Ottawa projecting $3.7B budget surplus for 2015-16

OTTAWA – The Harper government says it will have a bigger than expected surplus in two years, in time for the 2015 fall election.

Finance Minister Jim Flaherty's latest fiscal projections show a surplus of $3.7 billion in fiscal year 2015-16, almost $3 billion more than predicted in the March budget.

Even so, that could still be a conservative estimate, since Flaherty is subtracting $3 billion from the actual projections in case things turn out worse than he expects.

The fiscal forecast would end seven years of consecutive deficits, a trend that has added more than $150 billion to the national debt.

The government expects the deficit in the current fiscal year to be $17.9 billion — $1 billion below the budgeted number — as a result of better-than-expected savings from cost-cutting measures and lower interest charges that more than offset lower revenues from slow economic growth.

Flaherty says the government also expects to realize about $1.65 billion in savings from the throne speech pledge to freeze internal departmental budgets, which will occur in 2014-15 and 2015-16.

And he will go ahead with long-planned sales of assets, including Ottawa's remaining stake in General Motors, which could net about $2.6 billion, as well as the Ridley coal terminal in British Columbia and the Dominion Coal Blocks, two parcels of Crown lands also in B.C.

The government is also booking more than $2.8 billion costs for disaster relief due to June's devastating flooding in Alberta, on top of the $60 million already committed for the Lac-Megantic train derailment in Quebec.