Opposition MPPs slam Ontario Liberals on deficit

Ontario may find itself in the red longer than expected and face more program cuts if the province's deficit projections keep ballooning, opposition critics said Monday.

Progressive Conservative Leader Tim Hudak warned of more dismal numbers ahead after the government said Friday that the 2008-09 deficit figure had grown to $6.4 billion from a projected $3.9-billion shortfall last spring and balanced numbers that had been promised in the 2008 budget.

"People simply no longer believe Premier [Dalton] McGuinty's numbers, and they don't believe that we've hit bottom with the record $18.5-billion deficit," Hudak told the legislature Monday, referring to the projected deficit for 2009-10.

"Is Premier McGuinty going to plunge Ontario in $20- to $25-billion deficits?"

NDP Leader Andrea Horwath questioned upcoming public-service cuts, demanding to know which sectors would feel the pinch.

Finance Minister Dwight Duncan "made it pretty clear that we're looking at significant cuts in services, and what those [are] going to look like is what I'm worried about," Horwath said.

"The squeeze is coming — it's just that it's going to be on the backs of the everyday people of Ontario and I think that's wrong."

Timing of release criticized

Horwath also questioned the timing of releasing the updated figures.

"It's a bit too coincidental, I would say, that there was a byelection that happened to be taking place right around the time when this information was held back," she said, referring to the Sept. 17 contest for the Toronto riding of St. Paul's.

McGuinty was not in the legislature Monday, but Duncan dismissed criticism about any delays, saying the process wasn't any slower than other years.

Duncan declined to specify where the belt-tightening would be, but vowed to protect key services such as health care, education and the environment.

"To eliminate the deficit the key component …is on the expenditure side and managing our priorities in a way that we focus on those priorities and we always look for efficiencies," he said.

"We have to redouble our efforts to make sure we're able to provide the quality and quantity of public services that people demand."

'We need to be realistic'

Duncan wouldn't discuss any changes to his plan to return to balanced budgets by 2015-16, saying all that information will come in the fall economic statement.

"We've been the one government that said that this is going to take a long time," he said. "We need to be realistic about the time frame to get out."

TD Bank economist Derek Burleton said the higher deficit figure for 2008-09 could mean an increase to the $18.5 billion estimate for the current year.

"It does suggest a weaker starting point into this year but you're not talking about night and day here," Burleton said. "The deficit may come in higher than $18.5 billion but I don't expect to see a massive overshoot."

What the change suggests, he added, is that the province will "have more work to do going forward in bringing down their rate of spending growth … and if anything adds to the challenge of reining in the deficit over time."

Public accounts released Friday showed corporate tax revenues fell 48.1 per cent or $6.4 billion for the year ending March 31, 2009, while overall government revenues fell to $90.5 billion.

The global economic downturn led to a 0.5 per cent contraction in Ontario's real gross domestic product in 2008, a weaker-than-expected performance.