December 18, 2009
Archived - Release of The Fiscal Monitor
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The Honourable Jim Flaherty, Minister of Finance, today released The Fiscal Monitor for October 2009.
October 2009: budgetary deficit of $3.3 billion
There was a budgetary deficit of $3.3 billion in October 2009, compared to a deficit of $0.6 billion in October 2008. The October 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 $1.8 billion from October 2008, reflecting declines in income tax revenues, excise taxes and duties and other revenues. Program expenses increased by $1.0 billion compared to October 2008, largely reflecting higher Employment Insurance (EI) benefit payments and higher operating expenses of departments and agencies. Public debt charges decreased by $0.2 billion compared to October 2008 due to lower average effective interest rates.
April to October 2009: budgetary deficit of $31.9 billion
For the first seven months of the 2009–10 fiscal year, the budgetary deficit was $31.9 billion, compared to a deficit of $0.1 billion reported in the same period of 2008–09. Roughly $12 billion of the $31.9-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 $16.1 billion, or 11.9 per cent, reflecting declines across most revenue streams, particularly personal and corporate income tax and goods and services tax revenues. The decline in revenues through October 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 $17.4 billion, or 15.0 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 $1.5 billion on a year-over-year basis, reflecting lower interest rates.
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Office of the Minister of Finance
Department of Finance
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