OTTAWA (Reuters) - Canada posted a C$1.33 billion ($1.02 billion) budget deficit in December compared to a C$2.17 billion surplus a year earlier as revenues dropped and program expenses climbed, the federal Finance Department said on Friday.
For the fiscal year that began in April, the Liberal government racked up a C$13.99 billion deficit compared to a C$3.20 billion surplus in the same period in 2015.
Revenues dropped by 3.0 percent in December 2016 from a year ago, as a 7.1 percent fall in personal income tax receipts canceled out increases in corporate income tax and non-resident income tax revenues.
Program expenses jumped by 13.0 percent, driven by increased children’s benefits after the government began sending out checks to families last July. Benefits to the elderly also rose.
The government, which is expected to release its latest budget in the coming months, plans to run deficits over the next few years as it spends on infrastructure to bolster the economy.
Ottawa updated its fiscal position last November, forecasting a budget deficit of C$25.1 billion in the fiscal year 2016-17.