Article content

OTTAWA – Canada’s budget watchdog says the country is on track to run a $3.6-billion surplus in 2014-15 — which would balance the books a year ahead of government predictions.

But the Parliamentary Budget Officer is urging Ottawa to proceed with caution when deciding whether to use surplus cash to introduce spending initiatives or to bring permanent tax relief.

We apologize, but this video has failed to load.

tap here to see other videos from our team. Try refreshing your browser, or Canada on track to balance the books a year ahead of schedule: budget watchdog Back to video

If not, the PBO says the government risks falling back into deficit once economic growth slows.

[np_storybar title=”Harper government to hand voters spring tax cuts aided by shrinking federal deficit

” link=”http://news.nationalpost.com/2014/10/03/harper-government-to-hand-voters-spring-tax-cuts-aided-by-shrinking-federal-deficit/”]

The Harper government is gearing up for a bonanza tax-cut giveaway in its fall fiscal update that would see cheques landing on voters’ doorsteps next spring.

Stephen Harper said Thursday that his government is about to implement major promises from the last election campaign, likely to include income-splitting for families with children and increased annual contributions for tax-free savings accounts to $10,000.