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Canada’s budget surplus hits in February C$3.21 billion

Canada’s budget surplus decreased in February versus February 2015 as tax deductions decreased, while unemployment benefits and benefits for children increased.


Budget surplus hit C$ 3.21 billion in February versus C$ 4.63 billion in February 2015, according to data released by Finance Ministry.


Level of budget spending rose by 7.7% at weak tax incomes in government. Growth of unemployment benefits was on the background of dismissals due to long downside trend of commodity prices.  Moreover, previous conservative government has increased benefits for children before the elections to get higher rating.


Increase of these benefits was smoothed by reduction of government debt servicing by 6.8% due to low interest rates.


A report about budget of fiscal 2015 is to be released in three weeks. Current budget surplus is at C$ 7.47 billion, up from C$ 5.94 billion in February 2015. This means that the country has objective opportunity to exceed forecast, according to which budget deficit in 2015-2016 fiscal year was expected at C$ 5.4 billion.


The government also assumes that there is a possibility to observe significant budget deficit due to negative correction at the end of fiscal year. This technical factor is connected with cover of debt obligations by large companies and factories and with fiscal secure of new measures announced in March.


New government also expects budget deficit to be near 30 billion in this and the next years. New liberal government is intending to accumulate infrastructural spending as a measure of economic growth stimulation. Taking into consideration another analysis of experts, budget deficit may be as not significant as expected, as government forecast does not match objectively possible budget incomes.