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Ontario government’s fiscal update shows deficit now down to $9B

Ontario Finance Minister Rod Phillips said Thursday that in the fall economic outlook they would be its own deficit projection by $1.3 billion and would invest that money into "critical public services."

TORONTO – Ontario’s Progressive Conservative government is reaching into its pockets for hundreds of millions of dollars to undo some of the damage caused by a year of cuts.

Where the spring budget – and last year’s fall economic statement – cut from wide swaths of programs and services, Wednesday’s document tells the story of a host of recent reversals. There is an additional $1.3 billion in spending, much of it to fund some backtracks on policy changes and cuts that caused the government major headaches.

It comes as the Progressive Conservative government is attempting to adopt a new tone following a tumultuous first year-and-a-half in power.

READ MORE: Ontario government’s fiscal update to focus on balancing the books

One of the changes that caused the most grief for the government was to the autism file. It didn’t involve a funding cut, but would have amounted to service cuts for thousands of children receiving treatment.

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The government is putting an additional $279 million into its autism program, boosting the overall budget to $600 million – a figure that has been promised for several months, but families had been skeptical.

An extra $310 million is also going to social services, including reversing the planned cancellation of a child benefit and not going ahead with changes to welfare and disability support earnings exemptions.

Municipalities had been angered when the government announced cuts to child care, public health and ambulance funding, and the fall economic statement shows that partial backtracks on those cuts are costing about $189 million.

Some of the new expenses that don’t come from policy reversals include $68 million for small and medium hospitals. Almost half of the total new spending comes from dipping into the contingency fund.

Ontario’s deficit is now expected to be $9 billion for this fiscal year, down from the $10.3-billion projection in the budget. That is still higher than the final figure for last year’s deficit of $7.4 billion, though there is a $1-billion reserve and there is still time for the government to beat its projections yet again.

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The government is proposing to reduce the small business corporate income tax rate from 3.5 per cent to 3.2 per cent on Jan. 1, which would cost $95 million when fully rolled out in 2021-22.

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People in the North could see cheaper groceries and travel costs, as the province looks to cut the aviation fuel tax rate in the North from 6.7 cents a litre to 2.7 cents a litre.