Federal Finance Minister Joe Oliver delivered on the long-standing promise of his predecessor, Jim Flaherty, today when he unveiled Canada’s first balanced budget since the global financial crisis hit in 2008.

In Tuesday’s budget, the government projects a series of modest surpluses for the next several years, starting with $1.4 billion in 2015-2016 — although this is a far cry from the $6.4 billion surplus that was predicted in last year’s budget.

To get there, the government is cutting its adjustment for risk from $3.0 billion in last year’s budget to $1.0 billion this year, and for the next couple of years. After that, the contingency it sets aside for emergencies rises to $2.0 billion in 2018-2019, and back to $3.0 billion in 2019-2020. If the reduced contingency is not needed, Oliver notes, it will be applied against the federal debt, as will any surplus.

The move to balance is also getting a boost from asset sales, namely the recent sale of the federal government’s General Motors shares, which resulted in a net gain of $2.1 billion over their book value. That sale contributes another $1.0 billion to federal coffers, relative to the $1.2 billion that was forecast from asset sales in the 2014 fall update.

This much more modest surplus picture than the government expected last year comes against the background of a plunge in oil prices that has hammered the Canadian energy sector and been accompanied by a decline in commodity prices generally. Those events have dimmed Canada’s economic outlook for the foreseeable future.

In the wake of the recent market turmoil caused these events, the government is now forecasting real gross domestic product growth of just 2.0% in 2015 and 2.2% in 2016; down from 2.5% for both years in last year’s budget. By fiscal 2017, the government expects to be back on track with last year’s forecasts, albeit for still-modest growth of just 2.3% in 2017 and 2.2% in 2018.

According to the federal budget, the government now sees its revenues rising by 2.8% in the current fiscal year to $279.3 billion, and program spending is to rise an estimated 2.4% to $254.6 billion. Growth in both revenues and spending are expected to accelerate in the next couple of years.

Nevertheless, Oliver sees the surpluses continuing for the years ahead: indeed, the government is pledging to introduce legislation that will require balanced budgets. However, the optimism of previous budget forecasts has dimmed significantly. This budget now forecasts the surplus to more or less remain flat in 2016-2017 at just $1.7 billion, before creeping up to $2.6 billion in each of the next two years, and rising to $4.8 billion in 2019-2020. That is well below the double digit surpluses foreseen by his predecessor by 2019, and well within the margin of economic uncertainty that could thwart those plans.

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