In its monthly fiscal monitor, the department said Friday that the deficit shrank as revenue grew by $1.9 billion or 9.5 per cent to $21.7 billion due to higher revenue from personal and corporate income tax.
Personal income tax revenue was up $600 million at $11.1 billion, while corporate income tax revenue was up $1.6 billion at $2.05 billion due to timing issues that lowered the year-ago amount.
Meanwhile, program spending increased $1.1 billion or 5.8 per cent to $20.5 billion due to higher transfers to other levels of government and direct program expenses.
Public debt charges increased by $14 million, or 0.6 per cent.
The federal government's March budget forecast a deficit of $2.9 billion for its 2014-15 fiscal year.
For its fiscal year to date, the federal government posted a deficit of $800 million compared with a deficit of $4.5 billion in the same period a year ago.
Revenue for the first four months of the government's fiscal year were up 5.2 per cent or $4.4 billion at $88.9 billion, boosted by personal and corporate income taxes.
Personal income tax for the fiscal year so far totalled $42.27 billion, up from $40.78 billion a year ago, while corporate taxes amounted to $11.84 billion, up from $9.74 billion.
Government program spending for the fiscal year to date totalled $79.59 billion, up from $78.91 billion a year ago. Public debt charges were down slightly at $10.11 billion compared with $10.15 billion in the same period last year.