TORONTO—Higher sales and corporate income tax revenues have pushed Ontario's deficit down $1 billion, the Progressive Conservative government said yesterday as it released its third-quarter finances.
That means the deficit for 2018-19, according to the Tories, is projected to be $13.5 billion.
Revenue for this fiscal year is projected to be $149.2 billion, which is $1 billion higher than forecasted in the fall economic statement, due to higher HST and corporate income tax revenue.
“We've seen growth at 2.4 percent [in 2018], where we all forecast growth at two percent, so we know that our plan is working,” said Finance minister Vic Fedeli.
“We've laid down the foundation now for the businesses to begin hiring, and they've begun hiring and we see stronger revenue.”
The Tory government is trying to trim a deficit they pegged at $14.5 billion when they took office last year—though the financial accountability officer has said it was closer to $12 billion.
Opposition politicians have accused the Tories of inflating the deficit so it can justify cuts to programs and services.
Fedeli said the next budget—date to be announced—will show a path to balance, though he wouldn't specify if the government will eliminate the deficit within its four-year mandate.
“I like to use my 'Goldilocks' reference to balancing the budget," he remarked. ”It won't be too soon because quite frankly nobody would believe it. It won't be too long because anybody can do that.
“It will be just right.”
In the meantime, Treasury Board president Peter Bethlenfalvy said he has directed ministries to limit spending until fiscal year end of March 31.
“We are taking steps to curb the kind of new spending that governments sometimes see towards the end of their fiscal years—what we call 'March Madness,'” he noted.
The higher HST and corporate income tax revenues partially were offset by lower personal income tax and health premium revenues, as well as less land transfer tax revenue due to lower-than-expected housing resales.
In addition, fees and licences revenue was $1 million lower because the government didn't proceed with fishing and hunting licence fee increases that were set to take effect Jan. 1.
The 2018-19 expense outlook is $4 million higher than in the fall economic statement—to $161.8 billion—due to more funding to fight guns and gangs, money which came from federal transfers.
The government also spent $208 million more than planned on the Ontario Student Assistance Program, which it recently reformed.
The system now will focus more on loans than grants, a greater proportion will go to lower-income students, and the maximum family income under which a student could receive some financial aid was reduced.