The Canadian Press - ONLINE EDITION

Feds expected to shuffle funding as another austerity budget limits options

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OTTAWA - Federal Finance Minister Jim Flaherty is expected to shuffle government spending priorities without adding any new money later today as he delivers his eighth federal budget.

The Conservatives have been bombarding Canadians with millions of dollars worth of Economic Action Plan advertising for the last month, but the latest version of the heavily branded budget blueprint won't be heavy on action.

The Harper government has a self-imposed 2015 deadline for eliminating the current $26-billion federal deficit — in time for the next scheduled election — but stalled economic growth is making Flaherty's life difficult.

The finance minister will be robbing Peter to pay Paul as he attempts to bolster skills training, help manufacturers and pay for critical infrastructure — all without spending additional dollars.

A Conservative government that has been busy negotiating foreign trade deals may also try to find some resources to help exporters access booming markets in Brazil, China and elsewhere.

Following back-to-back austerity budgets, Flaherty maintains he's "absolutely" still on track to balance the books in 2015-16 — even with less-than-expected government revenues in the coming year.

Look for expiring programs, such as the $8.8-billion Building Canada Fund, to be extended with great fanfare as a government on a short leash attempts to create the impression of forward movement.

The most significant moves will come in skills training, if pre-budget government spin is any indication.

Flaherty has indicated Ottawa wants a greater say in how some $2.5 billion a year is spent on skills development. The money currently goes to the provinces but trial balloons have been floated that the Conservatives — with federal-provincial labour market agreements up for renewal — want a more hands-on federal approach.

There were 221,000 job vacancies in December, according to Statistics Canada, even as 1.3 million Canadians were unemployed.

The Conservatives have also been green-lighting the arrival of more temporary foreign workers, with an estimated 338,000 in the country.

Flaherty may also use about $400 million being shaved from a business tax credit program for scientific research and put the money toward a fund for innovative product development.

"To survive you need to be innovative," Flaherty said as he tried on the traditional new budget shoes in Toronto this week.

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