Canada Budget Deficit Widens to C$7.29 Billion for First Four Months of Fiscal Year

By Paul Vieira

OTTAWA--Canada recorded a slightly narrower budget deficit in July from a year ago, but remains much wider on a year-to-date basis due to sharply higher debt-financing costs.

Canada's finance department, via its fiscal monitor publication, said the government ran a budget deficit in July of 4.41 billion Canadian dollars, or the equivalent of $3.28 billion, versus a C$4.86 billion shortfall in the same year-ago month. For the first four months of the current 2024-25 fiscal year, the budget deficit widened to C$7.29 billion, from a comparable C$1.24 billion level.

The Liberal government's 2024 budget plan has forecast a C$40 billion deficit, or 1.4% of gross domestic product, for the 2024-25 fiscal year. Preliminary data indicate the budget deficit widened in the 2023-24 fiscal year to C$50.93 billion.

Total government revenue rose 14.3% in July from a year ago, fueled by a 54% increase in corporate-income tax receipts. During the first four months of the fiscal year, total revenue climbed 10.2%.

On the expense side, government spending rose 10.7% in July from a year ago, and 13.5% in the first four months of fiscal 2024-25. Public-debt charges climbed 26% in July, and nearly 29% during the April-to-July period, a reflection of elevated interest rates. The Bank of Canada started to cut its policy interest rate in June, and delivered two more cuts in July and September.

Write to Paul Vieira at paul.vieira@wsj.com

(END) Dow Jones Newswires

September 27, 2024 11:17 ET (15:17 GMT)

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