It is difficult to know what exactly to make of John Manley's content-free economic statement. The Finance Minster recently revealed economic growth would likely fall by 1% from earlier estimates yet he provided no revenue or spending forecasts. But thanks to a $4-billion contingency fund, Ottawa remains on track to balance its budget.

What is certain is that Mr. Manley has raised the pressure on Ontario Finance Minister Janet Ecker to update the province's books. There is concern the Ontario government is sliding towards a deficit and it must either reassure taxpayers this is not so or, if it is, take action and reign in spending.

Ms. Ecker is bravely trying to downplay the problem by pointing to the government's four balanced budgets as proof they will stay on track and do it again. But it is a sorry fact that the Eves govern-ment has squandered the hard-won fiscal credentials built up by Mike Harris. When Mr. Harris said he would balance the budget (or cut taxes) taxpayers believed him.

Mr. Eves should have been able to tap into that reputation, but instead he abandoned a reformist agenda, delayed promised tax cuts, pushed spending up to new heights, and shunned selling government assets. Because of his record, the government no longer has the credibility to talk its way out of deficit speculation.

This is not to suggest the Eves government is fiscally irresponsible or that the budget will not balance. But a downward revision in federal economic projections puts this in doubt. The need for an economic update in Ontario is obvious. A slowing economy will yield lower tax revenues, perhaps half a billion dollars less. SARS has pushed health-care spending up by more than $1-B. Moreover, Ottawa is unwilling to help pay for SARS expenses, and there is a strong possibility that $770-M in federal transfers will never arrive because the money is contingent on Ottawa running a $6-B surplus.

The longer the government waits to tackle these problems the harder the job will be. Governing is a lot like steering an ocean-steam ship: Even with dark storm clouds gathering on the horizon it takes time to shift direction.

Should Ottawa fail to provide meaningful SARS assistance the likelihood of Ontario recording a deficit goes way up. A SARS deficit will wash with taxpayers only if the government has taken every effort to control its own spending. That includes fulfilling the $2.2-B asset sale and finding $800-M in operational savings the budget outlined. Running a deficit without acting on these would be unacceptable to taxpayers: It would signal the Eves government is not serious about balancing the books or controlling costs.

Of course, the alternative to presenting an update is to do nothing and continue to tell voters the books are in order. This is a high-risk strategy. Back in 1996, the B.C. New Democratic govern-ment said its budget was balanced and quickly called an election. After the votes were counted and the NDP safely returned to office, they admitted the budget was, in truth, running a deficit.

The Eves government might be tempted to tear a page from the fudge-it-budget playbook to get through the election. But if voters later discover the books are gushing red ink, they will react the same way B.C. voters did and punish the government at the next opportunity. Today, the B.C. NDP has two seats in that province's legislature. Hopefully this is not the course Premier Eves is charting for his government