Joe Oliver's economic update to show razor-thin surplus

Finance Minister Joe Oliver will open up the country's books Wednesday to demonstrate how, after a flurry of recent tax-cut announcements for families and businesses, his government intends to pay for those measures.

After billions in promises to families and business, finance minister to show how he'll pay for it

Finance Minister Joe Oliver is expected to predict a slimmer surplus in 2015-16 after the government's latest spending promises and a slower economy are factored in. (Adrian Wyld/The Canadian Press)

Finance Minister Joe Oliver will open up the country's books Wednesday. 

He is presenting the annual fall economic and fiscal update to a business crowd in Toronto.

Given the recent flurry of tax-cut announcements, little in the way of new measures is expected to be announced in update.

Rather, Oliver is expected to demonstrate how it is his government intends to pay for those measures. 

"We remain confident we will achieve a budgetary surplus next year," Oliver said earlier this week.

Familiar warnings

In the budget tabled earlier this year, the government had projected a surplus of $6.4 billion for fiscal year 2015-16.

With the recent small business tax credit, a boost to the children’s fitness tax credit and the suite of measures aimed at families announced by Prime Minister Stephen Harper last month, the government has already made new spending commitments of more than $5 billion for 2015-16.

So even as the country's ledger goes from red to black, Oliver is still sounding familiar cautions.

"The global economy is fragile — and commodity prices can be volatile," Oliver said.

Oil, in particular, has shed about a quarter of its value since the summer and while that may be good news for consumers at the gas pumps, Oliver admits it is a drag on an economy that exports a lot of oil.

"This will affect our economy in a variety of ways and adversely affect our fiscal situation," he added. 

Between the additional spending and slower growth, the projected surplus will likely be razor thin.

Campaign promises

"Every single Canadian family with children will benefit," the prime minister boasted as he announced recent family tax cuts and a boost to the universal child care benefit. "Everyone will have more money in their pockets."
Prime Minister Stephen Harper announced a suite of tax cuts for families, including a modified version of income splitting for parents with children under 18, at a community centre in Vaughan, Ont., in October. (Nathan Denette/Canadian Press)

Everyone, of course, but the federal government.

The Conservatives campaigned on a promise to balance the budget before the next election in 2015 — and as recently as two weeks ago, Harper made it clear his government is sticking to the plan.

"I can assure you, we are on track and — we just announced that the budget of last year came in significantly better than anticipated," he said during the announcement of family tax measures in Vaughan, Ont.

In October of this year, the Finance Department reported the official deficit for 2013-14 was $5.2-billion — an improvement of $13.5-billion over what was originally forecast in the 2013 budget.

The official surplus or deficit for 2015-2016 will only likely be released in October of 2016 – a full year after the next election.

In the mean time, it's expected when Oliver presents his economic update it will show the government has enough money to cover its promises, but very little else.

Meaning the Conservatives will continue saying the country can't afford to pay for the election promises of any other party.