02/12/2019 15:04 EST | Updated 02/12/2019 15:08 EST

Federal Deficit To Be $2.1 Billion Lower Than Projected: Budget Watchdog

Higher-than-anticipated income-tax revenues made the difference.

Bloomberg via Getty Images
Finance Minister Bill Morneau is interviewed on the closing day of the World Economic Forum in Davos, Switzerland on Jan. 25, 2019.

OTTAWA — The parliamentary budget watchdog is projecting the federal deficit this fiscal year will come in $2.1 billion lower than the Liberals have predicted.

Yves Giroux's office chalks up the change to higher-than-anticipated income-tax revenues that the government has collected this fiscal year, which closes in March.

A report out this morning from the parliamentary budget office predicts that this year's budget deficit will be $16 billion, less than the $18.1 billion the Liberals anticipate.

Had the economy been weaker or tax revenues lower, the report says, the federal deficit for the 2018-2019 fiscal year could have hit $23.2 billion when taking into account extra spending in Finance Minister Bill Morneau's fall economic update.

More than half the $7.2-billion swing in the projection is due to stronger tax revenues than Giroux predicted in the fall.

The report says corporate income-tax revenues are $3 billion higher than the watchdog forecast in October.

Earlier: Tory leader attacks Liberals over deficit spending at CPC convention