The Conservative government's heralded return to balanced budgets hinges on using $2-billion in contingency funds, one-time asset sales and expectations that oil prices are poised to rise.

Finance Minister Joe Oliver released a 2015 budget that includes tax cuts for small business, future cash for public transit and increasing the maximum amount Canadians can contribute annually to tax-free savings accounts to $10,000.

The 2015 budget includes:

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(Read the full text of the budget speech here)

Return to surplus

The 2015 budget promises to climb out of deficit and post a $1.4-billion surplus in 2015-16. That is accomplished in part by reducing the size of the annual contingency fund from $3-billion to $1-billion per year over the next three years. Had Ottawa maintained the contingency fund at the levels used in budgets since 2012, the forecast would show deficits running for another two years.

"It's a bit of economic sleight of hand," NDP Leader Thomas Mulcair said. "The contingency fund as the Parliamentary Budget Officer said very recently is there for real emergencies.  That's why it's called a contingency fund.  It's not something you tap into on budget day because you're missing a couple of billion dollars."

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Mr. Oliver defended his government's accounting.

"During periods of surplus, there isn't a need for the same contingencies because when you combine the surplus with the contingency, you have an adequate cushion," he said. "Canadians understand if you have more money coming in than you have going out, your books are balanced."

While Mr. Oliver's November fiscal update assumed the price of North American crude would remain at the then-current price of $81 (U.S.) per barrel, the 2015 budget assumes prices will average $54 in 2015 and then rise to $67 in 2016 and $75 in 2017.

Asset sales, including the recent sale of the government's remaining shares in General Motors, added $1-billion to Ottawa's bottom line in 2015-16.

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Tax-free savings account increased

One of the largest budget measures that kicks in this year is the near-doubling of the maximum amount Canadians can contribute to TFSAs each year. The current limit of $5,500 will be raised to $10,000.

Support for families

The budget confirms major measures announced last year, including allowing parents to split their income for tax purposes and an increase in monthly payments to the Universal Child Care Benefit. These measures are paid for in part by the elimination of the existing Child Tax Credit. The package of tax reforms are worth an estimated $4.5-billion a year.

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"This budget helps those who need it least," Liberal Leader Justin Trudeau said. "There is nothing in here for the middle class and those hoping to join it.  There's no plan for jobs and growth.  We will not be supporting this budget."

Public Transit

The government is proposing a new approach to funding transit that would be based on long-term loans and private sector involvement. The new Public Transit Fund would start at $250-million in 2017-18 and grow to $1-billion a year in 2019-20. The government suggests municipalities could borrow against this revenue stream. Further details are promised in the future.

Ontario Finance Minister Charles Sousa said the federal government is not giving his province enough money for new infrastructure construction, such as public transit in Greater Toronto. He said Mr. Oliver should have used the one-time windfall from selling its GM shares to pay for new transit construction, as Ontario is doing, rather than using it to balance the books.

"Frankly, when it comes to transit, they've kind of missed the train," Mr. Sousa said. "They're not even in the station."

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Mr. Sousa also chided the feds for not matching Ontario's $1-billion plan to build a road or rail line to the Ring of Fire mineral deposit in Northern Ontario. He said the federal government's relatively small contribution to developing the area is "a slap in the face."

Seniors

The budget relaxes the existing formula that requires Canadians to withdraw minimum amounts from their Registered Retirement Income Funds. For example, under existing rules a 71-year-old must withdraw at least 7.38 per cent of their RRIF that year. Under the new formula, that would be reduced to 5.28 per cent. The government is also extending the Employment Insurance Compassionate Care leave from six weeks to six months for Canadians caring for gravely ill family members. The budget also announces a new Home Accessibility Tax Credit of up to $1,500 for the cost of home renovations for seniors or people with disabilities.

Security

Ottawa is spending an extra $439-million, spread over five years, on various national security measures. They include more money for counterterrorism efforts at the RCMP and the Canadian Security Intelligence Service, beefed up Parliament Hill security and an extra $2-million a year for the Security Intelligence Review Committee to enhance its oversight of CSIS's recently expanded operations.

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Defence spending

The military budget is getting a significant lift – $1.1-billion over three years, starting in 2017-18. Ottawa is raising to 3 per cent from 2 per cent the yearly escalator clause in the department's budget. The government said the additional money will enable Canada to deploy a "combat-capable military ready to serve at home and abroad." Funding for the department of National Defence stood at $20-billion in 2014-15.

Ottawa will also spend $360-million this year on its deployment in Iraq and $7.1-million to train Ukraine's security forces.

Civil service

Ottawa is targeting what it calls a "failing" and "antiquated" system that allows federal bureaucrats to bank their sick days. It wants to replace the existing practice with a formal disability plan through collective bargaining. If it doesn't get what it wants through negotiation, the government said it will implement a modernized sick leave and disability regime "within a reasonable time frame." And it booked a $900-million saving in the current fiscal year tied to the change.

Small business

Roughly 700,000 small businesses (those with less than $500,000 in annual income) are getting significant tax relief. The tax rate for these companies will fall to 9 per cent in 2019 from 11 per cent in what Mr. Oliver says is an incentive for businesses to grow, hire and invest. The move is expected to provide $1.2-billion a year in tax relief when it's fully implemented.

Farmers and fishing businesses are getting a higher lifetime capital gains exemption when they dispose of property. The limit rises to $1-million from roughly $800,000 for all property sold on or after budget day.

Manufacturing and innovation

During the recession, the government introduced a temporary tax break to encourage manufacturers to quickly write off part of the cost of modernizing machinery and equipment. The accelerated capital cost allowance has been repeatedly extended since 2007. This budget rejigs and extends the measure for another decade, cutting taxes by up to $360-million a year.

The budget also provides $100-million over five years to help auto parts makers develop new products. And the government is putting an extra $1.3-billion over six years into the Canada Foundation for Innovation, which doles out grants for research infrastructure, mainly at colleges and universities.

With files from Adrian Morrow