November budget deficit up, GM IPO weighs

Fri Jan 28, 2011 12:31pm EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

OTTAWA (Reuters) - Canada's budget deficit in November 2010 grew to C$4.47 billion ($4.47 billion) from C$4.36 billion the same month in 2009, the Department of Finance said on Friday.

In the first eight months of the 2010-11 fiscal year, the deficit reached C$26.02 billion, down from C$36.30 billion in the same period a year earlier.

In November, revenues jumped 15.4 percent and program expenses climbed 12.9 percent. Public debt charges also increased.

In the April-November period revenues climbed 7.7 percent, and program expenses slipped 0.3 percent. Public debt charges rose 3.3 percent.

The November results reflect the federal government's sale of some of its shares in General Motors Co in the company's initial public offering that month.

The government said it saw a C$700 million increase in the budget deficit in November as a result of the GM transaction and the revaluation of its liability to the Ontario provincial government for its GM share holdings.

It earned C$600 million on the sale of 30 million shares. In addition it recorded an unrealized gain of C$2.9 billion resulting from the increased market value of its remaining shares. However, the higher book value does not affect the budgetary balance, but is recorded instead as a component of federal debt.

Ottawa also paid the Ontario provincial government C$1.2 billion for the revaluation of its participation in the GM holdings.

"The federal debt has been reduced by C$2.2 billion, as the net budgetary impact has been more than offset by other comprehensive income recorded on the revaluation of the government's remaining shares," the report said.   Continued...