Rev­enue, re­serve cash trim On­tario deficit to $1.9 bil­lion

No one lends any cre­dence to the govern­ment “beat­ing” its own pro­jec­tions, says NDP leader An­drea Hor­wath

The Hamilton Spectator - - CANADA & WORLD - AL­LI­SON JONES

TORONTO — On­tario’s deficit for this fis­cal year is down to $1.9 bil­lion, due in part to higher tax rev­enues, a hot hous­ing market and the use of the prov­ince’s re­serve.

The govern­ment had pro­jected $4.3 bil­lion in last year’s bud­get, and the lower deficit puts the govern­ment closer to pre­sent­ing a bal­anced bud­get this spring.

Fi­nance Min­is­ter Charles Sousa re­leased the prov­ince’s third-quar­ter fi­nances Tues­day and said On­tario’s real GDP grew by 0.7 per cent, led by busi­ness ex­ports, con­sumer spend­ing and real es­tate in­vest­ments.

“Over­all, th­ese pos­i­tive eco­nomic fac­tors — more busi­nesses suc­ceed­ing, more peo­ple work­ing, con­sumer con­fi­dence im­prov­ing and ex­ports ris­ing, have had a pos­i­tive ef­fect on On­tario’s fi­nances ahead of plan,” he said.

On­tario projects real GDP growth of 2.2 per cent in 2017, but said ris­ing in­ter­est rates could weaken eco­nomic ac­tiv­ity.

NDP Leader An­drea Hor­wath said no one lends any cre­dence to the govern­ment “beat­ing” its own deficit pro­jec­tions.

“Ev­ery­body knows that the Lib­er­als in­flate their deficit tar­get,” she said. “Then, when they get to the point where they have to make their an­nounce­ment, lo and be­hold, they’ve achieved more than they said they were go­ing to. So it’s a silly shell game.”

The fi­nances show the govern­ment also used $600 mil­lion of the pre­vi­ously $1-bil­lion re­serve.

Pro­gres­sive Con­ser­va­tive critic Vic Fedeli said the use of the re­serve and one-time rev­enue from as­set sales such as shares of Hy­dro One won’t mean truly elim­i­nat­ing the deficit.

A govern­ment spokesper­son noted that the govern­ment builds the re­serve into its plan and it has main­tained 40 per cent of it, un­changed from what was re­ported in 2016.

Ex­penses in­creased by $1.1 bil­lion, spend­ing that in­cludes $106 mil­lion more to fund the On­tario Drug Ben­e­fit, nearly $100 mil­lion for ad­di­tional stem cell transplant ca­pac­ity, and $300 mil­lion so far to­ward an eight-per-cent re­bate on elec­tric­ity bills.

Rev­enue was $2.5 bil­lion higher than pro­jected, with an ex­tra $1 bil­lion com­ing from cor­po­rate taxes, an­other $800 mil­lion from sales tax — largely due to house sales, which boosted HST rev­enue — about $730 mil­lion more from per­sonal in­come and health tax, and more than $500 mil­lion above the 2016 bud­get pro­jec­tion from the land trans­fer tax.

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