Budget watchdog says federal deficit this year to be $16.1 billion

OTTAWA — The parliamentary budget watchdog is projecting the federal deficit this fiscal year will come in $2.1 billion lower than the Liberals have predicted.

Yves Giroux's office chalks up the change to higher-than-anticipated income-tax revenues that the government has collected this fiscal year, which closes in March.

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A report out this morning from the parliamentary budget office predicts that this year's budget deficit will be $16 billion, less than the $18.1 billion the Liberals anticipate.

Had the economy been weaker or tax revenues lower, the report says, the federal deficit for the 2018-2019 fiscal year could have hit $23.2 billion when taking into account extra spending in Finance Minister Bill Morneau's fall economic update.

More than half the $7.2-billion swing in the projection is due to stronger tax revenues than Giroux predicted in the fall.

The report says corporate income-tax revenues are $3 billion higher than the watchdog forecast in October.

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