Ontario deficit to triple this year

Ontario’s financial watchdog is sounding the alarm over the province’s finances, saying the deficit is three times larger than last year. The financial accountability officer is warning the government that if policy changes aren’t made Ontario’s fiscal position will continue to deteriorate.

This is the largest deficit since 2011, due to an increase in spending and a decline in overall revenue.

“Today our accumulated debt stands at around $330 billion. It’s a lot of money that we owe. So then you would add another 12 billion on top of that and that’s when you start to get worried and say how much debt can this province comfortably carry? This is the concern people should have.” Marvin Ryder, DeGroote school of business.

The financial watchdog says there must be a trade off, something needs to give in order to balance the books and without raising taxes, the Ford government would need to limit the growth in spending to 1.2% each year. That would make it the slowest growth in spending since the mid 90’s.

That wouldn’t come as a surprise to local NDP Sandy Shaw,
“I see everything not only from the numbers but the dialogue in the house is that they are signalling that there will be cuts to programs.”

What’s not included in the report making the situation more dire, the loss of $1.9 billion in cap-and-trade proceeds and another $500 million in revenue from the province’s new income tax cut for people earning less than $30 thousand a year.

The watchdog’s report is actually $1.2 billion less than the government claims it to be. The opposition voicing their concerns saying that the misleading figures are softening up the province for cuts to come.

Finance minister Vic Fedeli says the report shows the government inherited the deficit from the Liberals but he did not give any indication of how it would eliminate the red ink.

More details are expected in March when the PC’s release the budget.