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Joe Oliver will mark his first anniversary as Finance Minister in March without having tabled a federal budget. That's just the first sign his dream assignment is not unfolding as planned.

Mr. Oliver reached the pinnacle of policy-making in Ottawa last year with the enviable task of deciding how to spend a fast ballooning fiscal dividend. A decade-long oil boom and postrecession budget cuts enacted by his predecessor had left Mr. Oliver in the sweetest of spots.

The tables have turned so rapidly that the Finance Minister has postponed his first budget until at least April, hoping the oil market will by then have stabilized enough to produce credibly rosier revenue projections than the current sub-$50 (U.S.) per barrel price would allow.

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Even then, instead of swimming in surpluses, Mr. Oliver may need to get creative to fulfill his promise of balancing the budget in 2015-16 and beyond. It would be bad policy to further cut spending just to meet that goal. But, for the Tories, getting back to black is a hell-or-high water commitment.

Fiscally and economically, it's meaningless whether Ottawa posts a small deficit or surplus. The federal government remains on a strong financial footing, largely because the Tories have capped Ottawa's future spending obligations. The move was originally made to free up room for pre-election tax cuts, though those best laid plans may now have to be postponed.

It's unlikely the Harper government would renege on its premature fall decision to proceed with income splitting for couples with young children and boost the Universal Child Care Benefit. But other pre-election tax relief could be scrapped or delayed to keep the budget in the black.

Still, by capping future health transfers and equalization payments to the provinces, the Tories have ensured federal spending will be tens of billions lower than it otherwise would have been. Ditto for the move to progressively raise the eligibility age for Old Age Security to 67.

The Harper government has gone even further when it comes to direct program spending, which has been falling in real terms. This is partly the result of cuts to the CBC and other Crown corporations such as Via Rail. Mostly, it is the result of a reduction in the size of the public service, from which Ottawa has cut 26,000 jobs since 2012 and plans to cut 8,900 more by 2017.

Former finance minister Jim Flaherty was the architect of this dramatic overhaul of the federal budget, setting the table for the smorgasbord of policy options that greeted his successor 10 months ago. Recent economic events have narrowed Mr. Oliver's choices. But the cupboard is hardly bare.

Rather than worrying about whether Ottawa will be slightly in the red or slightly in the black over the next few years, the questions Canadians should be asking are the following: Is a smaller federal government good for the country if it means reduced services and the gutting of federal institutions? And do the Tories have an economic action plan that does not rely on a global commodities supercycle to underwrite growth?

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Former Parliamentary Budget Officer Kevin Page last week said it is a "great confabulation" that the Tories are good fiscal managers. "Our fiscal balance numbers look good relative to other countries, but I fear it's a house of cards when you look underneath at what is going on," Mr. Page said, voicing concern about services for veterans, food inspection and search and rescue operations.

Mr. Page has rarely had a kind word for this government and his disdain for the Tories appears to be personal. (He spoke at a New Democratic caucus strategy session last week.) But his critique could strike a chord with voters if federal services do indeed noticeably deteriorate.

The bigger problem facing the Conservatives, however, is that they staked their reputation as sound economic stewards on Canada's emergence as an energy superpower, to the point of neglecting challenges elsewhere. Doling out pre-election subsidies to manufacturers in Ontario and Quebec is no substitute for a plan to move Canada's economy into the 21st century. The Tories don't appear to have one.

With an unexpectedly extended period of budget preparations ahead of him, Mr. Oliver says he's facing "a great, though not entirely unprecedented challenge." Canada has withstood oil price declines before, he says. Perhaps. But never has Canada's economy been this dependent on oil.

Balancing Canada's budget is not Mr. Oliver's biggest challenge. Balancing its economy is.

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