Deficit hits $9.2 billion instead of projected $14.8 billion, but debt-to-GDP ratio is still more than 37 per cent
TORONTO—Ontario’s deficit dropped to $9.2 billion in 2012/13, due in part to one-time savings from labour contracts and spending cuts, Finance Minister Charles Sousa reported.
The province used a $1-billion reserve built into the budget to help cut the deficit from its April 2012 projection of $14.8 billion, while higher-than-expected revenues added $800 million to the improved figure.
Total Ontario government spending of $122.6 billion was $3.8 billion less than planned, and 0.1 per cent lower than in 2011-12, said Sousa, marking the first real decline in a decade of Liberal rule.
The Progressive Conservatives said Sousa confirmed their suspicion that the Liberals have no plan for Ontario’s economy.
“Only the Wynne Liberals would characterize Ontario’s whopping $9.2 billion deficit for 2012/13 as a success,” said PC finance critic Vic Fedeli.
The NDP said the Liberals have “played the game of finding surprise funds” for years and using unrealistic forecasts to make themselves look like good fiscal managers.
At $113.4 billion, revenues for 2012/2013 were $0.8 billion above forecast, due largely to higher-than-expected income from government business enterprises and a one-time gain in taxation revenues, according to the Public Accounts tabled by Sousa.
Most ministries and program areas, including health care, spent less than planned.
Sousa said part of the reduction in red ink came from one-time savings from new contracts negotiated with teachers and other public sector workers. He predicted the deficit for the current fiscal year will rise to $11.7 billion but said the province remains on track to balance its books by 2017-18.
Meantime the province’s overall debt continues to climb, jumping to $252 billion, or about 37.4 per cent of the province’s GDP, according to Sousa.
Ontario’s economy continued to expand modestly in 2012/13, with growth in real gross domestic product of 1.5 per cent, lower than the projected 1.7 per cent.
Solid gains in business investment and international exports as well as continued growth in household spending were the main contributors to growth in 2012.