TORONTO (Dow Jones) – The government of Canada reduced its outstanding debt by about C$14 billion in the 2006-07 fiscal year after achieving a larger-than-expected surplus, Prime Minister Stephen Harper said Thursday.
Harper and Finance Minister Stephen Harper held a news conference in Toronto to release the annual financial report on the 2006-07 fiscal year, which ended on March 31.
“With the economy finishing impressively at year end, the government took in more revenue than expected, and through prudent, focused spending, the government also spent less than budgeted,” Harper said.
Spending was C$700 million less than forecast in the March budget, he said.
The total operating surplus achieved in the ’06-07 fiscal year was C$13.8 billion, or about 1% of Canada’s gross domestic product, Flaherty said.
Interest savings from the reduction in the federal debt, which stood at C$467.3 billion at the end of the fiscal year, will be spent on income tax relief according to a plan adopted earlier by the Conservative government.
“Under the tax back guarantee that our government legislated in budget 2007, every time we reduce the debt, the interest savings will go back where it belongs, in the pockets of hard-working Canadian taxpayers,” Harper said.
Interest savings from the debt reduction in the 2006-07 fiscal year will amount to about C$750 million, he said.
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