UPDATED - PBOWatch: Sharpen your pencils, full accrual armchair accountants!

As promised, despite the prorogation order that has rendered full ranking parliamentary officers mute (and, arguably, moot) pending the March Speech from the Throne, Kevin Page's office has nevertheless managed to release two technical notes for the general and specific edification of parliamentarians and the public: one on the art and science of fiscal projection, which explains the methodology behind his November report, and another on impact of tax changes on government revenue. Both reports are exceedingly math-heavy, but here's the gist, courtesy of Canadian Press: 

The most concerning aspect of the report is that Page calculates the government's structural deficit will grow rather than shrink even during the years the economy is growing.

"We've been thrown off track," Page said in a briefing to reporters.

Page said the problems currently facing the government are temporary in that the recession is ending and fiscal stimulus will be wound down after March 2011.

But the bigger problem going forward is a structural one, where government revenues will continue to shrink relative to the past, in part because of the aging population.

Page says the structural deficit will be in the range of one per cent of gross domestic product. That is about the same as the structural surplus that existed in the early part of the decade before the Conservative government came to power and cut the GST, depriving Ottawa of about $13 billion in annual tax revenues.

[...]The PBO is forecasting structural deficits ranging between $12.5 billion and $18.9 billion for each of the next five fiscal years. Should the PBO's forecast play out, Canada's structural deficit would represent roughly one per cent of potential GDP by then -- still low by many global standards.

But by 2014, Finance Department forecasts expect the Canadian economy to once again be approaching a balanced budget.

The Conservative government has aggressively cut personal, consumer and corporate tax rates over the last three years. A one per cent reduction in the goods and services tax is estimated to reduce Ottawa's revenues by $5.4 billion. Ottawa has twice slashed the GST by that amount since Stephen Harper became prime minister in 2006.

The government has thus far insisted that a return to balanced budgets can be achieved without raising taxes or significantly cutting program spending, instead relying on basic economic expansion.