Ontario lowers deficit to $11.3 billion, but says revenue dropping in 2014
TORONTO - Ontario's deficit has narrowed to $11.3 billion for the year that just ended, about three per cent less than predicted in the 2013 budget, but the province may not be able to meet its target this year, Finance Minister Charles Sousa said Thursday.
A sluggish economy and smaller transfer payments from Ottawa means there won't be as much money in provincial coffers, he said. Revenue will be $3.5 billion lower in the current fiscal year, which started April 1, than was forecast last year.
"Our economy is growing more slowly than anticipated and less than experts expected," he said during a lunch speech to the Canadian Club of Toronto.
"Revenues are not only significantly lower than forecasted in 2010, they're even lower than we expected just last year."
Sousa said the government still plans to balance the books in 2017-18, but their roadmap may change.
"As a result of federal cuts and slower economic growth around the world, short-term deficit targets over the next year may not be met," he said.
The Liberals will preserve Ontario's cherished public services and make investments to create jobs and stimulate the economy, he said.
"We're going to continue to invest in infrastructure, we're going to continue to invest in skills and training, and we're going to maintain a very dynamic climate so that we can attract more business investments to do business here in Ontario," he told reporters.
"And in the result of that, we may not meet our short-term target. But we have a number of initiatives that's going to be coming out in the budget that'll display and highlight how and why we will, in fact, balance the books by 2017-18."
However, the Liberals are also predicting that Ontario's economic growth will average 2.1 per cent between 2014 and 2035, lagging behind the national and U.S. averages.
Sousa didn't provide any details about how the Liberals will meet their deficit elimination target with a slower-than-expected economic growth and less money coming in, such as raising taxes and cutting spending.
"What we do is we adjust as necessary," he said.
The bottom line is that the Liberals have no plan to kill the deficit, which threatens health care and education, said Progressive Conservative critic Vic Fedeli.
"Leave it to the Liberals to celebrate the fact they're spending $11.3 billion more than they're taking in," he said.
If you do the math, it's clear that the Liberals didn't beat their target last year, Fedeli said. The $11.7-billion estimate included a $1-billion emergency reserve.
"The deficit should have been $10.7 billion if it met those numbers, because it wouldn't have to use those reserves."
On Tuesday, the Tories released leaked documents that they said show the Liberals plan a month-long spending spree before a May 1 budget that will increase spending by nearly $6 billion.
The government refused to confirm details but did not deny that the documents were authentic.
The fate of the minority Liberals rests on this year's spending blueprint, which could trigger an election if both opposition parties vote against it.
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