The office of the Parliamentary Budget Officer Kevin Page says it disagrees with the economic outlook presented in the Conservative government's 2010 budget, and Ottawa will need to take additional fiscal steps to eliminate the deficit.

"We think there are more measures that need to come if the objective of the government is to get back to balance," Page said on CTV's Power Play.

"When we go forward, we're saying it doesn't get better, the situation continues to stay difficult -- and so you need to take permanent action to reduce (the deficit)," he added.

The PBO report, released Thursday, also says that the longer-term deficit projections by the Tories are too optimistic, with about $20 billion in the difference from their own estimations.

While Finance Minister Jim Flaherty projects a $1.8 billion deficit in 2014-2015, the PBO estimates the deficit will be $12.3 billion. In 2013-14, the PBO estimates the deficit will be $16.3, while the government suggests it will be only $8.5 billion.

The Conservatives have maintained they can balance the books without raising taxes or introducing major spending cuts. The PBO report says that's unlikely.

"PBO's estimate of the structural deficit does not mean that the Government's budget will not return to balance. Rather it suggests that achieving budgetary balance would require: the economy operating significantly above its potential; (or) actions to increase revenues or reduce spending relative to their projected paths," the report says.

Transparency issues

On Power Play, Page said he is still waiting for numbers to be released by the finance department so that the PBO can reconcile its analysis with the one the budget is based on.

"We're struggling to get information," he said. "We have a ways to go in terms of improving the relationship."

"In an environment where the government's saying, 'We can deal with the deficit by spending restraint,' we need to know what has been set aside for various departments. What are the risks that the government may not be able to achieve that restraint?" Page added. "What are the risks in terms of programs and services if the government does restrain operational spending?"

Page has long been a thorn in the side of the Conservatives, who appointed him as the first parliamentary budget officer of Canada.

He predicted budget deficits long before Finance Minister Jim Flaherty would, and has consistently and correctly reported that the government's projections were too rosy.

Last year, Flaherty said Canada would add $100 billion in debt over five years, while Page said the number would actually be $155.9 billion. In this year's budget, Flaherty now says the debt added over five years will be $156.6 billion.

Flaherty responded to the PBO report during question period in the House of Commons.

"The Parliamentary budget officer was wrong before and he's wrong again," Flaherty said. "He's refusing to use projections from the strongest financial sector in the world, that has weathered the recession better than any other country."

Don Drummond, senior vice president and chief economist at TD Bank Financial Group, said the Tories' approach of limiting public spending growth is sound. But questions remain about how spending restrictions will be felt.

"There's a lot of question marks," said Drummond, who worked for the finance department for more than two decades before moving to the private sector. "But in terms of an aspiration they picked the right variable."

"If the deficit doesn't come in, they're going to have to go back and tighten up the spending further," he added.

Throne speech defended

Meanwhile, Prime Minister Stephen Harper praised his government's record in a reply to the throne speech in the House of Commons, which was also streamed on YouTube.

Harper brimmed with confidence about Canada's economic future, saying the country will emerge stronger than any other industrialized country out of the global recession.

"Today, we are emerging from the global recession. Our domestic demand is strong. But our export markets remain uncertain and so we are recovering slowly, though with a growing sense of optimism," he said.

However, Harper stopped short of calling Canada's recovery a sure thing, saying there are still "possible potholes" ahead.

Liberal Leader Michael Ignatieff responded to Harper by saying that he heard nothing in the throne speech to back up the prime minister's reasoning for proroguing Parliament in December.

Harper said Ignatieff had extra time to come forward with proposals because of the prorogation but did not.

The Liberal party has a policy convention later this month.