Ontario to reveal deficit size next week
Ontarians will learn the state of the province's finances next week when the Liberal government releases its fall economic update.
Finance Minister Dwight Duncan is expected to reveal the size of this year's provincial deficit next Thursday, according to a government release.
The government estimated in June the deficit would hit $18.5 billion, $4.4 billion higher than its March forecast. The government also revealed last month that corporate tax revenues had fallen by 48 per cent last year.
Government officials told CBC News the finance minister's statement next week will not announce major cuts to spending. If those are to come, they won't appear until the budget next spring, the officials said.
"The government's in a very tight position," Premier Dalton McGuinty said at the provincial legislature.
The premier has promised not to raise taxes and has pledged he will protect hospitals, and schools. Health care and education comprise the bulk of the province's spending.
Nelson Wiseman, a political scientist at the University of Toronto, said McGuinty has left himself little room to manoeuvre.
Politics could affect reaction
The government could get away with running a significant deficit because of the global economic crisis, said Wiseman. But it may have a harder time defending a large shortfall because of its political affiliation, he said.
"When you enter a fiscal crisis it generally benefits conservatives, because even though conservatives may spend money like drunken liberals, they're perceived by the public as better managers of the public purse," he said.
Duncan has also hinted a 2015 date to eliminate the deficit may have to pushed back. But he won't outline a plan to balance the books in next week's update.
The Bank of Montreal's deputy chief economist, Douglas Porter, said he is not too bothered by Ontario's finances.
"I'm not convinced it's necessarily appropriate for the government to balance its budget, especially when you have a growing population," he told CBC News.
The Ministry of Finance has predicted Ontario's GDP will contract by 2.5 per cent for 2009 before growing by 2.3 per cent the following year.