Freed from the nuisance of sitting in Parliament, Finance Minister Jim Flaherty will have plenty of time to contemplate his next budget. Indeed, many Canadians are probably hoping that he’ll devote himself to getting the country’s finances in shape for the long slog ahead.

Before the recent financial crisis, Canada was in relatively good fiscal shape. It was certainly better off than most of the world’s leading economies. But the crisis and recession have taken their toll, due in part to the massive fiscal stimulus that governments around the world have used to keep the global economy from sinking further. As a result, national surpluses have evaporated and deficits are back.

Whether the stimulus packages deserve the credit or not, the global economy did not go over a cliff. Its growth prospects are even picking up a bit.

That said, we are far from in the clear. Despite the brighter outlook, it’s not yet certain that the global economy can move forward under its own power (without the assistance of massive government stimulus). Nor have fundamental worries, such as the buildup of global imbalances, been properly addressed.

At the same time, Canadian households are continuing to pile up debt to worrying levels. The country’s demographic realities may also operate as a drag on the economic recovery. The percentage of older Canadians within the population continues to increase, creating long-term problems for the economic outlook. These include restraints on the labour force and growing claims on social services — most notably, health care.

To prepare for these challenges, policy-makers must not let past, hard-won victories against debt slip away. They need to muster the political will to move the budget back toward balance.

Flaherty has promised to do just that, but he can’t hope to rely on growth to get there. That would be a fond wish at the best of times. Now, amid the prospects of prolonged deleveraging and crushing public debt burdens, the old economic order is being overturned. It can’t be expected to fill the widening hole in the country’s finances.

Instead, Flaherty must contemplate higher taxes, lower spending — or both. These will be difficult, unpopular choices. But if the goal is to secure Canada’s economic future, they can’t be avoided.