Ontario deficit set to hit almost $12 billion in 2018
Financial Accountability Office’s figure nearly doubles government’s projection
A new report from the Financial Accountability Office shows that Ontario’s budget deficit is actually $11.8 billion instead of the $6.7-billion figure reported by the provincial Liberals. Ontario’s fiscal watchdog says the province’s deficit will jump to almost $12 billion this year as a result of higher spending in the Liberal government’s 2018 budget and weak revenue gains.
The FAO also says the government’s spending plan will add about $70 billion to the province’s net debt, increasing it to almost $400 billion in 2020-21.
The findings come in the FAO’s Spring 2018 Economic Outlook, released Wednesday, just a week before the provincial election campaign kicks off. “Kathleen Wynne and the Liberals are untrustworthy. They will do, say or promise anything to cling to power,” Ontario PC finance critic Vic Fedeli said. “When it comes to a dispute between the financial accountability officer and the auditor general versus the Wynne Liberals, we will always side with the independent experts.”
The Liberal government’s spring budget had said the deficit for 2018 would be $6.7 billion, with the books expected to stay in the red for six years.
The FAO report warns that the plan to balance the budget by 2024 involves a dramatic cut in spending growth.
It says the government has provided few specifics about those spending cuts but says it would need to find $15 billion in reductions by 2025, or the equivalent of an eight per cent drop in program spending, to achieve its goal. J. David Wake, the temporary financial accountability officer, said the government’s plan “shifts the burden of stabilizing Ontario’s public finances from current taxpayers to younger Ontarians and leaves the province with less flexibility to respond to future crises, including recessions.”
The report echoes some of the findings from the auditor general, who said last week that the government had understated its deficit numbers in the 2018 budget, saying they were off by 75 per cent for 2018-19, with that jumping to 92 per cent for 2020-21. Bonnie Lysyk said the government has not accurately reflected the true cost of its borrowing plan to cut hydro rates by 25 per cent, and also raised questions about how the province accounts for revenues related to two teacher pension plans it includes on the books as assets. “Kathleen Wynne and the Liberals cooked the books. They aren’t telling the people of Ontario the whole story. They’re trying to bury the true costs of their scandal, waste and mismanagement,” added Fedeli.
“An Ontario PC government led by Doug Ford will respect the taxpayer. We will commission a full audit of the government’s books and will deliver responsibility, accountability, and trust back to Queen’s Park.”