Canada posts 11th budget surplus; outlook murky
OTTAWA (Reuters) - Canada posted its 11th consecutive balanced budget in 2007-08, reporting on Friday a surplus of C$11.7 billion ($11.9 billion) for the fiscal year, or C$10.2 billion after deducting the cost of new measures announced earlier this year.
The after-cost estimate matches that given by Finance Minister Jim Flaherty in February, when he pledged to pay down C$10.2 billion in debt in 2007-08.
The numbers are still subject to end-of-year adjustments, which may not be known for months.
In March, the last month of the fiscal year, Ottawa posted a deficit of C$1.2 billion, compared with a deficit of C$2.43 billion a year earlier.
Flaherty aims for a much smaller surplus of C$2.3 billion in 2008-09, but as the economy slows the prospect of a small deficit looks increasingly likely.
The finance minister has vowed to balance the books no matter what. Canada's long-standing surplus, unmatched by other industrialized economies, is a source of pride in Ottawa and to jeopardize it is a political taboo.
In the year through March, government spending grew faster than revenue. Expenses were up 6.8 percent thanks to a 13.2 percent jump in transfers to provincial governments for health and social programs, and as well as special aid to one-industry towns hit hard by the economic downturn.
Revenues climbed 4.6 percent, boosted primarily by corporate income taxes.
In March, a big jump in personal income tax collection helped lift revenues by 5.2 percent. Expenditures in the month were unchanged. Continued...