Watchdog doubts books can be balanced
Ontario’s budget watchdog is questioning whether the Liberals can balance the books next year.

TheStar.com
Nov. 28, 2016
Robert Benzie

Ontario’s budget watchdog is questioning whether the Liberals can balance the books next year.

In a report Monday, the Financial Accountability Office said the government is relying “on optimistic assumptions for revenue growth and program spending restraint.”

The independent office is projecting a budget deficit of $5.2 billion this year and $2.6 billion in 2017-18.

That’s in contrast to the Nov. 14 fall economic statement that forecast a $4.3 billion shortfall in 2016-17 and the books balanced the next year.

“There is significant risk that the government may not be able to eliminate the deficit in 2017-18, nor maintain a balanced budget going forward,” the office warned.

“However, the government has a variety of tools that it could use to temporarily improve the budget balance in 2017-18. Beyond 2017-18, maintaining a balanced budget will likely require additional measures to raise revenues or reduce expenses,” it continued, referring to reserve funds and the sale of Hydro One.

The budget watchdog noted personal income tax and corporate tax revenues are “significantly higher than the FAO’s projection over the outlook, a result of stronger 2015 corporate tax assessments and a more optimistic forecast of corporate profit growth.”

Finance Minister Charles Sousa has maintained he will get Ontario back into the black in his next budget and keep the province in surplus past the June 2018 provincial election.