Ontario projects improving deficits, but cautions economic uncertainty

TORONTO — Ontario is projecting improving deficits over the next couple of years, despite an expected economic slowdown, nearly coming to balance in two years.

The province's fall economic outlook forecasts a deficit of $12.9 billion in this fiscal year, followed by $8.1 billion the following year and a deficit of just $700 million in 2024-25.

Government officials say a nearly $7-billion improvement in this year's deficit from the spring budget is largely due to higher nominal GDP and inflation.

However, with what Ministry of Finance officials call a high degree of economic uncertainty, they say under a faster economic growth scenario Ontario could see a $9.2-billion surplus in 2024-25, and under a slower growth scenario, the deficit that year could be $8.5 billion.

That wide range of possibilities comes not long after Finance Minister Peter Bethlenfalvy announced that the province ended the 2021-22 fiscal year with a $2.1-billion surplus, a far cry from the $33-billion deficit projected in the previous budget.

In addition to a measure announced Sunday that a 5.7-cent gas tax cut that took effect in July would be extended until the end of 2023, the mini budget also contains changes to allow Ontario Disability Support Program recipients to keep more of their earnings and doubling payments to low-income seniors.

The province also proposes to launch a voluntary clean energy credit registry for businesses and introduce small business tax changes.

This report by The Canadian Press was first published Nov. 14, 2022.

The Canadian Press