A Canada Dollar note is seen in this June 22, 2017 illustration photo. REUTERS/Thomas White/Illustration

OTTAWA (Reuters) - Canada’s budget deficit increased in September compared with the previous year as government spending on programs increased at a faster rate than revenues, the finance department said on Friday.

The government posted a deficit of C$3.23 billion ($2.54 billion) in September, compared with a shortfall of C$2.37 billion in September 2016.

Revenues in September increased by 2.7 percent on higher receipts from personal income taxes. Revenues from corporate income taxes and excise taxes both fell.

Program expenses rose by 6.5 percent, largely due to higher spending by government departments.

For the first six months of the fiscal year that began in April, the total deficit was C$5.93 billion, down from the C$7.81 billion shortfall from April-September 2016.

The government updated its fiscal and economic outlook last month and now sees a deficit of C$19.9 billion in the current 2017-18 fiscal year, smaller than it had previously anticipated.

($1=1.2706 Canadian dollars)