Tighter Canadian government spending impacted revenue in Calian Technologies Ltd.’s (TSX: CTY.TO) business and technology services division, which supplies IT staffing and other services, the company reported on Wednesday.

Revenue in the division fell 1.1 percent year over year to C$39.95 million (US$40.08 million) in the company’s fiscal first quarter ended Dec. 31, 2012.

“Our [business and technical services] division experienced a slight drop in revenues as constraints in federal government spending started to impact the division late in the calendar year,” President and CEO Ray Basler said in a press release.

However, gross margin in the business and technology services division improved to 16.8 percent in the fiscal first quarter from 16.4 percent in the year-ago quarter.

Total revenue at Calian rose 1.9 percent to C$57.9 million (US$58.1 million). Net profit fell 5.3 percent to C$3.40 million (US$3.41 million).