Feds in smaller surplus through 9 months of fiscal year

The federal government ran a surplus of $459 million between April and December of 2008, the first nine months of its fiscal year.

In its latest update on its finances, the federal government said Friday that its revenues were $173.39 billion, down year over year from $174.61 billion.

Personal income tax revenues rose $4 billion, year over year, while corporate income tax revenues dropped $5 billion, or 18.4 per cent, on the weakening economy and lower tax rates.

"This decline reflects weaker profits as well as the impact of the 1.5-percentage-point reduction in the general corporate income tax rate and the elimination of the corporate surtax in 2008," the federal Finance Department said.

Government income from the GST was down $3.1 billion, or 13.1 per cent, reflecting the one-percentage-point reduction in the GST rate on Jan. 1, 2008.

Federal program expenses for April-December 2008 were $149.06 billion, up from $141.05 billion, on higher transfer payments, Crown corporation expenses, and operating expenses of government departments and agencies.

The government's public debt charges for the first nine months of its fiscal year decreased by $1.2 billion, or five per cent, to $23.86 billion due to lower interest rates.

For December alone, the federal government ran a $241-million surplus, down from $1.85 billion a year earlier.

In his most recent budget, presented last month, Finance Minister Jim Flaherty said the government is projecting a $1.1-billion deficit for the current fiscal year that ends March 31.

The budget also predicts a deficit of $33.7 billion for the 2009-10 fiscal year and $29.8 billion the following year.