Ottawa runs $5 billion deficit in June

Sharp increases in spending, decreases in revenue combine to put the federal government in the red

My, how times have changed. Last June, the federal government was flush with cash, running a surplus of $1.6 billion. This past June, however, Ottawa sunk deep into the red, recording a $5 billion deficit. The recession, along with a sharp increase in public spending, are seemingly to blame for the downturn in the federal government’s fortunes. Revenues fell $2.7 billion from their 2008 levels, as Ottawa took in significantly less money in personal and corporate income taxes. Meanwhile, spending was up by $4.2 billion due to an increase in EI payments and the cost of supporting the auto industry. Overall, the government remains on track to run a $50.2 billion deficit for the current fiscal year.

The Canadian Press

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