Finance minister to table pre-election budget that returns Ontario to deficit

Charles Sousa will propose the fiscal plan on March 28, and the deficit could be almost $8 billion in 2018-19.

Thestar.com
March 7, 2018
By Robert Benzie

Finance Minister Charles Sousa will table a pre-election budget on March 28 that puts Ontario back into the red.

"We are choosing to put our strengthened fiscal position to work, to address our priorities, your priorities — and, as a result, we will be running a deficit, starting next year," Sousa told an Economic Club of Canada luncheon Wednesday.

The treasurer said the shortfall would be "less than 1 per cent of GDP," but declined to be more specific.

Given that Ontario's gross domestic product was $794 billion in 2016, that suggests a deficit that could be almost $8 billion in 2018-19.

"We are making a choice. We are committing to more support for social and developmental services, more supports for mental health and healthcare programs, more supports for students," said Sousa.

"And make no mistake: our budget will have a clear plan to track back to balance. But let's be clear: we are making this choice deliberately."

Sousa's surprise return to deficit budgets comes three months before the June 7 election, in which the opposition Progressive Conservative, under former leader Patrick Brown, said they would be running a $2.8 billion shortfall.

It also comes after the Liberal got things back in the black last year and promised surpluses for the foreseeable future.

Tory MPP Lisa MacLeod said the deficit U-turn proves the budget is "nothing more than a costly re-election ploy" full of expensive voter-friendly goodies.

"After promising a balanced budget for years to come, the ... Liberals are already changing their tune and plunging the province back into deficit. They can't be trusted to keep their word," said MacLeod (Nepean-Carleton).

"This is a government that has no real beliefs other than their own political self-interest," she said.

NDP MPP John Vanthof, whose party has yet to say whether it will run a deficit, noted hospitals are overcrowded and services are inadequate thanks to an "old, tired government" that has been in power since 2003.

Vanthof said only the New Democrats can deliver change in the spring campaign.

"We've got a tired government on one side and the loyal official opposition are a trainwreck," he said, referring to the Tories' problems since Brown resigned in scandal Jan. 25.

"Everybody's looking at the trainwreck. Once they are picking up the remnants and people see what the options are, they'll realize they do have a real option for change — and that's us."

Sousa acknowledged it was a difficult decision to return to borrowing money to finance programs.

"Even though I have fought long and hard to slay the deficit and balance the books — and I appreciate those concerns - but I will not leave people behind," he said.

"I announced last year that we eliminated the deficit entirely and I am pleased to report that we now have a surplus in this fiscal year."

With the Tories electing a new leader Saturday - former MPP Christine Elliott, ex-city councillor Doug Ford, rookie PC candidate Caroline Mulroney, and social conservative activist Tanya Granic Allen are vying for the crown - Sousa also took a shot at the Liberals' main rivals for opposing carbon pricing.

"The Conservatives are misguided in turning their backs on this cost-effective approach. It leaves them with no plan whatsoever to tackle climate change or seize investment opportunities," he said, referring to Ontario's "cap-and-trade" pact with Quebec and California, a deal the Tories plan to scrap.

"It leaves them with a gaping $16-billion hole in their fiscal plan. If you start cutting away to make up for the Conservative's $16-billion shortfall, it won't be fat you're sawing into; it will be bone."

Elliott, who is the favourite to win the Tory leadership, warned voters not to be fooled by Premier Kathleen Wynne's "empty campaign promises."

"As premier, I will go line by line through Ontario's books and audit Kathleen Wynne's mess."

While Ontario budgets are traditionally held on Thursday's, this year's spending plan will be tabled on a Wednesday because of Easter.