OTTAWA - The government gave itself more wiggle room Monday to miss its target to reduce its $25-billion deficit in three years.

Finance Minister Jim Flaherty hedged on meeting the goal, saying the government is on track to erase its fiscal albatross in the "medium term" but wouldn't say if that meant by 2015-16, the date it set for itself.

With falling commodity prices emptying government finances, and the prime minister's comments last month that shielding the economy from global uncertainty takes priority over balanced budgets, Flaherty can afford to be coy.

And despite the ongoing problems in Europe and the U.S. that continue to pinch Canada's economic growth, Flaherty said there are some positive signs on the horizon that could reverse downward projections.

"So it's not all doom and gloom," he said after meeting leading private sector economists for an update on where the economy is headed.

"There are some bright lights in the economy like the lumber sector, the auto sector, like the financial services sector and so on. And relatively speaking Canada is doing quite well (compared to other G-7 countries)," he said.

"The reality is Europe is in a recession and the United States has modest economic growth. This is encouraging. The housing market in the United States is finally showing some signs of life. This is very good for the Canadian economy, especially the lumber business in Canada."

Flaherty's comments followed his department's release of average growth forecasts by the economists he met.

The most significant revision from the numbers they crunched in March is next year when real GDP growth is expected to slump to 2% from 2.4%, but is then expected to rebound to 2.5% in 2014 and 2015, barring unforeseen economic circumstances.