Ottawa (AFP) - Canadian Finance Minister Joe Oliver on Wednesday proposed enshrining balanced budgets into law, weeks before he is expected to unveil the nation's first surplus since the 2009 global slump that led to a record deficit.

The scheme aims to curb debt accumulation in normal economic times, freeing up government funds that otherwise would go to paying interest on the national debt.

But variations of the proposal over past decades have been widely panned by economists as political gimmicks. This one comes ahead of mid-October elections.

Oliver told a Toronto business audience the bill would allow deficit spending in extraordinary circumstances, such as in times of war or during a deep recession, as long as it came with a clear plan to quickly get back in the black.

Also, "the proposed legislation would ensure that we fix deficits by restraining spending first," instead of raising taxes, he added in a speech to the Economic Club of Toronto.

Critics have pointed out, however, that future governments could get around the fiscal restrictions by simply repealing the act.

Canada's parliamentary budget officer last year also warned it could lead the federal government to offload spending onto the provinces or sell-off Crown assets at a discount in order to balance the books.

Ottawa this week sold the last of its shares in auto maker General Motors, which it had received in exchange for a bailout. The one-time revenue of $2.7 billion is expected to help the government reach a surplus, but Ottawa fell far short of breaking even on the investment.