Peter Weltman, Ontario’s financial accountability officer, says the province recorded an actual deficit in 2018-19 of $7.4 billion.
Shortly after Premier Doug Ford was elected he claimed the province was strapped with a staggering $15-billion deficit because of the previous Liberal government’s reckless spending.
“It’s important for people to understand the official deficit was never $15 billion,” Weltman told Global News in an interview on Thursday.
The $7.4-billion figure confirmed the number Treasury Board President Peter Bethlenfalvy and Finance Minister Rod Phillips released in September along with the government’s public accounts.
New commentary released by Weltman’s office showed the deficit doubled from 2017-18 to 2018-19.
“The relatively sharp increase in the deficit was the result of modest revenue growth, combined with a relatively large increase in program spending,” his report stated.
“Policy decisions by both the current and previous governments contributed to the slow increase in revenues as well as the rise in spending last year.”
Weltman also admitted his office was wrong with projections of an $11.7-billion deficit at the time of the 2019 Ontario budget, a figure the government also claimed at the time.
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His report also found policy decisions have weakened revenue growth, including the cancellation of the cap and trade program.
“Cap and trade the auctions were supposed to bring in $1.7 billion last year. When the government cancelled the program, they cancelled the auctions — so effectively that revenue was gone. But the spending programs associated with the cap-and-trade program were not all cut so there was some residual spending but there was no offsetting revenue” said Weltman.
In November 2018, the PC government released the findings of an independent commission it tasked with looking into the previous Liberal government’s books. In a speech to the Economic Club of Canada, then-Finance Minister Vic Fedeli claimed, “The hole is deep and it will require everyone to make sacrifices without exception.”
On Thursday, interim Liberal Leader John Fraser accused the government of “fudging the numbers.”
“They’re playing with the numbers,” he said, claiming the PCs artificially inflated the deficit to justify deep cuts to social programs and services.
“You know budgets can expand depending on what numbers you plug in and my concern is I’m not worried about throwing blame around. What I’m worried about is those cuts that will happen because the government is creating that context.”
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Finance Minister Rod Phillips’s office said the government remains on track to reducing and eventually eliminating the deficit.
“Our government remains committed to our responsible path to balance, restoring trust in our province’s finances while at the same time making targeted investments in priority areas like health care and education,” spokesperson Emily Hogeveen wrote in a statement.
Meanwhile, Weltman said on Thursday that the government needs to spend responsibly in order to eliminate the deficit.
“I think it’s something MPPs should consider and ask questions about as we are into a period of strong growth, why we’re still doubling the deficit? Why we are running these increasing deficits?” he said.
“The economy may carry on nicely for the next little while or it may not, and these are things that actually need to be taken into account when governments are planning their budgets.”
Phillips is set to update the public in November on the province’s books when he reveals details of the fall economic statement.
— With files from the Canadian Press
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