Canada's small budget gap increases in April-May
* April gap shrinks to C$283 mln from yr-ago C$713 mln
* May deficit grows to C$2.43 bln from C$1.11 bln
* April-May deficit C$2.71 bln from yr-ago C$1.82 bln
OTTAWA, July 26 (Reuters) - Canada's federal budget deficit widened in April-May to C$2.71 billion ($2.63 billion) from C$1.82 billion a year earlier, predominantly because of higher transfers to seniors and to the provinces, the Department of Finance said on Friday.
The Conservative government budget in March forecast that the deficit for the fiscal year 2013-14, which began in April, would shrink to C$18.7 billion from C$25.9 billion in the prior year. It promises budget balance by 2015.
The April deficit shrank to C$283 million from C$713 million in April 2012, while May's grew to C$2.43 billion from C$1.11 billion a year earlier.
A 3.6 percent rise in program spending during the two months outstripped a 1.4 percent increase in revenues. Public debt charges also rose by 2.0 percent, reflecting higher inflation adjustments on real return bonds.