2010 Ontario Budget: Chapter II: Ontario’s Economic Outlook and Fiscal Plan
Section A: Overview

HIGHLIGHTS

Ontario’s Economy

  • Government-projected 2010 real GDP growth — 2.7 per cent.
  • Projected 2010 real GDP growth, private-sector average — 3.0 per cent.
  • Government and private-sector average projected 2011 real GDP growth — 3.2 per cent.
  • Net new jobs since May 2009 — 91,700.
  • Net new jobs since October 2003 — 331,700.
  • Projected net new jobs in 2010–13 — 504,000.

Ontario’s Finances

  • 2009–10 interim deficit — $21.3 billion, down from $24.7 billion forecast in the Fall 2009 Ontario Economic Outlook and Fiscal Review.
  • 2010–11 deficit projection — $19.7 billion, down from $21.1 billion forecast in the Fall 2009 Ontario Economic Outlook and Fiscal Review.
  • The government has a responsible plan to cut the deficit in half in five years and eliminate it in eight years.

Improved Transparency in Financial Reporting

  • Starting with this Budget, changes have been made in how certain revenues and expenses are presented, in order to improve the transparency of financial reporting. These changes do not affect the province’s annual surplus or deficit result, the accumulated deficit or the underlying levels of revenue and expense.

Section A: Overview

Table 1
2010 Budget — Numbers at a Glance
Ontario's Economy: Provincial Finances:
Projected Real GDP Growth, 2010 2.7% 2010–11 Deficit Projection $19.7 billion
Avg. Private-Sector Growth, 2010 3.0% 2010–11 Revenue Plan $106.9 billion
Projected Real GDP Growth, 2011 3.2% 2010–11 Expense Plan $125.9 billion
Jobs since May 2009 91,700 2010–11 Reserve $0.7 billion
Jobs since October 2003 331,700 Accumulated Deficit-to-GDP Ratio (2003–04) 25.2%
Real GDP (2009 above 2003) 6.2% Accumulated Deficit-to-GDP Ratio (2009–10) 23.7%
Real Disposable Income (2009 above 2003) 18.8%    

Over the past year, Ontario’s economy has been hit hard by the global economic downturn — including a recession in the United States, heightened financial market turmoil, and a contraction in the manufacturing sector. To help lessen the burden of the recession on Ontario’s families and businesses, the government took decisive measures and made responsible choices. These necessary investments have contributed to a projected deficit of $21.3 billion for 2009–10.

The government has been quick to act on the fiscal challenge that faces Ontario. Building on its track record, the government has introduced measures to achieve significant fiscal savings — both this year and over the medium term — that have allowed the government to achieve lower deficit projections than were published in the Fall 2009 Ontario Economic Outlook and Fiscal Review.

Bar Graph: Ontario’s Medium-Term Fiscal Plan

There are now clear signs that the Ontario economy has stabilized and that recovery is taking shape. Growth is expected to strengthen due to improving global demand, significant government actions to support jobs and the economy, and government policies to promote long-term competitiveness and growth.

Ontario has established a strong foundation for future prosperity through its tax plan for jobs and growth and by making major investments in key public services and infrastructure. As the government’s stimulus is wound down and economic growth takes hold, Ontario will continue to build on that foundation with its five-year Open Ontario plan and by modernizing government operations. These measures will allow it to hold program expense growth to a rate less than the growth in revenue and cut the deficit in half within five years. As a result, the Province is projecting diminishing deficits of $19.7 billion in 2010–11, $17.3 billion in 2011–12 and $15.9 billion in 2012–13, with a balanced budget by 2017–18.