Federal deficit for fiscal year hits $12.7 billion after eight months

The Finance Department's monthly fiscal monitor says the shortfall was due to a $14-billion surge in expenses

OTTAWA – The federal government ran a deficit of $12.7 billion over the first eight months of its 2016-17 fiscal year — compared with a $1-billion surplus during the same period a year earlier.

The Finance Department’s monthly fiscal monitor says the shortfall was due to a $14-billion surge in expenses, including a $7.1-billion increase in direct program costs to the treasury.

The double-digit deficit figure is not a surprise since the Trudeau government has pledged to run deficits over the coming years as it tries to boost the economy through infrastructure investments and larger child benefits.

The report says the April-to-November spike in expenses included multibillion-dollar increases in payments for child and seniors benefits as well as bigger transfers to other levels of government.

Over the same period, the government says its revenues were down $1.1 billion compared with the year before — a decline due to the one-time gain in 2015 from Ottawa’s $2.1-billion sale of its holdings in General Motors.

The report says Ottawa’s books showed a $3.3-billion deficit in November alone — down from a $400-million surplus in November 2015.

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