Canada records C$148.58 billion deficit in first four months of fiscal year

FILE PHOTO: A Canadian dollar coin, commonly known as the "Loonie", is pictured in this illustration picture taken in Toronto, January 23, 2015. REUTERS/Mark Blinch

OTTAWA (Reuters) - Canada recorded a C$148.58 billion ($110.8 billion) budget deficit for the first four months of the 2020/21 fiscal year, reflecting the impact of the economic downturn and the cost of COVID-19 emergency aid, the finance department said Friday

By comparison, Canada posted a C$1.56 billion deficit in the same period of fiscal 2019/20.

Revenues fell by 34.1% from the same April to July period last year, on lower tax revenues and lower other revenues. Program expenses, meanwhile, jumped 106.2% on emergency aid and support transfers to individuals, and crisis funding for businesses, the finance department said.

On a monthly basis, Canada posted a deficit of C$28.23 billion in July, compared to the C$1.47 billion deficit recorded in July 2019.

Monthly revenues fell by 22.5% as tax revenues and other revenues fell, while program expenses jumped 76.9% on higher transfers to businesses, individuals and other levels of government, which were part of Ottawa’s COVID-19 response.

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

($1 = 1.3415 Canadian dollars)

Reporting by Julie Gordon in Ottawa; Editing by Andrea Ricci