One ace up his sleeve is deep spending cuts to government departments, including controlling salary increases for the public service, which he said he will outline next week.
"Our concern, as it was with equalization (to provinces), is to control the rate of growth," he said. "This is a serious time. Certainly we're of the view that public sector compensation should not lead private sector compensation."
Flaherty said the government is also moving ahead on a stimulus package, including accelerated infrastructure spending, but would make no announcements next week.
NDP Leader Jack Layton called on immediate action, noting that the United States had already committed $25 billion to the auto sector and Congress was debating an additional $25 billion.
"Our government has been missing in action, and the result is you get people thrown into the streets," he said.
The budget officer's 42-page report on the budget - the first issued by the newly created office - is the most detailed analysis of the predicament facing budget planners in the Finance Department.
It presents three scenarios that go from a modest surplus to a deep deficit depending on assumptions of economic growth.
Taking the average of 11 private sector economic forecasts - that Canada will skirt a recession with 0.5 per cent growth next year - Ottawa will register a $3.9-billion deficit in the first year and $1.4 billion the following year.
Under the low scenario of a 0.3 per cent contraction next year and slower growth going forward, however, Ottawa would plunge into a deeper hole with four years of large deficits.
It would register a $13.8-billion deficit next year, and deficits of $13.2 billion, $11.8 billion and $11.8 billion going forward, for a four-year total of $50.6 billion.
A sunny view sees the economy growing by a relatively robust 1.5 per cent next year and the government remaining in the black.
The budget office projections assume Ottawa takes no additional measures - increased spending, tax changes or spending cuts - that would have a direct impact on the budget.
TD Bank chief economist Don Drummond - who several weeks ago predicted a $10-billion deficit for next year - said his view now is that conditions have worsened and that the deficit could be even greater than Page's low-case scenario.
He said when he did his analysis, he had expected the economy to be flat next year. But at the time, he also made a pessimistic assessment where the economy shrinks by 1.8 per cent in 2009.
"The world is really falling along our pessimistic scenario," he said. "I think the (budget officer's) average is on the sunny side and I think there's even a downside to the low forecast they chose."
On Wednesday, Bank of Canada governor Mark Carney conceded for the first time that Canada faces a real possibility of sliding into deficit with at least two negative quarters of growth.
The report outlines several moves the government could make, including passing a stimulus package of tax cuts and spending increases, but as a neutral officer of Parliament, Page offered no preference.
He said a stimulus package may not necessarily push deficits higher if the measures boost growth and government tax revenues.
The biggest cause for budget deficits is reduced government revenues, stemming from lower income and corporate taxes and particularly the loss of GST money. But spending will also naturally rise.
Page said job losses, a clampdown on credit, and weak consumer confidence mean "private-sector forecasters have significantly downgraded the near-term outlook for the Canadian economy."
Job prospects are gloomier than expected in 2009. An assumed unemployment rate of 6.4 per cent - factored into the last federal budget - is actually expected to peak closer to 6.9 per cent next year.
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