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Federal deficit widens in August

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Canada's monthly budget deficit rose in August from a year earlier as government program expenses and increased infrastructure spending outweighed a rise in revenues.

The deficit totaled $5.81 billion in August, up from $5.34 billion in August 2009, the Department of Finance said on Friday.

In the first five months of the 2010-11 fiscal year, April to August, the budget shortfall fell to $13.51 billion from $23.67 billion a year earlier.

Government revenue in August rose 12.5 percent to $17.2 billion, with most revenue streams higher.

Canada slid into deficit after a decade of surpluses mainly due to stimulus spending aimed at softening the impact of the global recession.

The finance department last week forecast its 2009-10 federal budget deficit would come in at $55.6 billion, or 3.6 percent of gross domestic product, exceeding earlier forecasts due to special payments to the provinces of Ontario and British Columbia.

The government said it would return to budget surplus in 2015-16, but it highlighted the uncertainty of the global economic outlook and in particular weak demand in the United States, Canada's top export market.

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