OTTAWA — The federal government says it began the new fiscal year with a $500-million deficit as new tax cuts introduced in January and a slumping economy cut into revenues and public spending rose.
The government said Friday that revenues fell by 4.1 per cent in April and May of this year, compared with the same period last year, while spending increased seven per cent.
Revenues from the GST tax plunged 20.9 per cent from last year, the Finance Department said, and revenues from corporate taxes fell 16.6 per cent. Many companies, especially manufacturers and forestry operators, have been reporting lower profits because of the slumping economy.
The small deficit to start off the year is in sharp contrast to the $2.8-billion surplus the department reported last year for April and May.
And, let's keep the chronology in tact. People will remember those warning Flaherty after his goodie filled mini-budget last October, signs of a looming slowdown the talk of the prudent. Potential vote grab trumped sound fiscal management.
At least Flaherty is consistent, but for the people of Ontario, it is starting to feel like groundhog day.