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Jim Flaherty is no longer waffling about when Ottawa will eliminate the deficit.
"We will balance the budget. And we will do it in 2015," the Finance Minister said bluntly in the House of Commons Thursday as he delivered his eighth budget.
The deficit, pegged at $25.8-billion in the fiscal year that ends this month, will be gone within three years, according to the latest federal budget. And starting in 2016, Ottawa will be collecting billions more in revenue than it spends – more than $5-billion a year by 2017.
That means that Ottawa is about to make a transition into a new fiscal reality – an era of surpluses that conveniently begins just in time for the next federal election.
But it's an era of surpluses without a plan. Mr. Flaherty is conspicuously silent about what the government will do with its fiscal dividend.
The Finance Minister's speech is laced with talk of balance, fiscal responsibility and restraint, without a hint where all those efforts will lead. He doesn't utter the word "surplus" once.
The Conservative government inherited a large surplus when it came to power. It quickly blew through that cushion when the global recession hit 2008. Ottawa has been grappling with deficits ever since, limiting its room to manoeuvre.
Surpluses mean Ottawa will soon have options – to cut personal income tax rates or put money back into neglected programs.
Or perhaps austerity is the ultimate goal, leaving government permanently smaller.
We don't know because Mr. Flaherty offers no clues.
The pivotal year for the government is 2014. The deficit, now nearly $26-billion, shrinks to less than $7-billion. And the next year, it's gone entirely.
The government gets there by holding the line on spending, and then betting on a much better economy. Total government spending grows just $3-billion in 2014-15. That's less than half the growth rate this year, according to the budget.
But the real story is on the revenue side. The deficit is essentially eliminated because the government's take from personal and business taxes shoots up after 2014 on the strength of a rebounding economy.
Mr. Flaherty is betting that 2012 and 2013 are an aberration. The economy grew less than 2 per cent in 2012. The budget assumes growth will be a mere 1.6 per cent this year. But in 2014 and beyond it's a different story as the economy expands as much as 2.6 per cent a year.
There is also the possibility that Mr. Flaherty is being too pessimistic – that Canada will grow even faster as the global economy recovers and the U.S. comes surging back. In that case, the surpluses will be larger and come quicker.
By this time next year, the talk will be all about the surplus.