Hey, haven't we argued over this question in the Alberta thread ?
FYI: (I think) Last year Canada's National Debt was just over $500 Billion dollars. Interest paid on that debt per year is aprox $40 Billion. Each year the Gov't spends aprox $160 Billion, so about 1/4 of all spending goes to interest on our debt a lot of that to foreigners. The debt is an on-going figure (until we pay it off) The surplus (or deficit) is a yearly figure. in other words, last year the gov't took in 9 Billion more than they spent.
What is interesting is that while the Liberal gov't has been running surpluses for a few years AND paying down the debt, they are also spending considerably more than they were only 5 years ago - meaning that they are taking in A LOT more money that they were 5 years ago. (Taxes!)
For me, a reasonable timeline to retire the debt is a priority so we don't dump it on our children like they appear ready to do in the USA. The rest of the surplus should go to reducing taxes.