Newspaper article The Canadian Press

Conference Board Predicts It'll Be a Decade before Ontario Has a Balanced Budget: Balanced Budget Long Way off for Ontario

Newspaper article The Canadian Press

Conference Board Predicts It'll Be a Decade before Ontario Has a Balanced Budget: Balanced Budget Long Way off for Ontario

Article excerpt

KITCHENER, Ont. - Premier Dalton McGuinty agrees with a Conference Board of Canada report warning Ontario won't be able to balance its budget on schedule without significant cost reductions, but says the needed changes are being made.

The Ottawa-based think-tank said Thursday its analysis suggests Ontario must rein in health-care cost increases if it wants to balance the books by 2022, because potential sustainable economic growth for Ontario is dropping to 1.9 per cent a year.

"The projected sluggish growth in Ontario's long-term potential output plays a crucial role in our analysis of the revenues available for government public services, notably health care," Glen Hodgson, the board's chief economist, said in a statement.

"If Ontario residents expect their publicly funded health care system to continue to grow at or near recent levels, they will most likely have to pay for it through higher taxes," he said.

"If the public is unwilling to accept and support higher taxes, other transformative changes will likely be required to how publicly funded health care is delivered in Ontario."

Ontario has already begun to make the changes needed to reduce costs and has no intention of raising taxes to balance the books, McGuinty responded at an event in Kitchener, Ont.

"It makes it clear that if we don't make changes, if we don't do things in a different way, we're not going to be able to balance our budget in 2017-18, and I couldn't agree more with that," he said.

"That's why, starting with our last budget, we began to make some decisions that put us on track to balance, including inviting (economist Don) Drummond and his commission to offer his best advice with respect to changes we need to make."

Drummond will release a report this month with hundreds of recommendations on how to hold the overall increase in government spending to just one per cent a year. Eliminating or reducing some services will be among the suggestions.

The government hopes to limit the growth in health care, which eats up about 42 per cent of program spending, to three per cent a year. Drummond has suggested that could mean cuts of up to 30 per cent in other ministries. …

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