Ontario deficit shrinks again as PCs put freeze on unplanned spending
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The Ontario deficit is projected to be $1-billion lower than forecast — $13.5 billion in 2018-19 — as the economy outperforms expectations, Finance Minister Vic Fedeli says.
The coming spring budget will lay out the timeline for when the government plans to balance the books as promised, Fedeli said Wednesday.
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Treasury Board President Peter Bethlenfalvy said the government has now placed a freeze on additional, unplanned spending by ministries to avoid last-minute splurges to use up any remaining room in their budgets, a practice referred to as March Madness.
Ministries will need to obtain Treasury Board approval before moving any funds out the door that are not due under contract or legislation or required to provide core services, he said.
“An example last year for the federal government was they bought 31,000 smartphones in March,” Bethlenfalvy said. “We’ve seen the previous (Ontario) government that they handed out grants to companies that didn’t apply.”
A report commissioned by the Doug Ford government had pegged the 2018-19 operating deficit — the amount the government spends more than it takes in each year — at $15 billion.
The government has twice announced that the deficit will not be as large as expected.
Ontario’s Third Quarter Finances released Wednesday show that while personal income tax revenue is down $700 million from earlier projections, revenue from sales taxes is up $1.3 billion and corporate taxes is up $600 million.
Land Transfer Tax revenues — a key indicator of the real estate market — are $300-million less than projected but overall tax revenue put an extra $996 million into government coffers to allow for the lower deficit figure.
Liberal MPP Mitzie Hunter accused the Tories of inflating the deficit numbers to justify an austerity agenda.
“Ontario’s economy is strong with record unemployment inherited from the previous government, Doug Ford shouldn’t be talking it down for political points,” Hunter said in a statement. “Let’s be clear, driving austerity by gutting education and social programs is not good for Ontario’s future prosperity.”
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