OTTAWA, July 29 (Reuters) - Canada posted a narrower budgetary surplus in the first two months of the fiscal year compared to the same time period a year ago as revenue decreased, the federal finance department said on Friday.
The C$114 million ($87.01 million) government surplus in April and May was far smaller than the C$3.95 billion surplus run over the same months in 2015.
Revenue fell 2.1 percent in April and May, as an increase in income tax revenue was offset by declines in sales tax revenue and duties.
Program expenses jumped by 8.8 percent as the government paid out more in benefits to the elderly and unemployed. The increase was also related to the government's expansion of children's benefits.
Canada's Liberal government, which came to power last November, expects to run a budget deficit of C$29.4 billion for the 2016-17 fiscal year as it spends on infrastructure and other measures in a bid to stimulate an economy that has been hurt by the lower price of oil.
$1 = 1.3102 Canadian dollars Reporting by Leah Schnurr; Editing by Jeffrey Hodgson