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UPDATE 1-Canada posts C$17.8 bln deficit in 2016-2017

(Adds details on debt)

OTTAWA, Sept 19 (Reuters) - Canada posted a budget deficit of C$17.8 billion ($14.5 billion) for the 2016-17 fiscal year, the Finance Department said on Tuesday, below the preliminary deficit of C$21.85 billion reported in May and well above the C$1.0 billion deficit the year before.

The deficit for 2016-2017 was smaller than the C$23.0 billion gap the government projected in its annual budget.

Program expenses increased from the 2015-2016 fiscal year by C$16.2 billion, or 6 percent, to C$287.2 billion, partly due to a revamped children's benefit, while revenues decreased by C$2.0 billion, or 0.7 percent, to C$293.5 billion.

The federal debt rose to C$631.9 billion from C$616.0 billion the prior year, taking the debt-to-GDP ratio to 31.2 percent in the 2016-2017 fiscal year, which ends in March.

Prime Minister Justin Trudeau's ruling Liberals ran a successful 2015 election campaign on a pledge to run deficits in order to boost spending and stimulate the economy. ($1 = 1.2285 Canadian dollars) (Reporting by Andrea Hopkins; Editing by Jeffrey Benkoe)