OTTAWA - The good news first.
Canada's economy and the federal government's finances are in relatively good shape.
That is an important and not-to-be-ignored message in Finance Minister Jim Flaherty's annual fall fiscal and economic update.
In terms of jobs and economic output, Canada has already regained all the ground lost as a result of the recession and then some. Compared to our advanced economy peers - the U.S., Japan, Europe - Canada is the very model of prosperity.
But the other message Flaherty delivered Tuesday in a speech at the Fredericton Chamber of Commerce is that there are very serious risks to our prosperity and to the government's treasury dead ahead.
In less than six weeks, for example, the United States could fall off the so-called "fiscal cliff" when automatic tax hikes and automatic sharps cuts in government spending kick in.
As the fiscal and economic update itself notes, if President Barack Obama and the Congress fail to reach a new budget deal by end of this year, the U.S. economy will almost certainly be plunged back into recession. As Canada still relies heavily on the U.S. for its prosperity, Canada's economy would take a major hit.
Flaherty did not explain what his government is prepared to do in that eventuality nor did it describe how falling off that cliff - judged inside the department of finance to be a 50/50 proposition - will affect Canada's numbers going forward.
What Flaherty and his advisors are betting on, however, is the more optimistic scenario, that a budget deal will be reached and that the U.S. economy will continue to grow at a rate of between 2% and 3% for the next few years.
But even still, weak global prices for oil, metals, and all the other resource commodities Canada produces and sells on the world market, will mean our economy will grow slowly.
That, in turn, means a lot less tax revenue.
In fact, the current projection is that Flaherty will have about $36 billion less to play with over the next five years than he thought he would have just six months ago when he tabled the federal budget.
And that brings us to the bad news.
Returning to balanced budgets has been delayed by a year which means that when the Conservatives next face voters in the general election scheduled for the fall of 2015, their budgetary track record would make any fiscal conservative turn pale.
Consider this: By the time of the 42nd general election, the Conservatives will have presented 10 budgets. All but two will have been deficit budgets.
Add up all those deficits, and, according to the government's own predictions, the Conservative scorecard will include adding a combined $150 billion to the national debt.
So far, the Conservatives have added a cumulative $97.6 billion to the federal debt since taking office in 2006 through to March 31 of this year.
Another $52.9 billion in debt will be heaped on that before the federal government is back in a surplus position in the year 2016-17, the first budget year of the next Parliament.
Now, to be fair, the estimates for government revenue, spending and debt will almost certainly change between now and the 42nd general election. In fact, they'll change next spring when we see Budget 2013.
But if the U.S. does veer off the fiscal cliff - remember, that's a 50/50 proposition according to the finance department - expect those numbers to get a lot worse.