The federal budget deficit grew by $4.4 billion in November, the Department of Finance reported Friday.

For the first eight months of Ottawa's fiscal year, spending has surpassed revenue by $36.3 billion. The government is still on track to meet its target of a $55.9 billion deficit by the fiscal year ending in March 2011.

Federal income tax revenues, November ($ millions)
2008 2009 % Change
Personal 9,388 8,368 -10.9
Corporate 2,311 1,476 -36.1
Non-residents 722 386 -47.1
Total: 12,421 10,226 -17.7
(Source: Dept. of Finance)

Ottawa says additional government spending and reduced revenue are responsible almost in equal parts for the shortfall. Both stem from the recession.

Spending on government departments and programs grew by $2.5 billion compared with the same period in 2008. Employment insurance benefit payments were up $600 million, or 57.2 per cent, reflecting significantly higher regular benefits due to rising unemployment.

"Personal income tax revenues are expected to remain weak through the remainder of 2009 and then begin to rise year-over-year in the first quarter of 2010, reflecting projected wage growth and the expiration of the home renovation tax credit at the end of January 2010," the Finance Department said in its monthly report.

Revenues were down $2.2 billion from November 2008, reflecting declines in income tax revenues and other revenues.

Corporate income tax revenues were down $800 million, or 36.1 per cent. Personal income tax revenues were down $1 billion, or 10.9 per cent, as unemployment grew.