Canada budget deficit shrinks in first two months of 2014/15

OTTAWA, July 25 Fri Jul 25, 2014 11:00am EDT

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OTTAWA, July 25 (Reuters) - The Canadian government ran a budget deficit of C$1.15 billion ($1.06 billion) in the first two months of the 2014/15 fiscal year, down from C$2.71 billion a year earlier, the finance department said on Friday.

The government forecasts a C$5.5 billion deficit for the current fiscal year, started April 1, and has promised a C$3.7 billion surplus for the following year, just as Canada goes into a federal election scheduled for October 2015.

The budget deficit in April was C$1.41 billion, up from a shortfall of $283 million in April 2013. In May, there was a budget surplus of C$267 million, compared with a deficit of C$2.43 billion in 2013.

For the two months combined revenues increased by C$1.61 billion, or 3.8 percent, on higher income tax revenues, excise taxes and duties. Program expenses edged up by C$216 million, or 0.6 percent, on increases in funds transferred to individuals and other levels of government.

($1=$1.08 Canadian) (Reporting by David Ljunggren; Editing by Peter Galloway)