MNI: Canada Apr-May Budget Deficit CAD6.5B From Prior CAD3.8B

Canada's budget deficit widened to CAD6.5 billion in the first two months of the fiscal year from CAD3.8 billion in the previous period as retaliatory tariffs helped keep revenue little changed while program spending increased.

Revenue to date for the fiscal year that began April 1 was little changed at CAD79.6 billion as tariff revenue nearly tripled to CAD2.4 billion while corporate taxes fell 15% to CAD11.9 billion. Program spending rose 4% from the previous period to CAD75.8 billion in a broad-based increase, the Finance Department said Friday in a Fiscal Monitor report.

Prime Minister Mark Carney won the April 28 election with a plan to boost the deficit to CAD62.3 billion this fiscal year, about a record in cash terms outside of the pandemic, or about 2% of GDP. Parliament's budget officer told lawmakers last month the deficit could reach CAD70 billion and the CD Howe think tank earlier estimated a CAD92 billion shortfall. (See: MNI INTERVIEW: Carney Minority Govt To Last On Economy- Raitt)