Source: The Canadian Press

The Finance Department says the federal government spent $2.8 billion more than it took in during the month of June, an improvement from the $5-billion deficit it racked up in the same month last year.

The government took in less money through personal and corporate income taxes but saw an increase in revenue from the Goods and Services Tax.

Government spending was $2.7 billion lower, a drop of about 12.9 per cent, on lower transfer payments to the provinces.

Finance says that the economic picture appears to improving overall, but warns there’s still “considerable uncertainty” about the strength of the global economic recovery.

Between the months of April and June, Ottawa cut the deficit to $7.2 billion from $12.5 billion in the same period a year earlier.

The Finance Department says that puts it on track to hit a predicted full-year deficit of $49.2 billion for 2010-11.

The government piled up huge deficits to pay for stimulus spending to fight the recession and help the battered auto industry. But Ottawa plans to balance its books over the next few years, in part by keeping spending growth under control.