Canada sees $3.9B budget deficit in April-May

By Ovunc Kutlu

ISTANBUL (AA) - Canada recorded a budget deficit of $3.9 billion in the April-May period of this year, marking the first two months of its 2024-25 fiscal year, the Department of Finance said on Friday.

This figure represents a significant reversal from a surplus of $1.5 billion reported in the same period last year.

On a monthly basis, Canada posted a budget deficit of $5 billion in April but achieved a surplus of $1.1 billion in May 2024.

For April and May combined, revenues increased by $6.5 billion, or 8.9%, mainly due to higher tax revenues, according to the Department of Finance.

Program expenses, excluding net actuarial losses, rose by $10 billion, or 15.9%, reflecting increases across most major spending categories.

"Public debt charges increased by $2.3 billion, or 33.8 per cent, largely reflecting higher interest on marketable bonds and treasury bills," the statement said.

"Elderly benefits increased by $0.9 billion, or 7.3 per cent, largely reflecting growth in the number of recipients and changes in consumer prices, to which benefits are fully indexed," it added.

Direct program expenses rose by $4 billion, or 14.8%, which included higher transfers to Indigenous Peoples, funding for the Local Leadership for Climate Adaptation initiative to help communities adapt to climate change, payments for the Canada Greener Homes Grant and incentives for zero-emission vehicles, and an increase in Canada Workers Benefit payments.