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Budget watchdog says federal deficit to hit $16.1 billion

Last Updated Feb 12, 2019 at 11:32 am MDT

FILE: Parliament Hill (iStock)

OTTAWA – The parliamentary budget watchdog is projecting the federal deficit this year will come in $2.1 billion lower than the Liberals predicted.

Yves Giroux’s office chalks up the change to higher-than-anticipated income-tax revenues that the government has collected this fiscal year, which closes in March.

A report released Tuesday from the parliamentary budget office predicts this year’s budget deficit will be $16 billion, less than the $18.1 billion the Liberals anticipate.

Had the economy been weaker or tax revenues lower, the report says, the federal deficit for the 2018-2019 fiscal year could have hit $23.2 billion when taking into account extra spending in Finance
Minister Bill Morneau’s fall economic update.

READ MORE: Fiscal update to lay out competitiveness plans

More than half the $7.2-billion swing in the projection is due to stronger tax revenues than Giroux predicted in the fall.

The report says corporate income-tax revenues are $3 billion higher than the watchdog forecast in October.

The Canadian Press