Strong Canadian Revenues Bring Deficit Down

by Mike Godfrey, Tax-News.com, Washington

23 December 2015

Canadian tax revenues rose by 8.7 percent in the first seven months of 2015, helping the Government to post a budgetary surplus of CAD0.6bn (USD0.43bn).

The latest Fiscal Monitor shows that revenues increased by CAD13.1bn to CAD163.3bn for the April-October 2015 period. Personal income tax revenues rose by 5.1 percent and corporate tax revenues were up 18.9 percent, largely reflecting assessments and reassessments for prior years.

Goods and services tax (GST) revenues increased by 11.4 percent.

Meanwhile, government program expenses were up 6.6 percent on the same period in 2014.

The Fiscal Monitor shows that there was a budgetary deficit of CAD0.9bn in October 2015 – an improvement on the deficit of CAD3.2bn in October 2014. Revenues for the month were up 11.1 percent year-on-year.

Personal income tax revenues were up 16.5 percent, as the 2014-15 results included a CAD1.6bn downward adjustment to reflect the year-to-date costs of the income-splitting measure introduced by the previous Conservative Party government and the doubling of the Children's Fitness Tax Credit. The new Prime Minister, Justin Trudeau, has promised to scrap income splitting.

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