The federal budget surplus rose by $700 million in September as the treasury continued to bring in more money than it paid out.
That compares to a $1.3-billion deficit the country ran in the same month a year earlier.
The Finance Department said revenues in September were $2.6-billion higher than last year, mainly because of strong growth in income tax and non-tax revenues. Program spending grew by a much smaller $800 million.
The September figures boost the overall surplus in the first six months of the fiscal year to $9.3 billion — an increase of $3.4 billion from the surplus the country was running during the April to September period last year.
Budgetary revenues increased by 7.7 per cent ($8.5 billion) during the period from April 1 to September 30, while program expenses were up 6.0 per cent ($5.2 billion) on higher transfer payments and program spending by various government departments and agencies. Interest charges fell by $200 million as the cost of servicing the national debt fell.
The finance department notes that the latest budgetary figures still don't take into account the current fiscal year's $4.8 billion in tax cuts announced last month in the economic statement. That will change next month.
"Specifically, measures retroactive to January 2007 (the reduction of the lowest personal income tax rate from 15.5 per cent to 15 per cent and the increase in the basic personal amount to $9,600) will be reflected beginning with the October 2007 Fiscal Monitor," a finance department statement said.
In his economic statement, Finance Minister Jim Flaherty forecast a surplus of $11.6 billion for the 2007-08 fiscal year. After a planned $10-billion paydown of the federal debt, that would leave a surplus of $1.6 billion.
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