Ontario treasurer says deficit down to $10.9B

Finance Minister Charles Sousa on Tuesday revised the 2014-15 deficit projection to $10.9 billion, down from the $12.5 billion he predicted last summer.

Thestar.com
March 31, 2015
By Robert Benzie and Richard J. Brennan

Ontario is hemorrhaging slightly less red ink than forecast.

Finance Minister Charles Sousa on Tuesday revised the 2014-15 deficit projection to $10.9 billion, down from the $12.5 billion he predicted last summer.

“We worked very hard and reduced that by $1.6 billion,” Sousa told about 400 people at a Toronto Region Board of Trade luncheon at the Hilton Hotel.

“We are on track to balance the budget by 2017-18. We are determined and disciplined to balance the books by 2017-18,” the treasurer said in a speech designed to publicize his upcoming budget.

“Our path to balance is being achieved by transforming government programs and finding savings, by managing our compensation costs because we’re all in this together and by maintaining the integrity of Ontario’s revenue,” he said.

The $10.9-billion deficit means the government spent $29,863,013 more each day than it took in last year. That figure is also $800 million higher than the $10.1 billion projected for 2014-15 in the 2013 budget.

Progressive Conservative finance critic Vic Fedeli said the province’s rate of spending is not sustainable.

“Experts continue to express skepticism about the Liberal government’s fiscal plan and more specifically their claims that they (the Grits) will balance by 2017-18,” Fedeli (Nipissing) told a Queen’s Park news conference Tuesday before Sousa’s speech.

“The Conference Board of Canada said Ontario can’t meet its pledge to balance the books ... without spending cuts or tax hikes,” Fedeli said, noting the Ontario Chamber of Commerce also predicted the province could reach a “state of crisis unless the province cuts spending.”

He pointed out internal government documents show the Liberal government still doesn’t have a detailed line by line numbers for the 2017-18 budgets.

“They are just left blank and this is supposed to show us how they balance the books. They show a made-up revenue number, they show a made up expense number but there is no line by line for either of them and they magically add to zero, a balanced budget in 2017-18,” he said.

New Democrat MPP Catherine Fife (Kitchener-Waterloo) warned the Liberals are making cuts to health care and education while pursuing an “aggressive privatization agenda.”

“This government is moving forward with a very shortsighted plan to privatize hydro, which is only going to cost people more money,” said Fife.

As previously disclosed by the Star, the Liberals are looking at selling off up to 60 per cent of the provincially owned Hydro One utility.

The transmitter is worth about $16 billion so the windfall could bring in $10 billion to bankroll public transit.

Sources say the Grits will keep a 40 per cent share of Hydro One and limit ownership to other shareholders to 10 per cent apiece.

Canada’s big banks, public pension funds, and major foreign firms - including the U.S. holding company, Berkshire Hathaway - have expressed interest.

An initial public offering would allow Ontario residents to buy shares in a newly privatized company that owns 97 per cent of the provincial transmission grid.

The government maintains that ratepayers would be protected against massive hikes because the Ontario Energy Board regulates the price of electricity.

Ed Clark, the former TD Bank chair in charge of monetizing government assets, has recommended the sale of parts of two of Hydro One’s four subsidiaries - Hydro One Brampton and Hydro One Networks’ distribution operations.

Any proceeds would go toward Premier Kathleen Wynne’s $29-billion, decade-long transit and transportation infrastructure improvement plan.

Clark is also looking at changes to Ontario’s alcohol distribution system.

The Star first reported that Sousa’s budget is expected to announce that beer and wine sales will be allowed in about 300 of Ontario’s 1,500 supermarkets.

Retail licences will be auctioned off with no one supermarket chain allowed to purchase more than a quarter of them.

While the government will keep the Liquor Control Board of Ontario, the privately owned Beer Store, Wine Rack, and Wine Shop chains are in for changes.