The federal government's budget deficit hit $3.3 billion in October, $2.7 billion more than the same period last year when the economic slowdown was beginning, the Finance Department said Friday.

"Revenues were down $1.8 billion from October 2008, reflecting declines in income tax revenues, excise taxes, and duties and other revenues," the department said in a release. At the same time, expenses were up by roughly $1 billion due largely to higher employment insurance payments.

For the month, the cost of servicing the debt declined by $200 million due to lower interest rates compared to last year, the government said.

In the seven months of the fiscal year so far, Ottawa's deficit has hit $31.9 billion. That compares to a deficit of about $100 million reported in the same period of 2008–09.

Ottawa attributes roughly $12 billion of the $31.9-billion deficit it has accrued thus far in the fiscal year to stimulus measures such a tax cuts and support for certain hard-hit sectors.

Total government revenues are down $16.1 billion, or 11.9 per cent, this year, reflecting declines across most revenue streams, particularly personal and corporate income tax, and goods and services tax revenues, the agency said.

At the same time, program expenses are up $17.4 billion, or 15 per cent.

For comparison purposes, the U.S. budget deficit hit a record $176.4 billion in October.