The federal deficit grew by $2.7 billion in September, matching the number in the same period as a year ago and raising the government's shortfall for the first six months of the fiscal year to $8.9 billion.

Six months into the fiscal year in 2011, the government was in the red by $11.8 billion.

For the month, revenues fell $25 million, or 0.1 per cent, as the government took in less from excise taxes and duties and despite a rise in its take from income tax.

Spending rose $0.1 billion, or 0.6 per cent, as increases in payments to Canadians, such as Employment Insurance and other levels of government were offset by a drop in direct expenditure.

Public debt charges fell by $0.2 billion, or 7.6 per cent.

For the six months, revenues rose $3.3 billion, or 2.8 per cent, reflecting higher income tax revenues, excise taxes and duties, and Employment Insurance premium revenues.

Program spending also increased, by $1.5 billion, or 1.4 per cent, reflecting increases in payments to individual Canadians and to other levels of government.

Debt service falls

Public debt charges for the first half of the fiscal year were down $1.1 billion, or 6.9 per cent, compared with the same period last year.

The latest update on the government’s deficit comes a day after Canada's budget watchdog, Parliamentary Budget Officer Kevin Page, released an analysis that suggests Finance Minister Jim Flaherty may be lowballing the estimated effects on revenue during the current period of slow economic growth.

Page expects the Harper government may spring a good news deficit surprise just in time for the next federal election.

On average, Page's analysis shows the government may be overestimating the hit to its annual revenues and impact on expenses from a weaker economy by $4.7 billion a year over five years.

That would be enough of a difference to put the government solidly in a surplus position when the finance minister of the day delivers the pre-election budget in the spring of 2015.

Instead, the official update anticipates the deficit will be balanced a year later, after the October 2015 election mandated by law.

The report does not say the government is purposely cooking the books to make itself look good when it beats expectations.

The report leaves the issue unanswered, aside from asking Finance officials for more information on how they arrived at their bottom line numbers.

With files from The Canadian Press