Ontario’s deficit projected to be $3-billion less than estimated, Duncan says
Adrian Morrow, The Globe and Mail, Published Tuesday, Jan. 22 2013, 12:30 PM EST, Last updated Tuesday, Jan. 22 2013, 2:15 PM EST, -- Source
Ontario’s deficit is projected to be nearly $3-billion less than estimated in last year’s budget, thanks to the elimination of a system that allowed teachers to bank and cash in sick days, and $1.1-billion in unexpected tax revenues, Finance Minister Dwight Duncan said Tuesday.
Mr. Duncan delivered the unusual winter fiscal update in a speech to the Canadian Club at a downtown Toronto hotel just days before Liberals meet to choose the province’s next premier. He pegged this year’s deficit at $11.9-billion, down from the $14.8-billion projected in the budget.
But he warned that the government will have a tough time ahead if it wants to meet its target of balancing the books by 2018, including making $2.5-billion in cuts every year, and finding a way to raise more money to expand transit in the rapidly-growing Toronto area.
“Frankly, what we’ve had to do to date is the low-hanging fruit,” he said.
He called on the province to take the same approach the federal government took in the budget-slashing 1990s, and borrowed its rhetoric.
Ontario’s debt payments are a “ticking time bomb” that must be reined in rather than passed down to the next generation, he said.
Mr. Duncan walked a fine line between fiscal hawk and socially-conscious Liberal: in order to afford improved social programs, such as helping people with disabilities, he said, the government had to pay down its deficit.
He also used the speech to heap praise on outgoing Premier Dalton McGuinty and tout the government’s achievements. The loudest applause of the speech came when he discussed the Green Energy Act and said that, for the first time, power generated from wind farms had surpassed that from coal-fired plants.
The speech is one of the last Mr. Duncan will make as finance minister: he will step down from cabinet after Liberals choose their new leader. If his close ally Sandra Pupatello wins the top job, he has also made clear he will step aside so she can run for his seat in a by-election.