Ontario projects 2015-2016 deficit will be $7.5 billion, $1 billion under estimate

TORONTO – Ontario is projecting that its deficit for next year will be $7.5 billion, as the Liberal government maintains it can eliminate the deficit by 2017-18.

But the news in the fall economic statement also came with a lower growth forecast. In the spring budget the government projected the province’s real GDP would increase by 2.7 per cent in 2015 and 2.4 per cent in 2016.

Now, the government says real GDP growth is forecast to be 1.9 per cent in 2015 and 2.2 per cent in 2016.

The deficit currently sits at $10.3 billion and in the spring budget the government predicted the 2015-16 deficit would be $8.5 billion.

The government says non-tax revenue is projected to be about $1.1 billion higher than in the budget, helped in part by net revenue from the recent Hydro One initial public offering. The utility’s initial public offering saw $1.83 billion raised.

Progressive Conservative critic Vic Fedeli says that’s evidence of what he has been saying all along, that the Liberal government would use revenue from the Hydro One partial sale to pay down its deficit and not put it to infrastructure, as the Liberals have insisted.

Interest on debt is also now forecast to be $140 million below the estimate in the budget because of low interest rates.

The province’s net debt is still projected to nearly hit $300 billion by March 31, 2016, though the current projection is now slightly lower than the estimate in the budget.

Finance Minister Charles Sousa also said the government will establish a committee to look at improving the representation of women on boards and in senior executive positions, as well as a committee on the sharing economy, encompassing ride-hailing services such as Uber.