The January 2012 Fiscal Monitor, released with Budget 2012, reports a surplus of $1.7 billion in January 2012, compared to a deficit of $0.3 billion in January 2011.  This improvement was largely due to the recording of a $1.6 billion receivable from the province of British Columbia for the repayment of the federal transitional assistance resulting from BC's decision to withdraw from the Harmonized Sales Tax.  Without this extraordinary adjustment, the January 2012 surplus would have been only $0.1 billion, an improvement of $0.4 billion from the same period in 2011.

For the period April 2011 to January 2012, the deficit for the federal government was $16.0 billion, down $11.7 billion from the deficit of $27.7 billion reported in the same period in 2010-11.

Of the $11.7 billion year-over-year improvement, budgetary revenues were up by $8.7 billion, primarily due to higher personal and corporate income tax revenues, while program expenses were down by $3.3 billion, due to lower "other transfer payments" and employment insurance benefits, partially offset by higher transfers to provinces and elderly benefits.  Public debt charges were up by $0.2 billion.

In Budget 2012, the Minister of Finance revised down the deficit forecast for 2011-12, from $31.0 billion forecast in the November 2011 Economic and Fiscal Update, to $24.9 billion.  About half of this $6.1 billion improvement resulted from the elimination of the "adjustment for risk to revenues" of $3.0 billion.    The remainder reflects somewhat higher revenues (difficult to assess which components as the "adjustment for risk" was spread among the major revenue components) and lower employment insurance benefits, other transfer payments and public debt charges. 

Based on the financial results to date, the final deficit outcome for 2011-12 could be at least $2 billion lower than forecast in Budget 2012.  Although the risks on the revenue side appear offsetting, "other transfer payments" still appear to be overstated.