This fiscal year, monthly deficits have tended to range in the $3-billion to $5-billion range.
With two months left to report for the 2009-10 fiscal year, the federal government has a budget deficit of $39.6-billion, whereas Finance envisaged a $53.8-billion shortfall for the entire fiscal year. Should the momentum continue, it is possible the federal deficit for this fiscal year could be quite a bit smaller than projected in the budget.
Of the year-to-date shortfall, Finance estimated that roughly $17-billion is attributable to the two-year, $48-billion stimulus plan. The budget commits to implementing the second year of the stimulus scheme, even though signs of life in the economy have emerged.
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