Federal revenue will take a hit from falling oil prices and recent tax cuts but a return to surpluses is still expected next year – and possibly sooner – according to the fall economic and fiscal update.

Finance Minister Joe Oliver released the update Wednesday to a business audience in Toronto. "It is a prudent projection adjusted for the recent decline in oil prices," said Mr. Oliver of his latest figures.

Mr. Oliver noted that surpluses will grow over time and said that is partly because of the government's efforts to reduce the size of the federal bureaucracy.

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The revised forecasts show a string of annual budget surpluses beginning next year:

$1.9-billion in 2015-16

$4.3-billion in 2016-17

$5.1-billion in 2017-18

$6.8-billion in 2018-19

$13.1-billion in 2019-2020.

Growing surplus seen in new federal budget forecast

These figures leave little room for the Conservative government to make major new spending or tax cut announcements in the 2015 budget. The update confirms that recent government announcements related to tax cuts for families and small business will have the effect of reducing the size of future surpluses by about $5-billion per year. (What is income-splitting? Read The Globe's easy explanation)

The update indicates that Ottawa would have posted a small surplus in the current 2014-15 fiscal year if it were not for the package of recently-announced tax cuts. Instead, Ottawa now expects a $2.9-billion deficit this year.

Mr. Oliver's speech to a luncheon of the Canadian Club, which was sponsored by Borden Ladner Gervais, EY and TD Bank, included several partisan shots at the opposition, particularly Liberal Leader Justin Trudeau.

For instance, Mr. Oliver criticized the Liberal Leader for saying he would reverse the government's recent tax cut allowing couples with children under 18 to split their income for tax purposes.

"Taking money out of the pockets of middle-class and lower-income Canadians does not sound like a winning platform to me," said Mr. Oliver. "But hey, that's what he said. Of course, he has said a number of things."

Mr. Oliver did not take questions from the media following his speech.

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NDP Leader Thomas Mulcair and Mr. Trudeau shot back Wednesday, saying the numbers show the government is giving billions in tax cuts to well-off Canadians while most will not receive anything.

Mr. Mulcair called income splitting a "reverse Robin Hood" tax move.

"Never before has a government come up with something like taking from the poor to give to the rich, which is of course the essence of the program that even [former Conservative finance minister] Jim Flaherty said made no sense at all," said Mr. Mulcair, who spoke to reporters at the same Toronto hotel where Mr. Oliver delivered his speech.

The NDP Leader said his party will oppose income splitting in Parliament but declined to say definitively whether he would pledge to reverse it if elected. He suggested the NDP would fund its platform through higher corporate taxes.

"We will not touch personal income tax," he said.

Mr. Trudeau told reporters in Vancouver Wednesday that the update reflects the impact of an "unfair" income splitting policy.

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The government figures are based on an average of forecasts provided by private sector economists. However the update notes that those forecasts from economists were taken during the first half of September and a lot has changed since then.

The main difference is that those forecasts assumed the price of North American crude would be around $98 (U.S.) per barrel. However prices have dropped by more than 15 per cent from third quarter levels to around $81 (U.S.) per barrel.

Finance Canada notes that while lower oil prices do generate some positive economic activity in terms of higher exports and lower costs for business and consumers, the overall impact on growth is negative.

To account for this, the government is lowering its expectations for revenues by $500-million this year and $2.5-billion per year from 2015-19. In addition, the government is choosing to maintain its $3-billion "adjustment for risk" this year and in future years. That amount is set aside for unforeseen events and goes toward Ottawa's bottom line if it is not used. That would lower the debt in times of surplus.

The government sometimes uses fall updates to cut that contingency in half for the current year to reflect the fact that the fiscal year is more than halfway over. The government is choosing not to do that this year in light of the uncertainty, particularly around the price of oil.

All of that additional caution in the numbers means the government could end up with a surplus in the current 2014-15 fiscal year. The update forecasts a $2.9-billion deficit, but that includes the $3-billion for unforeseen events. The official year-end numbers are normally released several months after the end of the fiscal year ending March 31.

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The government has been posting smaller-than-projected deficits based largely on lower spending. For instance, the Feb. 11 budget said the deficit for 2013-14 would be $16.6-billion, but the final figure was significantly less at $5.2-billion.