Ottawa on track to balance books one year ahead of schedule: budget watchdog

The federal budget watchdog is projecting the government will post a $3.4-billion surplus in 2014-15 — which would balance the books a year ahead of schedule.

OTTAWA — The federal budget watchdog is projecting the government will post a $3.4-billion surplus in 2014-15 — which would balance the books a year ahead of schedule.

The parliamentary budget office’s assessment contrasts with the government’s projection in its November fiscal update, which predicted a $2.9-billion shortfall in 2014-15.

The analysis comes as the government prepares to release its election year fiscal plan next Tuesday.

The budget office also says Ottawa is on track to post surpluses this year and next year, but predicts it then will start running small deficits.

It says the shortfalls will be a result of lower employment insurance premium rates starting in 2017.

The budget office points out that the predicted deficits are relatively small, and would have negligible effects on public debt and the wider economy. It also says the government could erase those shortfalls through minor tax tweaks or spending restraint.

The predictions are based on a “status quo forecast,” which shows the government’s fiscal footing before factoring in the impact of any fresh announcements that could be included in Tuesday’s budget.

The budget office says the government will run $1.3-billion surpluses in 2015-16 and in 2016-17 before posting a $2.1-billion deficit in 2017-18. The outlook also projects budgetary deficits of $2.9 billion in 2018-19 and $900 million in 2019-20.

Last month, the government’s fiscal monitor showed Ottawa posted a $1.3-billion surplus over the first 10 months of the 2014-15 fiscal year, suggesting it could balance the books earlier than expected.

Finance Minister Joe Oliver has repeatedly pledged to balance the books in his upcoming 2015-16 spending plan.

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