Ontario deficit lower than projection

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 thirdquarter finances Tuesday and said Ontario’s real GDP grew by 0.7 per cent, led by business exports, consumer spending and real estate investments.

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. ”

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.

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.