Canada records C$314.0 billion budget deficit in fiscal 2020/21

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Illustration photo of a Canada Dollar note

OTTAWA (Reuters) - Canada's budget deficit in fiscal 2020/21 swelled to C$314.00 billion ($260.15 billion) from a deficit of C$21.77 billion in the previous year, as Ottawa spent heavily to fight the COVID-19 pandemic, preliminary data from the federal finance ministry showed on Friday.

Compared to the previous fiscal year revenues dropped 10.4%, while program expenses jumped 80.1%, largely due to emergency transfers to individuals, businesses and the provinces.

"The government’s 2020–21 financial results reflect the economic downturn and temporary measures implemented through the government’s Economic Response Plan to support Canadians and businesses facing hardship as a result of the COVID-19 outbreak," Finance said.

On a monthly basis, Canada posted a deficit of C$31.44 billion in March 2021, compared to a deficit of C$14.79 billion recorded in March 2020.

Monthly revenues increased by 33.8%, driven by an increase in tax and other revenues, while program expenses were up 69.0%, again on COVID-19 related spending.

The final results for the fiscal year will include additional adjustments, including more than C$7 billion in measures announced in Budget 2021, the Finance ministry said.

($1 = 1.2070 Canadian dollars)

(Reporting by Julie Gordon, 343-961-4020; Editing by David Ljunggren; julie.gordon@tr.com)