OTTAWA - The federal government is still on track to post an annual budget surplus after eking out a slim surplus in November, recovering from a deficit in October that was related largely to retroactive tax cuts in Finance Minister Jim Flaherty's fall mini-budget.
For the first eight months of Ottawa's current fiscal year, the surplus is estimated at $6.7 billion, including $100 million in November, the Finance Department said Friday.
The year-to-date surplus is slightly below the $6.9 billion that had been accumulated by November 2006.
The Conservative government had been on track to record a much larger surplus for the year ending March 2008 until last October, when it reported a $2.7-billion deficit as a result of retroactive tax cuts announced that month.
Program expenses increased by 6.5 per cent to $16.3 billion in November, up about $1 billion from the same month in 2006.
Half of the increased spending, about $500 million, was due to transfers to other levels of government. The other half was due to more subsidies ($300 million), higher spending by federal Crown corporations, government departments and agencies ($200 million) and higher debt charges ($100 million).
The government's revenues also increased in November but at a slower pace, rising to $19.2 billion, up $700 million from November 2006.
That was attributed largely to higher revenues from individual income taxes, corporate income taxes and the federal goods and services taxes, despite the lower tax rates introduced by the government in October.
Some sources of revenue fell, however. Revenue from employment insurance premiums, for instance, was down 7.5 per cent due to a lower rate that became effective Jan. 1, 2007.
