Newspaper article The Canadian Press

Ontario Financial Accountability Officer Warns of More Deficits, Increasing Debt

Newspaper article The Canadian Press

Ontario Financial Accountability Officer Warns of More Deficits, Increasing Debt

Article excerpt

Ontario financial officer warns of more deficits

--

TORONTO - Ontario's financial accountability officer says it's possible the Liberal government can balance the books by 2017-18 as promised, but only if the economy grows at a stronger pace than in the past five years.

In a report released Wednesday, Stephen LeClair predicted there would still be a $600-million shortfall in 2017-18, and said even if the Liberals do get to balance, the province would quickly be plunged back into annual deficits.

"Compared to a $130-billion provincial budget or a $750-billion economy, a deficit of $600 million is manageable given the flexibility built into the fiscal plan," he said.

"Maintaining balanced budgets in Ontario will be an ongoing challenge for the province as revenue growth remains moderate and spending pressures build."

There is too much uncertainty in the Liberal plan, warned LeClair, with a reliance on $1.9 billion a year from a new cap-and-trade plan, billions in new federal transfers and annual equalization payments of $1.3 billion to $1.6 billion.

Those equalization payments could be wiped out entirely if Ontario's fiscal performance remains above the national average, he warned.

"A fiscal plan should balance risks, but we see most of the risk tilted to the downside," said LeClair.

"In its determination to meet its fiscal target of a balanced budget in 2017-18, the government has built a fiscal plan that is heavily exposed to factors outside its control. There is little fiscal room to deal with unexpected events."

LeClair warned the government will have to increase spending because of demographic changes and higher service costs, and pointed out the province is relying on growth to exceed the average in recent years.

If growth maintains the same pace, LeClair said there would be a deficit of $1.4 billion in 2017-18, growing to $3.5 billion by 2020-021. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.