Huge deficits loom for Ontario
By Geoffrey Balin, The Brock Press (Brock University)
Issue date: 11/10/09 Section: News
ST. CATHARINES (CUP) - The Ontario government is expected to record a deficit of nearly $25 billion this fiscal year as a result of increased spending and declining tax revenues.
Finance Minister Dwight Duncan told the Ontario legislature the 48.1 per cent fall in corporate tax revenues in 2008-2009 is "unprecedented" and caused government income to slide by more than $6 billion.
The deficit was originally predicted to be $14.1 billion in March, when the government estimated that the province could return to balanced budgets by 2015 - a claim which it has since withdrawn.
The announcement was part of the Ontario Economic Outlook and Fiscal Review, which was released at Queen's Park on Oct. 22. Duncan said that the large deficit would result in a review of the province's spending habits which will come together as an action plan that is expected to be introduced to the legislature in March of 2010.
"We will change how we do business in this province," Duncan told the legislature. "We are becoming an even leaner and even more efficient provider of quality public services."
Falling tax revenues were not the only cause of the deficit - the province is spending more as well. Ontario provided $4 billion to automakers in the province as assistance to help them survive the recession and is also spending about $650 million this year to prepare for the H1N1 flu.
According to Duncan, these expenditures, as well as other increases to spending on items such as infrastructure and skills training, will "ensure that we are ready for growth."
Duncan did not elaborate on what he believes might occur as a result of the spending review although there is speculation that selling crown assets or a freeze on the wages of employees hired by the government may be at the top of the list.
"We haven't even begun to look at the choices we might make," he said. "What we have said is, when we're through this [spending review], we'll have to look at restraint."
Finance Minister Dwight Duncan told the Ontario legislature the 48.1 per cent fall in corporate tax revenues in 2008-2009 is "unprecedented" and caused government income to slide by more than $6 billion.
The deficit was originally predicted to be $14.1 billion in March, when the government estimated that the province could return to balanced budgets by 2015 - a claim which it has since withdrawn.
The announcement was part of the Ontario Economic Outlook and Fiscal Review, which was released at Queen's Park on Oct. 22. Duncan said that the large deficit would result in a review of the province's spending habits which will come together as an action plan that is expected to be introduced to the legislature in March of 2010.
"We will change how we do business in this province," Duncan told the legislature. "We are becoming an even leaner and even more efficient provider of quality public services."
Falling tax revenues were not the only cause of the deficit - the province is spending more as well. Ontario provided $4 billion to automakers in the province as assistance to help them survive the recession and is also spending about $650 million this year to prepare for the H1N1 flu.
According to Duncan, these expenditures, as well as other increases to spending on items such as infrastructure and skills training, will "ensure that we are ready for growth."
Duncan did not elaborate on what he believes might occur as a result of the spending review although there is speculation that selling crown assets or a freeze on the wages of employees hired by the government may be at the top of the list.
"We haven't even begun to look at the choices we might make," he said. "What we have said is, when we're through this [spending review], we'll have to look at restraint."
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posted 11/26/09 @ 8:41 PM EST
It is very informative article.
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