OTTAWA, July 25 (Reuters) – Canada recorded a sharply higher C$6.50 billion ($4.71 billion) budget deficit for the first two months of the 2025\/26 fiscal year as government expenditures grew but revenues stalled, the finance ministry said on Friday.<\/p>\n
By comparison, the deficit in the same period a year earlier had been just C$3.82 billion, it said in a statement.<\/p>\n
Program expenses rose 4% on increases across all major categories of spending. Public debt charges increased by 3.8% largely because of higher rates of government bonds.<\/p>\n
Year-to-date revenues marginally increased by C$26 million, largely reflecting lower corporate income tax and lower revenues from GST. This was partly offset by higher income from customs import duties and personal income tax revenue.<\/p>\n
Canada’s government has been earning higher import duty revenues because of counter-tariffs on the U.S. in response to President Donald Trump’s tariffs. The data showed that customs import duties for the first two months of the fiscal year jumped 180% from the same period a year ago.<\/p>\n
On a monthly basis, Canada posted a deficit of C$228 million in May, compared to a C$1.17 billion surplus in May 2024.<\/p>\n
($1 = 1.3701 Canadian dollars)<\/p>\n
(Reporting by Promit Mukherjee, editing by David Ljunggren)<\/p>\n
((Reuters Ottawa bureau; david.ljunggren@tr.com))<\/p>\n
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