Federal deficit shrinks again

Official data released Friday shows the federal government's deficit shrank to $18.3 billion in the fiscal year that ended in March, more than $3 billion less than the deficit posted in the previous fiscal year.

The Department of Finance said Friday the government ran a deficit of $6.5 billion in March. One of the major factors in the drop was that the previous year's numbers were skewed higher because of a "one-time accrual of $2.2 billion in federal assistance to Quebec" when the province moved to a harmonized sales tax in March 2012.

For the fiscal year as a whole, tax revenues increased faster than expenses. The former increased by $3.9 billion or 1.6 per cent. The latter went up by $2.7 billion or 1.1 per cent.

Charges on the public debt came in more than $2 billion lower, a drop of 6.5 per cent.

In a release, the federal government cautioned that the numbers released Friday are not final, and will be updated in the fall.

"The final results will also reflect end-of-year adjustments that will be made once further information becomes available, including the accrual of tax revenues reflecting assessments of tax returns and valuation adjustments for assets and liabilities," the Department of Finance said. 

"Overall, the results to date are in line with the deficit of $25.9 billion projected for 2012-13 in the March 21, 2013 budget."