OTTAWA - The federal government's fiscal position is improving dramatically and appears in position to easily beat its deficit projection of $45.4 billion for this year.
The Finance Department reported Friday it recorded a relatively small $1.4 billion shortfall in December, less than half the $3.1 billion shortfall it had in December 2009.
That means, with accounts in for the first nine months of the fiscal year that ends March 31, Ottawa's deficit stands at $27.4 billion.
If the last three months of the year produce similar results, the deficit for the 2010-11 period be in the order of $36 billion.
However, there are significant seasonal factors that cause sizeable variances from month-to-month.
In recent testimony to a parliamentary committee, budget watchdog Kevin Page estimated the final deficit tally would be just under $40 billion.
Scotiabank economist Mary Webb, who tracks government budgets, said the difference this year has been that the economy has performed better than Finance Minister Jim Flaherty counted on in his budget last March.
With jobs recovering faster than projected, Ottawa has taken in more tax revenues than anticipated.
Friday's report shows that revenues from personal, corporate and sales taxes were up across the board -- $12 billion more than for the first nine months of last year.
Meanwhile, program expenses were down $1 billion.
The added borrowing needed to service the deficit has taken its toll, however, and public debt charges were $1 billion more than last year.
Flaherty, who is expected to hand down his next budget on March 22, estimated in the fall that the 2011-12 deficit would shrink further to about $30 billion as stimulus spending is wound down.
The department said the government stimulus program was responsible for almost half the $27.4 billion deficit so far this year.
