Ontario’s budget deficit drops to $1.9B
Finance Minister Charles Sousa says the deficit for 2016-17 is now projected to be $1.9 billion, the lowest it has been since before the worldwide economic meltdown nine years ago.

thestar.com
By Robert Benzie
Feb. 21, 2017

Ontario is finally stanching the bleeding of red ink.

The province’s books will be balanced this spring, and for the foreseeable future, insists Finance Minister Charles Sousa.

Sousa made that pronouncement after revealing Tuesday the deficit for 2016-17 is now projected to be $1.9 billion, the lowest it’s been since the worldwide economic meltdown nine years ago.

“We’re looking at a balanced budget in this coming budget . . . next year as well, and the year after that,” he told reporters.

The treasurer’s announcement came at MaRS, the medical-and-related sciences hub at the corner of College St. and University Ave., which recently repaid $290 million in provincial loans three years ahead of schedule.

“Our government is proud to have made strategic investments here and elsewhere, investments that are providing tremendous benefits to Ontarians and to Ontario’s economy,” said Sousa.

In last February’s budget, Sousa estimated the shortfall for this fiscal year would be $4.3 billion.

The $2.4 billion improvement is due to $1.04 billion in higher corporate tax revenues, $803 million in increased harmonized sales tax proceeds, an additional $728 million in personal income taxes collected, and $514 million more in land transfer taxes.

Other tax revenues were down $118 million and federal transfers were $176 million lower than anticipated.

Tuesday’s data includes $10.7 billion of taxpayer-funded pension surpluses as paper assets on the province’s bottom line.

That’s based on the findings of a government-appointed panel of independent pension experts headed by Tricia O’Malley, chair of the Canadian Actuarial Standards Oversight Council.

Two weeks ago, O’Malley disagreed with auditor general Bonnie Lysyk’s interpretation that government investments in the co-sponsored Ontario Public Service Employees’ Union Pension Plan and the Ontario Teachers’ Pension Plan should not be booked as assets.

That accounting change is worth around $1.5 billion to the province’s books.

Progressive Conservative MPP Vic Fedeli said the Liberals are painting a rosy picture in time for an election on June 7, 2018.

“It’s not too difficult to artificially balance the budget when you include the one-time sale of assets like Hydro One, the LCBO headquarters, the OPG headquarters,” said Fedeli, referring to downtown Toronto buildings housing the province’s liquor monopoly and Ontario Power Generation.

“They’ve also used $600 million of reserves and land transfer tax is up $500 million more than their estimates, so there are one-time events that are causing this.”