New numbers released Friday show the federal government ran a deficit of $2.8 billion over the first four months of 2016-17 — dropping Ottawa's fiscal position $8 billion lower than it was over the same period a year ago.

By comparison, Ottawa had a $5.2-billion surplus during the same April-to-July stretch last year, according to the Finance Department's monthly fiscal monitor.

This year in July alone, the report said the government books showed a deficit of $1.8 billion — down from a $200-million surplus a year earlier. The July data included a $1.4-billion increase in program expenses, an $800-million decline in revenues and a $200-million decrease in public-debt charges.

Between April and July, the numbers show federal revenues were $2.3 billion lower compared with last year, while program expenses were $6.5 billion higher. The government's debt-servicing costs were $800 million lower over the time period, mostly because of the impacts of weaker inflation on bonds and a lower average interest rate.

Earlier this week, the federal budget watchdog said government spending under the Liberal government over the first three months of the fiscal year reached its highest mark in at least six years.

Higher program spending

On Friday, the fiscal monitor said the bulk of the added spending between April and July was due to a $3.9-billion increase in direct program expenses compared with a year ago — a spike of 11.9 per cent.

A closer look at the increase showed that transfer payments were up $2 billion, or 21 per cent. Finance said the bigger number was a reflection of year-over-year differences in the timing of the payments and an increase in disaster assistance.

The "other revenues" category saw a decrease of $1.8 billion between April and July compared to the same stretch the year before, mostly due to the $2.1-billion, one-time gain realized last year from the sale of Ottawa's remaining shares of General Motors.

Last year's Liberal election campaign platform promised annual deficits of no more than $10 billion over the next couple of years to allow the government to invest billions in infrastructure projects as a way to inject some life in the economy.

But the Liberals later blamed a worsening economy for a revised projection in the March budget of five straight annual deficits totalling more than $110 billion, beginning with a shortfall of $29.4 billion in 2016-17.

On Thursday, Finance Minister Bill Morneau said the government's fall economic and fiscal update will show how Liberal investments have started to have an economic impact.