The budget includes $11.4 billion in interest on the province's debt, which is projected to hit a whopping $298.9 billion next year
TORONTO—Ontario’s path back into the black won’t include slashing and burning, as the Liberal government believes it can get rid of its $10.9-billion deficit with a scalpel rather than a hatchet.
The only new tax in the budget is a penny a beer bottle, as part of reforms to Ontario’s antiquated alcohol laws.
The $131.9-billion budget introduced today by Finance Minister Charles Sousa pledges to balance the books through a combination of targeted savings via mostly minor program cuts, and a dependence on steady economic growth.
Sousa says Ontario’s economy is expected to grow by 2.7 per cent this year, but he’s not relying solely on that to eliminate the deficit, saying it’s about controlling spending.
Ontario is forecasting that the deficit will drop to $8.5 billion in 2015-16, falling further to $4.8 billion in 2016-17 before returning to balance the following year.
Mike Moffatt, an economics professor at Ivey Business School, says this slow and steady approach of deficit elimination is “going to be difficult, but potentially manageable.”
Here are some highlights of the Ontario budget introduced by Finance Minister Charles Sousa April 23:
Ontario’s deficit will be reduced from $10.9 billion to $8.5 billion in 2015-16, falling to $4.8 billion in 2016-17 and return to balance by 2017-18.
The $131.9-billion budget includes $120.5 billion in program spending plus $11.4 billion in interest on the province’s debt, which is projected to hit $298.9 billion next year.
$11.9 billion in 2015-16 for infrastructure projects such as highway improvements in northern Ontario and rapid transit—part of a $130-billion, 10-year plan announced in last year’s budget.
An additional $200 million for a 10-year jobs fund announced last year, with a total of $2.7 billion for the program that provides corporate grants in return for jobs.
Insurance companies will be required to give drivers a discount for using winter tires on their vehicles. However, the standard duration of medical and rehabilitation benefits will be reduced from 10 years to five years for all claimants except children.
$9 billion expected to be raised from the sale of 60 per cent of Hydro One, the giant electricity transmission utility, $4 billion of which will be devoted to public transit.
$100 million a year will be raised with a new tax on all beer sold in Ontario as part of modernization plan that will allow some grocery stores to sell six-packs of beer.
$50.8 billion for health care, the single largest government expenditure, which is projected to grow an average of 1.9 per cent a year over three years.
$25.2 billion for education, which will grow by two per cent a year, while funding for post-secondary education and training will hold steady at $7.8 billion.
All other areas will face average decreases of 5.5 per cent a year until the deficit is eliminated, but they represent only 16 per cent of government’s total program spending.