Feds will balance books by 2015, despite slow growth: PBO

OTTAWA – Finance Minister Jim Flaherty says he will not only balance the budget in 2015, but the surplus will be significant.

The finance minister says the government is well on its way to eliminating the deficit by the target date despite what he acknowledges is a weaker-than-expected economy.

Flaherty was responding to a Parliamentary Budget Office report that predicts balancing the budget in the critical 2015-16 fiscal year will be a close shave, with a relatively small $200-million surplus.

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But Flaherty says the PBO did not include the savings he will get from freezing costs for the public service, which were signalled in the throne speech earlier this month.

Last week, the minister announced that last year’s deficit was $7 billion smaller than projected as a result of more effective cost-cutting.

Meeting the 2015-16 target is critical to the Harper government heading into a fall election in 2015 because it would enable the Conservatives to campaign on having fulfilled their pledge to introduce income splitting for households, but only once the budget is in balance.