Advertisement

Ontario won’t be able to eliminate deficit in 2017, watchdog says

Ontario Finance Minister Charles Sousa speaks to the media prior to a pre-budget consultation session in Toronto on Friday, January 23, 2015.
Ontario Finance Minister Charles Sousa speaks to the media prior to a pre-budget consultation session in Toronto on Friday, January 23, 2015. THE CANADIAN PRESS/Frank Gunn

TORONTO – Ontario’s budget watchdog says that the province’s deficit will be $2.6 billion in 2017-18, despite a Liberal government pledge to balance the books by then.

The Financial Accountability Office released its economic and fiscal outlook today, saying that beyond that fiscal year the deficit will deteriorate further to $3.7 billion in 2020-21.

READ MORE: Accounting dispute between Ontario and auditor general may not end with external review

One of the changes since the office’s spring outlook, which predicted a smaller deficit of $600 million in 2017-18, was a new accounting treatment for government pension plans that added $1.5 billion to the deficit this past fiscal year.

The FAO says since the spring, higher tax revenues were reported for the last fiscal year, but there were also new government spending commitments and a more moderate outlook for economic growth.

Story continues below advertisement

READ MORE: Ontario premier says strong growth will allow province to eliminate deficit in 2017

The FAO says in its report that if the government wants to balance the budget it will either have to raise revenue or reduce expenses.

It also projects Ontario’s net debt will rise by $64 billion over the next five years to $370 billion in 2020-21.