UPDATE 1-Canada July budget deficit widens on hit to revenues

Fri Sep 27, 2013 12:55pm EDT
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* July deficit widens to C$1.98 bln

* April-July shortfall C$4.54 bln vs yr-earlier C$4.16 bln

* Gov't says sharp drop in corporate tax revenues a blip

By Louise Egan

OTTAWA, Sept 27 (Reuters) - Canada had bigger budget deficits in July and in the April-July period than it did in the same periods last year due to a sharp drop in corporate income tax revenues, which the government said would be reversed in August.

The federal budget deficit widened to C$1.98 billion ($1.92 billion) in July, compared with a shortfall of C$1.35 billion in July 2012, the Department of Finance said on Friday in a monthly report. The government ran a C$158 million surplus in the month of June.

Revenues from corporate income taxes plunged 73.7 percent in July, down C$1.3 billion, "reflecting timing issues which lowered July revenues but are expected to raise August revenues," the government said.

The government's books will take into account some July corporate income tax revenues in August, unlike last year, a finance ministry spokesman said.

Overall, revenues fell 2.6 percent in the month to C$19.8 billion, while program expenses clawed 0.1 percent higher to C$19.3 billion. Public debt charges increased by C$0.1 billion, or 3.8 percent in the month.   Continued...