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Canada's federal budget surplus narrowed in June from a year ago as program spending climbed 10% and interest charges grew by half.
The surplus was CAD2.1 billion in June compared with CAD4.9 billion a year ago, the finance department said Friday from Ottawa. Program spending rose CAD2.9 billion led by increased seniors' payouts while revenue gained CAD1.4 billion or 3.9%. Public debt charges jumped 55% or by CAD1.3 billion, reflecting the central bank's cycle of nine interest-rate increases into June.
The first three months of Canada's fiscal year that began in April showed a similar trend with the deficit narrowing to CAD3.6 billion from CAD10.2 billion.
Finance Minister Chrystia Freeland's March budget estimated a CAD43 billion deficit in fiscal 2022-23 and CAD40.1 billion in the fiscal year that began April 1. Investors criticized the failure to seek a balanced budget amid a strong rebound and a central bank struggling to cool inflation. (See: MNI INTERVIEW:Busted Canada Debt Goal Means Pain Later-Ex Aide) The government still has CAD44 billion of cash stockpiled during the pandemic slump. That's down from CAD96 billion a year ago.
Source: Finance Department
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.