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Ontario budget: OLG expected to see $2.1B drop in revenue, cannabis sales jump

Click to play video 'Queen’s Park unveils new Ontario budget amid pandemic' Queen’s Park unveils new Ontario budget amid pandemic
WATCH ABOVE: The Ontario government will spend a record $187 billion this year. The government unveiled a budget on Thursday with billions aimed at responding to the coronavirus pandemic. Travis Dhanraj reports. – Nov 5, 2020

As the provincial government wrestles with a $38.5-billion deficit in its budget, the Ontario Lottery and Gaming Corporation (OLG) is forecast to see a major drop in revenue.

According to revenue projections published by the Ontario government on Thursday, OLG is forecast to only make $200 million in revenue by the end of the 2020-2021 fiscal year.

The projection is a far cry from the corporation’s three-year high in 2019 and 2020 when it made $2.3 billion in gambling revenue, funds that support provincial government program spending.

Read more: Gateway Casinos to reopen select Ontario locations

As the Ontario government imposed strict public health-related measures in response to the coronavirus pandemic, all casinos across the province were shut down. Officials said a “significant portion” of revenue comes from casinos.

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Even as a large geographic portion of the province moved to stage three of Ontario’s reopening, a cap of 50 customers in casinos also impacted the ability to collect revenue.

The government is set to spend a record $187 billion with $30 billion specifically in pandemic-related spending. The budget laid out three different scenarios that could see the province’s deficit levels change in the coming years depending on how long the pandemic lasts.

Read more: Ontario cannabis regulator promises to double monthly store approvals this fall

Currently, it is forecasting lower deficits of $33.1 billion in 2021-2022 and $28.2 billion in 2022-2023 if economic growth progresses at a moderate rate. The fiscal plan does not lay out a path to balance, with the government saying that will come in the 2021 budget.

However, there was a bit of good news on the financial front. The provincially owned Ontario Cannabis Store (OCS) is expected to see $80 million in revenue in 2020 and 2021, a sharp increase for the newer corporation. In the 2019-2020 fiscal year, it received $19 million in revenue.

According to government projections, OCS will bring in $170 million in revenue in 2021 and 2022. The increase was attributed to the expansion of cannabis stores across Ontario.

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