The federal government is expected to cut spending by nearly $6 billion over the next three years and possibly eliminate up to 30,000 public-sector jobs when the smoke clears from Thursday's budget, CTV News has learned.

The Tories' first majority government budget since coming to power in 2006 will also extend the $1,000 small-business hiring credit, link immigration to labour shortages and overhaul billions in research dollars, CTV also learned.

It will be a blueprint to eliminate the deficit by 2015 and possibly a year earlier, TD Bank chief economist Craig Alexander told CTV's Canada AM Thursday.

"They're not going to do it through any increase in taxes, but they are going to be restraining program spending," Alexander said.

The budget will be about job growth and long-term prosperity, but it's likely people will focus on the reduction of the federal public service, reforms to the pension system for public servants and MPs, he said.

Focus will also be on a proposal to extend the eligibility requirement for the Old-Age Security benefit to 67 from 65, which is probably at least 10 years down the road, Alexander said.

The Canada Pension Plan - reformed in the 1990s - will not be affected, he said.

While the austerity budget will be lean on goodies for the majority of taxpayers, it's expected to offer incentives to improve native education, Alexander said.

"I think a very important measure will be an increase in funding towards native education," he said, adding there's been a funding gap for some time that's due for a correction.

Finance Minister Jim Flaherty said while the public service will face budget cuts, it won't affect services it offers.

"The majority of the spending review reductions relate to back-office operations in government. They don't relate to service delivery by government," he told reporters Wednesday.

He said his austerity program would be modest compared to former finance minister Paul Martin's budgets for the Liberals during the 1990s.

Flaherty had asked all federal departments to find budget savings scenarios of between five and 10 per cent, for possible spending cuts totalling between $4 billion and $8 billion.

Among the expected measures in Thursday's budget:

  • Cuts totalling about $6 billion, or 8.5 per cent of government program spending, over three years that will have an impact on everything from military spending to environmental monitoring and the CBC.
  • Changes in the long term that will raise the age of eligibility for old age security to 67 from 65, affecting most Canadians younger than 50.
  • Streamlining the environmental assessment process for major projects such as mines and pipelines.
  • More targeted government subsidies for research and development.
  • Changes to skills training, the qualifications of economic migrants and some employment insurance programs in an effort to make Canada's labour market more productive.

The official Opposition NDP is already accusing the Harper government of engineering an ideologically driven race to the bottom.

Harper's minority run of politically popular tax cuts and lavish pork-barrel spending, say New Democrats, have set the table for this day of reckoning.

"The Conservatives have caused the problem by gutting the fiscal capacity of the government," Thomas Mulcair, the newly crowned NDP leader, said Wednesday.

"Now they're saying, oh, gee whiz, no more fiscal capacity in the government, we know what we'll do, we'll start cutting the services of the government."

With more than three years of majority rule ahead, former government ministers agree now is the time for the Conservatives to act boldly.

And despite better-than-expected numbers that have economists predicting the 2011-12 federal deficit could come in as much as $10 billion below the $31 billion projected last November, deep government cuts remain on track.

- With files from The Canadian Press

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