For more than a decade, Canada has traditionally posted surpluses. The recession has cut revenues and increased social spending and deficits have been a natural result. The deficit in April in May of this year totaled C$ 7.53 bln. The deficit last year for that period was C$ 875 mln.
Caanda’s deficit will be temporary and small in GDP-terms and should not be a major worry just yet. It does erode a traditional strength of Canada as the only G7 country with both a budget and trade surpluses. Both are now negative.
USD/CAD changes hands at 1.0825, barely half a cent above its low for the year.
