Declaring that there are still significant risks to Canada in the still–fragile global economy, Federal Finance Minister Jim Flaherty brought down a tight-fisted federal budget Thursday that promises to balance the nation’s books in 2015.

“Our government is committed to balancing the budget in 2015,” Flaherty said in his budget speech. “In uncertain global times, the most important contribution a government can make to bolster confidence and growth in a country is to maintain a sound fiscal position.”

He noted that the 2013 budget — called the Economic Action Plan — contains the smallest increase in discretionary spending in almost 20 years.

Ottawa intends to close several tax loopholes, improve the fairness of the tax system and beef up the Canada Revenue Agency’s compliance program to help squeeze more savings out of the system. Measures in this year’s budget will result in savings of about $500 million, rising to $2.3 billion in 2017-18 for a total of $8.4 billion over the next five years, according to budget documents.

Federal forecasts indicate that the deficit — $25.9 billion in fiscal 2012-13 — will shrink to $6.6 billion in 2014-15. A small surplus of $800 million is predicted for fiscal 2015-2016.

However, the budget is not all about savings. There are several initiatives that focus on jobs, infrastructure and assistance to manufacturers and others to compete in the global economy.

On the jobs front, the government is proposing to create the $500 million Canada Job Grant that will connect skills training with employers and jobs. The grant “could provide $15,000 or more per person to ensure Canadians are getting the skills employers are seeking,” Flaherty said. The grant will be introduced by renegotiating the Labour Market Agreements with the provinces and territories in 2014-15.

As well, Ottawa intends to help create opportunities for apprentices on federal construction and maintenance contracts by working with the provinces and territories to harmonize requirements.

There are also a number of targeted proposals to help keep Canadian firms competitive and growing. Among them:

  • An extension of the temporary accelerated capital cost allowance for new investment in machinery and equipment in the manufacturing and processing sector for an additional two years. This will provide the sector with $1.4 billion in support over four years.
  • Renewal of the Federal Economic Development Agency for Southern Ontario with funding of $920 million over five years to help create job opportunities and encourage economic growth in the region.
  • Expansion and extension of the Hiring Credit for Small Business, allowing Canadian small businesses to reinvest $225 million in job creation in 2013.

The budget also calls for $47 billion in new infrastructure spending beginning in 2014-15. Included in this is investment of $32.2 billion through a Community Improvement Fund to build roads, public transit recreational facilities and other types of infrastructure. There is also $14 billion in a new Building Canada Fund to support major economic projects that have a national, regional and local significance.

Finally, the budget proposes a number of measures designed to support research and innovation: $225 million for advanced research infrastructure and the Canada Foundation for Innovation’s long term operations; $165 million in multi-year support for genomics research; and $325 million over eight years to Sustainable Development Technology Canada to support development of new clean technologies.