The federal government posted a budgetary surplus of $1.5 billion in April and May, the first two months of the 2023-24 fiscal year.
In its monthly fiscal monitor, the Finance Department says the result compared to a surplus of $5.3 billion during the same period in the previous fiscal year.
Revenues rose by $1.3 billion or 1.8% due to higher interest and employment insurance premiums, on top of greater proceeds from personal income tax and a carbon pricing hike.
Expenses rose $3.9 billion or 6.6% as the government paid out more returns under the pollution pricing framework as well as higher elderly benefits and transfers to other levels of government — all partly offset by the wind-down of COVID-19 income supports.
Higher interest rates have pushed up public debt charges by $1.3 billion or 22.85 since the year before.
Meanwhile, net actuarial losses decreased by $100 million or 4.7%.