Ottawa, November 27, 2009
2009-110

Archived - Release of The Fiscal Monitor

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The Honourable Jim Flaherty, Minister of Finance, today released The Fiscal Monitor for September 2009.

Highlights

September 2009: budgetary deficit of $5.0 billion

There was a budgetary deficit of $5.0 billion in September 2009, compared to a deficit of $0.6 billion in September 2008. The September 2009 deficit reflects the impact of the weaker economy on the Government's finances, as well as measures introduced under Canada's Economic Action Plan. Revenues were down $3.6 billion from September 2008, driven by declines in income tax revenues, as well as goods and services tax (GST) and other revenues. Program expenses increased by $1.1 billion compared to September 2008, largely reflecting higher Employment Insurance (EI) benefit payments and higher transfers to other levels of government. Public debt charges decreased by $0.3 billion compared to September 2008 due to lower average effective interest rates.

April to September 2009: budgetary deficit of $28.6 billion

For the first half of the 2009–10 fiscal year, the budgetary deficit was $28.6 billion, compared to a budgetary surplus of $0.5 billion reported in the same period of 2008–09. Over $11 billion of the $28.6-billion deficit was attributable to actions taken under Canada's Economic Action Plan, including tax reductions, enhanced EI benefits and support for the automotive industry. Revenues were down $14.2 billion, or 12.3 per cent, reflecting declines across most revenue streams, particularly personal and corporate income tax and GST revenues. The decline in revenues through September is generally in line with the projected quarterly pattern of economic growth, in which nominal gross domestic product, the broadest single measure of the tax base, is expected to be weak through the first six months of the fiscal year before strengthening in the October to December timeframe. The impact of the economic profile on revenue growth highlights the sensitivity of the 2009–10 revenue projections to the economic recovery.

Program expenses were up $16.3 billion, or 16.5 per cent, mainly reflecting higher EI benefit payments, higher transfers to other levels of government and support for the automotive industry. Public debt charges were down $1.4 billion on a year-over-year basis, reflecting lower interest rates.

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