The federal government is running an $8.7 billion budget surplus five months into the fiscal year, $1.5billion ahead of where it stood one year ago.

The revised surplus estimate was contained in the Fiscal Monitor for August released Friday by finance minister Jim Flaherty. The Fiscal Monitor is a monthly document that provides highlights of the federal government’s fiscal performance, including monthly revenues, expenses, the budgetary balance and the financial source/requirement.

There was a budgetary surplus of $0.9 billion in August 2007, up $0.4 billion from the $0.5 billion surplus recorded in August 2006.

Budgetary revenues were up $1 billion, or 5.9%, reflecting strong gains in corporate income tax, goods and services tax and non-tax revenues. Program expenses increased by $0.7 billion, or 5.1%, due to higher transfer payments and departmental operating expenses. Public debt charges were $0.1 billion lower.

For the first five months of the 2007–08 fiscal year, the budgetary surplus is estimated at $8.7 billion, up $1.5 billion from the $7.2-billion surplus reported in the same period of 2006–07.

Budgetary revenues increased by $5.9 billion, or 6.3%, driven by both higher income tax revenues and non-tax revenues. Program expenses rose by $4.4 billion, or 6.2%, reflecting increases in transfer payments and operating expenses of departments and agencies, including National Defence. Public debt charges were virtually unchanged.