Federal Finance Minister Jim Flaherty is determined to balance the government’s budget by fiscal 2015/16 (ending March 31) and to do it with a comfortable margin. In Tuesday’s federal budget, he’s forecasting a $6.4 billion surplus for that year.

This year, he’s projecting a $2.9 billion deficit, and that includes a $3-billion downward adjustment to revenue assumptions to cover the risk of lower-than-expected revenues or higher than expected expenditures. Thus, it’s possible that he may balance the books this year.

This hasn’t been easy to do. All the obvious spending cuts and palatable tax increases have been instituted. But now, Flaherty is resorting to a “classic” two-year freeze on government department operating budgets. He is finding new ways to increase the tax take from tobacco (indexing the tax to inflation and eliminating lower taxes in duty free shops). Further, he is calling for a suspension of accruals of funds for future Defence Department capital spending for the next four years and reducing its compensation costs by getting civil servants to contribute 50%, vs the current 25%, of their benefit costs.

If Flaherty succeeds in eliminating the deficit on schedule, we could see the start of a virtuous cycle with ever-rising surpluses — which might even be recession-proof. That is, the surpluses would decline during a downturn but would bounce back up with economic recovery.

This would be very good news. Despite being in the best shape of the G-7 countries (the U.S., Japan, Germany, the U.K., France and Italy), Canada still has more than $600 billion in accumulated federal debt, equivalent to 33% of gross domestic product. Surpluses are needed to start whittling that down.

The Department of Finance Canada projects surpluses of around $8 billion in fiscal 2017 and 2018 and $10 billion in 2019. That assumes no recession or growth pause but also no growth surges, with real GDP rising an average 2.4% — the average forecast from private sector economists — through that period.

Another six years without a recession would be unusual. The normal business cycle — from one economic downturn to the next — is six or seven years. We’ve already had four years of recovery from the 2008/09 recession.