Tax Revenues Reduce Canada's Deficit

by Mike Godfrey, Tax-News.com, Washington

30 August 2011

Canada's fiscal deficit fell year-on-year during the first three months of the 2011/12 financial year, an achievement aided by a 4.8% rise in revenues.

Canada's latest fiscal monitor, reflecting the country's finances from April-June, shows that the deficit fell to CAD5.5bn (USD5.6bn) from CAD7.2bn during the same period last year. Revenues were up by CAD2.6bn, with programme expenses and public debt charges also rising.

June's deficit sat at CAD2.2bn, down from last year's equivalent of CAD2.8bn. Revenues for the month rose by CAD1.6bn (8.7%) compared to June last year. Personal income tax receipts rose by CAD0.6bn (7.5%), with corporate income tax up CAD0.2bn (8.2%) and non-resident income tax revenue increasing by CAD0.2bn (63.4%). Excise taxes and duties also rose, by CAD22m (0.6%), while energy tax revenues were down by CAD14m. Employment Insurance (EI) premiums generated CAD0.1bn more in revenue (7.5%), which is consistent with the 2011 premium rate of 1.78%.

Compared with the same period last year, revenues were up by 4.8% in April to June, with higher income tax revenues partially offset by lower goods and services tax (GST) revenues. Income tax revenue increased by CAD2.1bn (7.7%), while corporate tax receipts were up by CAD0.6bn (9.3%), reflecting a 3.6% increase in receipts and a 7.1% fall in refunds for taxes paid. Non-resident income tax revenue rose by CAD0.2bn (22.8%), but excise taxes and duties were down by CAD0.7bn (7.5%), largely due to a drop in GST revenue by CAD0.7bn (11.3%).

Recommended