The deficit projection for the current fiscal year has improved by more than $400 million from the 2012 Budget forecast to $14.4 billion. The province remains on track to meet the 2012 Budget deficit targets in 2013-14 and 2014–15 and for the deficit to be eliminated by 2017–18.
Ontario is projecting growth in real gross domestic product (GDP) of 2.0 per cent in 2012, 1.9 per cent in 2013, 2.3 per cent in 2014 and 2.4 per cent in 2015.
As of September 2012, Ontario employment was 356,000 net new jobs above its recessionary low in June 2009. Ontario is expected to create nearly 350,000 net new jobs by 2015, reducing the unemployment rate to 6.8 per cent from a high of 9.4 per cent in June 2009.
The fiscal plan provides no funding for incremental compensation increases for new collective agreements. The government is currently consulting on draft legislation that proposes to freeze compensation for executives and managers across the Ontario Public Service, and the Broader Public Sector (BPS) who are eligible for performance pay. It also proposes to ensure future BPS collective agreements are consistent with the province’s goals to eliminate the deficit and protect jobs and public services. The proposed draft legislation would support avoiding increased spending in the BPS of $2.8 billion over three years and help to protect roughly 55,000 public sector jobs.
QUOTE
“Despite ongoing global economic uncertainty, Ontario is ahead of its targets for lowering the deficit for the fourth year in a row. We will work with anyone who is willing to work with us to meet the objectives of eliminating the deficit and protecting jobs and public services.”
— Dwight Duncan, Minister of Finance
QUICK FACTS
• The 2012–13 revenue projection of $113,019 million is $445 million above the 2012 Budget outlook, largely reflecting a higher estimated 2011–12 tax base. Consistent with the government’s continued effort toward managing the growth in expenses, total expense for 2012–13 has decreased by $3.7 million compared to the 2012 Budget plan.
• Robust business capital investment, a rebound in net trade and increased consumer spending will be key contributors to growth. Over the past two years, business investment spending on plant and equipment has risen by more than 22 per cent, or
$11.1 billion.
• In the 2011–2012 Public Accounts of Ontario, the government announced the deficit for 2011–12 was $13.0 billion, marking the third consecutive year in which the province has improved on its fiscal projections. This result is also 47 per cent lower than the 2009–10 deficit of $24.7 billion forecast in the fall of 2009, at the depth of the global recession.
• The government has brought together business, labour and public sector leaders to form the Jobs and Prosperity Council. Reporting to the Premier, and headed by RBC President and CEO Gordon Nixon, the council will explore additional opportunities in the next few months for a path to sustainable growth that will also help inform the 2013 Ontario Budget.
• The 2012 Budget extended the pay freeze for MPPs by a further two years — for a total of five years.
LEARN MORE
Read Ontario’s Mid-Year Update on Economic and Fiscal Performance for 2012–13.
Read the Ontario Economic Accounts — Second Quarter of 2012
Read a Long Term Plan for Public Sector Compensation.
Read the McGuinty government’s announcement on freezing salaries for Ontario Public Service Managers.
Read the 2012 Ontario Budget.
Read about the strong actions the McGuinty government took in the 2012 Budget to reduce the deficit further.
Read the
Addendum to the 2012 Ontario Budget: Report on Expense Management Measures.
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www.ontario.ca/finance-news
Disponible en français
New figures run Ontario’s debt up to $346 billion
There’s an old saying about the chickens coming home to roost that applies to this year’s provincial books.
A few days after the budget was tabled, two credit rating agencies issued warnings that the the government’s fiscal plans will hurt Ontario’s credit reputation in the long term. Moody’s Investor Service and DBRS – both independent agencies that assess risk tolerance associated with debt – issued the warning. If this were to happen, interest repayment costs would rise higher.
As recently as November, the Ontario government had indicated the economy was on track and the budget balanced. Now, on the eve of an election, we’re told the budget will run even higher in the red, and the deficit will continue until 2025.
It turns out this year’s deficit will be $11.7 billion, not the $6.7 billion reported, contributing to an Ontario total debt of $346 billion, not $325 billion.
Spending and taxes are both up, because of a suite of expensive proposals. Total government spending is up $9 billion from last year, totalling $158.5 billion this year.
While hard-working Ontarians are doing their best to make ends meet, we have a government budget focused on the coming election— regardless of cost. This year’s spending will come in at $11,167 for each one of us in the province.
I was first elected in 1995, and in my 23 years as a MPP, I have never seen a pre-election budget quite like this one. It would appear those in charge are working tirelessly for one thing, and one thing only: their re-election.
A $346 billion debt is foolhardy and unsustainable.
Every month the government spends more than $1 billion to service its debt. This year Ontarians will pay more than $12 billion interest. The budget for debt interest is more than any other ministry, with the exception of education, health and social services.
And just after the budget came down we heard this from Mississauga-Streetsville MPP Bob Delaney: “We have tripled (the debt) and we’re proud of it, because we can afford it. It’s the responsible thing to do. It’s the correct thing to do, it’s what people have asked us to do and I would do it again and I would do it proudly.
Such wildly extravagant spending has made Ontario the most indebted province or state on the planet. Not only will the $346 billion debt be piled on this generation, our grandchildren will be hard taxed to pay for it.
This year’s budget confirms government feels voters can be bought with their own money. But there is a big problem with such profligate spending promises – those in charge are writing cheques they know will bounce.
We already see the administration of massive tax hikes to pay for this spending spree. These tax hikes will hit 1.8 million hard working people and over 20,000 businesses. They are designed to raise $2 billion in new revenue over the next three years.
The people of Ontario have a choice: wasting billions on political self-interests, raising taxes, making life unaffordable and driving jobs out of Ontario, or respecting tax dollars, standing up for the little guy and gal, and making Ontario open for business again. Toby Barrett MPP Haldimand-Norfolk