Thursday, April 21, 2011

Federal deficit is billions less than expected - Business - CBC News

Federal deficit is billions less than expected - Business - CBC News

With one month left in the government's fiscal year, the annual deficit is now $28.3 billion.

That puts Ottawa on a faster track to get out of the red, mainly due to strong economic growth at the end of last year and the start of this year.

Last month, Finance Minister Jim Flaherty shaved the deficit projection for the 2010-11 fiscal year to $40.4 billion, about $5 billion less than what he projected in October.

But with March accounting remaining, Ottawa is $12.1 billion to the better of even that improved projection.

Economists noted that the final month, and subsequent adjustments, traditionally can result in wild swings in the fiscal position, but the current gap is unusually large this late into the fiscal year.

One unknown in this year's accounting is the final bill for the government's stimulus spending program, which has accounted for more than $14 billion of the deficit.

Two things that I'm going to point out...

First of all, the fact that the stimulus bill is 14 Billion of the deficit means that there isn't likely a large adjustment coming in March.

Secondly, I think that the fact that the economy is outperforming expectations and the deficit is a lot less than projected proves that holding the line on the budget is a good strategy.

As Mr. Harper said in Saskatoon - Balance the budget without raising taxes.

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