OTTAWA - It's still possible for Ottawa to balance the books in 2014 as the government promised and the economy doesn't have to improve to accomplish the feat.
Largely overlooked in the fall economic update released this week is that Finance Minister Jim Flaherty has pumped up his contingency reserve or rainy day fund.
That may be wise, say analysts, given that global uncertainty is rising. But it also increases the possibility that Ottawa's numbers will come in better than thought in future years.
Rather than slotting $1.5 billion a year in the margins of the budget calculations in case economic growth doesn't meet expectations, Flaherty this week doubled the buffer for 2011-12 and for 2013-14 and tripled it for 2012-13.
That's an extra $6 billion in accounting slight of hand that could push the expected $3.5-billion deficit in 2014-15 into a surplus.
Overall, the contingency set-aside totals $12 billion for the four years in question (including $1.5 billion for 2014-15), meaning if the economy performs as private sector economists expect, Ottawa will have that much money to add to the bottom line.
While significant, it's not enough to balance the budget one year earlier, however. The update projects a deficit of $15 billion in year 2013-14.
