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Ottawa's big infrastructure spending stimulus program isn't making a significant impact on the economy yet and shouldn't be expected to before the latter part of this year, parliamentary budget watchdog Kevin Page says.

“There's no way it could be working now. There's no way the money would have flowed,” the parliamentary budget officer told reporters after releasing a study warning that Ottawa will still be in deficit five years out and that Canada will shed another 100,000 jobs over the summer.

“It's probably too early to expect that stimulus would have a significant impact…I think we're still a quarter or two away from having an impact on the economy.”

A Harper government advertising campaign that began in June says that 80 per cent of this year's stimulus cash is already “being implemented,” but Mr. Page says Ottawa's not yet provided details to verify how much infrastructure funding has flowed out the door.

“I think the government is provided information on commitments. When we actually get the data to see whether the shovels are in the ground…we'll see the magnitude of the impact.”

Mr. Page's office was set up by the Tories in 2008 to fulfill a campaign pledge for “truth in budgeting,” but, as might be expected, he has become a thorn in the Conservatives' side for questioning government forecasts and estimates.

He warned not to underestimate how long it takes to funnel money out the door and negotiate deals with provinces on infrastructure projects.

“At best you're going to start to see [an impact] in the third or fourth quarter and in 2010.”

This fiscal year alone, more than $14-billion or one third of Ottawa's stimulus plan is devoted to infrastructure spending.

Asked if he thought Ottawa should unveil further stimulus spending on top of $47-billion slated for this year and next, Mr. Page said Canada should first focus on rolling out aid that's already been announced.

Prime Minister Stephen Harper voiced a similar message in Italy Wednesday as Group of Eight industrial nations gathered, urging leaders to work first on funnelling already-committed aid out the door.

Sharply diverging from Ottawa's official forecasts, Mr. Page is warning the federal government will still be deep in the red five years from now, projecting a $16.7-billion deficit in 2013-14 – the very same year the Conservatives have promised to balance the budget.

He said big spending cuts or tax hikes may be needed to close this gap, adding that about $12-billion, or three-quarters, of this is a permanent structural shortfall that won't be eliminated by rebounding tax revenue as the economy recovers.

Ottawa finds itself in this situation partly because the economic engine that powers this country has shrunk during the downturn, Mr. Page said.

Even so, he acknowledged, Canada's fiscal troubles are mild compared with the United States' or other peers'.

He said a deficit of $16.7-billion in 2013-14 is small when compared to a $1.6-trillion economy and pales in comparison to deficits Canada has faced in decades past.

Still, Mr. Page cautions that Ottawa will find itself ill-prepared to handle growing demands for more health care spending as a demographic shift to an older population starts in 2011, when the first of the huge Baby Boom generation hit 65 years old.

“Fiscal pressures are going to grow significantly …It's not a good place at all to be. We've been thrown off course.”

2011 is the beginning of what's been called a “demographic time bomb”: an explosion of the 65-plus population over two decades coupled with a sharply declining proportion of Canadians in the work force as boomers retire.