McGuinty warns of multi-year deficits in Ontario

Premier Dalton McGuinty is warning of multi-year deficits for Ontario, starting with a "significant" shortfall this year.

While he wouldn't confirm estimates that the deficit would come in at about $5 billion, McGuinty told the Canadian Press that conclusions could be drawn based on the numbers that are already out there.

The governing Liberals forecast a $500-million deficit in their fall economic update, but have since hinted that the figure may turn out to be much larger.

McGuinty has committed to matching federal dollars for infrastructure projects in the province and providing $1.3 billion to bail out troubled automakers.

McGuinty also acknowledged that his five-point economic plan may not be enough and that he'll have to "drill deeper" to get the province back on track.

The premier says the economy won't come back as strong unless fundamental changes are made, such as increasing business investment and having more workers with post-secondary education.

McGuinty also said Ontario residents won't be getting a break on the province's controversial health tax even though the province is getting a boost from the federal budget.

The premier says he can't eliminate or reduce the tax at a time of depleting government revenues and that the province's aging population and rising health-care expenses mean the government needs every penny of its current revenue to cope with the stress on the system. Receiving an additional $878 million in federal health-care funding in last week's budget won't change that.

In 2004, McGuinty came under heavy fire from his political rivals early in his first term when he brought in the so-called health premium despite promising during the election not to raise taxes.

He defended it as a necessary evil aimed at tackling a $5.6-billion deficit inherited by the previous Conservative government.