Newspaper article The Canadian Press

Ontario's Deficit Now at $10.9B, Lower Than Projected $12.5B:Sousa

Newspaper article The Canadian Press

Ontario's Deficit Now at $10.9B, Lower Than Projected $12.5B:Sousa

Article excerpt

Ontario deficit now at $10.9B: Sousa


TORONTO - A slump in oil prices, low interest rates and a weaker loonie may be hurting Alberta's economy, but Ontario's finance minister says they're giving his province some much-needed "breathing room" as it tackles a $10.9-billion deficit.

The revised deficit figure, announced Tuesday by Finance Minister Charles Sousa, is lower than the previously projected $12.5 billion, but critics and opposition leaders remain skeptical about the Liberal government's ability to balance the books in two years, as promised.

It's estimated that Ontario's economy will grow by 2.7 per cent next year, Sousa said, positioning the province "as an island of economic calm in a turbulent world."

While the drop in oil prices has affected Ontario companies that service refineries, the province is an importer of oil and lower oil prices have meant lower costs for businesses and manufacturers, Sousa said.

"Lower oil prices, lower interest rates and a lower dollar are together giving us some welcome breathing room," Sousa said Tuesday in a speech to the Toronto Region Board of Trade, though he cautioned it may only be temporary.

In Alberta, the budget tabled last week increases taxes and fees across the board and runs the largest deficit in the province's history at $5 billion. Premier Jim Prentice has billed the document as necessary to make up for billions in lost oil revenue and to insulate the province's day-to-day spending from roller-coaster swings in energy prices.

Sousa said the date for Ontario's budget will be announced "in the coming days." Despite the questions raised by various analysts, credit rating agencies and opposition parties about whether the government can eliminate the deficit by 2017-18, Sousa insisted it can be achieved.

The $10.9-billion deficit is a slight uptick from last year's $10.5 billion. That trend is going in the wrong direction, the opposition parties say.

The path to balance is through finding savings in government programs, managing compensation costs and "maintaining" revenue, Sousa said.

The government is reviewing its program spending, which Sousa said is projected to save $1. …

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