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The consolidated surplus for all Canadian governments, including the two major pension plans, fell to $2.4 billion from $31.5 billion between the fiscal years ending March 31, 2008 and March 31, 2009.

Statistics Canada reports the deterioration came as expenditures continued to increase while revenues fell during the year.

The agency says the federal government's financial position fell to a surplus of $883 million from a surplus of $12.8 billion. At the same time, the financial position of provincial, territorial and local governments went to a combined deficit of $9.7 billion from a combined surplus of $6.9 billion.

The two major pension plans recorded a surplus of $11.2 billion, down from $11.8 billion.

Consolidated government revenues declined 2.1 per cent to $633.7 billion during the fiscal year ending March, 2009, while expenditures grew 2.5 per cent to $631.3 billion.

Among revenue sources, income taxes fell 7.7 per cent, attributable almost entirely to a decrease in corporate income taxes. In addition, consumption taxes declined 4.1 per cent, mostly due to a drop in general sales tax revenues.

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