Canada records C$120.35bn deficit in first three months of 2020-21 fiscal year

OTTAWA: Canada recorded a C$120.35 billion ($91.81 billion) budget deficit for the first three months of the 2020/21 fiscal year as the government's financial results continued to reflect the economic downturn and the cost of emergency aid in response to the COVID-19 pandemic, the finance ministry said on Friday.

By comparison, Canada posted a C$85 million deficit in the period from April to June 2019/20.

Revenues fell by 37.9% as tax revenues and other revenues fell. Program expenses jumped 116.5%, reflecting an increase in transfers to to individuals neededing emergency income support and additional crisis funding for businesses because of the coronavirus pandemic, the finance ministry said.

On a monthly basis, Canada posted a deficit of C$33.58 billion in June, compared to the C$1.33 billion surplus recorded in June 2019.

Revenues fell by 28.5% as tax revenues and other revenues fell. Program expenses jumped 114.4%, reflecting an increase in transfers to individuals, businesses and other levels of government as part of Ottawa's COVID-19 response measures, the finance ministry said.

The finance ministry noted there could be "substantial volatility in monthly results due to the timing of revenue receipts and expense recognition."