Last-minute spending drives Canada's federal budget surplus down to C$1.6 billion

A flurry of last-minute spending during the spring helped drive down Canada's federal budget surplus to just C$1.6 billion (US$1.4 billion, Ђ1.1 billion), according to government figures released Wednesday.

That's roughly what Finance Minister Ralph Goodale had predicted for fiscal 2004-05, which ended March 31. That likely won't win him any praise from critics who have long complained the Liberal Party government tinkers with its books to get the desired results. And federal Finance Department officials acknowledge a flurry of spending in the spring helped soak up much of the surplus to lower the final results.

It was the eighth consecutive annual surplus for Canada, which is the only Group of Seven country to post a total government sector surplus in the most recent fiscal year.

"This surplus was particularly gratifying given the numerous challenges affecting our bottom line at the end of the year," Goodale said in a statement. "It clearly demonstrates the benefits of prudent, long-term fiscal planning."

Goodale said the surplus would be applied toward reducing Canada's federal debt, which now stands at C$499.9 billion (US$427.4 billion, Ђ349.6 billion).

Federal debt as a percentage of the economy was 38.7 percent in 2004-05, down roughly 30 percentage points from its peak of 68.4 percent in 1995-96, AP reports.