The Financial Accountability Office of Ontario (FAO) released its Fall 2018 Economic and Budget Outlook, which provides the latest economic forecast and an updated assessment of the Province’s fiscal outlook.
Peter Weltman, Ontario’s Financial Accountability Officer, says that “after four years of strong economic growth, Ontario’s budget deficit will more than triple this year to $12.3 billion. The 2018-19 deficit will be the largest since 2011-12, the result of a significant increase in program spending combined with a decline in overall revenue.”
The FAO projects that without further
If the government were to balance the budget over four years, without raising taxes, it would need to limit the growth in program spending to 1.2 per cent per year. This would represent the slowest growth in program spending over a four-year period since the mid-1990s and require the government to reduce spending by $850 per person or by eight per cent from today’s levels, by 2022.
Weltman emphasizes that balancing the budget will require significant changes to fiscal policy and that “Ontarians would benefit from an informed debate on the Province’s budget objectives and the trade-offs necessary to achieve them.”
Finance Minister Vic Fedeli said in a statement that the government looks forward to continuing to work with him to restore accountability and trust to Ontario’s books.
"As we have always said, and as the Financial Accountability Officer confirms, we have inherited a structural deficit from the previous Government. In fact, the Liberals were spending $40 million more every day, than they took in," explained Fedeli. "While we have already taken steps by finding more than $3.2 billion dollars in efficiencies and savings, we still have more work to do. The previous Government recklessly spent taxpayer dollars and we must continue to work towards finding efficiencies in order to return to balance in a responsible, pragmatic way.”
Click here for Fall 2018 EBO.
The government’s recent Fall Economic Statement did not provide a budget forecast beyond the current year.