Canada's deficit shrinking faster than expected

The Canadian government reported on Friday that the national budget deficit stood at 17.3 billion Canadian dollars in the first eight months of this fiscal year, about 1 billion less than expected. Last year, the deficit was 26 billion at the same point in the fiscal year. Last fall, Finance Minister Jim Flaherty predicted a budget deficit of 32 billion in 2011-2012, but Friday's report shows the federal deficit may come in at less than 30 billion dollars. In a commentary sent out by the Toronto Dominion Bank, economist Sonya Gulati predicted the deficit will be about 27 billion to 28 billion dollars. The deficit to gross domestic product (GDP) ratio will end the year at about 1.7 percent. At the peak of the recession in 2009, the ratio was 3.6 percent. In November, spending fell by 2.5 billion dollars due to the ending of infrastructure spending geared to stimulating economic growth. As of the end of Nov. 2011, federal revenues stood at 153.8 billion dollars while expenses were 170.1 billion dollars. In recent weeks, Canadian Prime Minister Stephen Harper and his senior ministers have promised major spending cuts that are expected to be announced in about a month. A committee of key cabinet ministers, working with an outside business consultant, has been reviewing federal programs to look for ways to save money.