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The government estimated in the fall that this year's deficit will be around $45 billion, but analysts and early returns suggest it may come in at under $40 billion. The deficit for the 2011 12 fiscal year is expected to be about $30 billion.

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Bank of Montreal economist Douglas Porter said Flaherty is likely to get a more upbeat recovery profile than the one he received in January, when the consensus put growth for this year at a moderate 2.4 per cent. Many analysts now see the economy expanding by around three per cent, which will boost government revenues.

March 22 federal budget, a move that could win NDP support and avert a spring election.

the budget. But facing the prospect of a budget defeat, he said the document will contain items to "engender consideration" among the opposition.

Asked about Flaherty's statements, NDP Leader Jack Layton repeated his list of priority areas and said an election is in the hands of the prime minister.

Liberal Leader Michael Ignatieff said it's "crazy" to cut taxes on profitable corporations while carrying a huge deficit, adding that the number one way to help the economy is to invest in training and post secondary education.

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Sources told The Canadian Press the budget will extend, for two years, the accelerated capital cost allowance to help manufacturers buy new machinery and equipment to boost productivity, an area of concern for the economy.

"If you actually look at people who need help in Canada, there are a group of older people in Nike Stefan Janoski Air Max Blue Canada who are not entitled to Canada Pension Plan benefits who could use some support from government, that's something we are looking at," Flaherty said.

The NDP estimates it would cost $700 million to improve Guaranteed Income Supplement benefits sufficiently to lift all seniors over the poverty line.

The Conservatives have run up the biggest deficit in the history of the country, driven largely by billions of dollars in stimulus funding to help the economic recovery. On Tuesday, Ottawa released estimates showing it will cut spending by about $10 billion next coming year as it ends stimulus funding.

"There will be nothing about corporate taxes in the budget, nothing . it already is the law in Canada that these taxes will be reduced," he said.

Layton also said he wants the government to lift the federal tax off home heating and bring back the eco retrofit program home renovations.

The program is the top ask of the Canadian Manufacturers and Exporters, said chief executive Jayson Myers, and would be timely for firms still recovering from the recession. He calculates it will increase return on investment by 12 per cent in the first three years.

Finance Minister Jim Flaherty announced Wednesday that there will be no big new spending and no tax hikes in Nike Sb Janoski Black White

Flaherty also said he's considering extending support for older workers and those in work sharing programs.

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That won't happen, Flaherty said, blasting the Liberals for all but saying they will vote against the budget sight unseen.

The Bloc might support the budget if Flaherty is able to hammer out a new tax harmonization deal that would see about $2.2 billion in adjustment money flowing into Quebec. But there's no sign a deal is imminent.

"I know what we are able to do and what we are not able to do . in order to deliver a budget that will take us to balance in the medium," he said.

OTTAWA The Harper government is considering help for seniors and older workers in the Nike Sb All Court Ck

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As well, the government is expected to offer additional support to Canada's beleaguered forestry sector, sources said.

The Tories need the support of at least one opposition party to pass the budget and the Liberals and Bloc Quebecois have all but declared they will not support it. That likely leaves the government's fate in the hands of the NDP.

to see action for Canadians, for seniors who are facing a retirement security crisis in this country, for five million families that are waiting for family doctors, for people who can't afford to pay the bills," Layton said.

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The Liberals are demanding that the Tories roll back about $3 billion in corporate tax cuts that went into effect in January, and cancel next year's equally large reduction.

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Flaherty said his prime focus is to stay on track toward balancing the books in four years. He is willing to entertain opposition requests, he added, but will only go so far to avoid an election.

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Flaherty acknowledged the task could become easier if the recent better performance of the economy continues. He is scheduled to meet with private sector economists next week to receive the most up to date forecasts of where the economy is headed.

Federal budget may offer olive branch

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