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Canada records C$170.52 billion budget deficit in first five months of 2020/21

OTTAWA, October 30 (Reuters) - Canada’s budget deficit widened to C$170.52 billion ($129.32 billion) in the first five months of the 2020/21 fiscal year as the government paid out billions in pandemic aid, the finance ministry said on Friday.

By comparison, Canada’s deficit was C$5.22 billion in the period from April to August 2019/20.

Revenues were down 29.0% reflecting a broad-based drop including lower tax revenues and other revenues, which include Crown corporation profits and returns on investments, among other things.

Program expenses, meanwhile, were up 97.1%, driven by government transfers to individuals and businesses in emergency COVID-19 aid. Public debt charges fell by 16.2%.

On a monthly basis, Canada’s deficit was C$21.94 billion in August, compared with a deficit of C$3.67 billion in August 2019.

August revenues decreased by 5.4% reflecting lower “other” revenues.

Program expenses rose 61.4%, again driven by government transfers to individuals and businesses, along with others levels of government, as part of Canada’s COVID-19 response measures.

The finance ministry noted there could be “substantial volatility in monthly results due to the timing of revenue receipts and expense recognition.”

($1 = 1.3186 Canadian dollars)

Reporting by Julie Gordon; Editing by Steve Scherer; julie.gordon@tr.com, 343-961-4020

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