The Department of Finance today reported that September’s federal budgetary deficit reached $1.4 billion, compared to a $0.2-billion surplus in September 2005.

Revenues increased by $0.3 billion, or 2%, driven by strong growth in income tax revenues, partially offset by a drop in goods and services tax revenues, reflecting the cut to the GST rate on July 1. Program expenses increased by $1.8 billion, or 13.2%, reflecting increases in transfer payments and departmental operating expenses. Public debt charges were up $72 million.

For the first six months of the 2006–07 fiscal year, the budgetary surplus is estimated at $5.3 billion, up $0.4 billion from the $4.9-billion surplus posted in the same period of 2005–06.

Revenues were up $5.6 billion, or 5.3%, driven by strong growth in income tax revenues, slightly offset by declines in excise taxes and employment insurance premium revenues. Program expenses were up $5.0 billion, or 6.1%, due to both higher transfers and other program expenses. Public debt charges were up $0.2 billion.