2011 Ontario Budget: Chapter II: Ontario’s Economic Outlook and Fiscal Plan
Section A: Overview

Highlights

Ontario’s Economy

  • Government-projected 2011 real GDP growth — 2.4 per cent.
  • Private-sector average projected 2011 real GDP growth — 2.6 per cent.
  • Government-projected 2012 real GDP growth — 2.7 per cent.
  • Private-sector average projected 2012 real GDP growth — 2.8 per cent.
  • Net new jobs since May 2009 — 233,400.
  • Net new jobs since October 2003 — 452,000.
  • Projected net new jobs from 2010 to 2014 — 480,000.

Ontario’s Finances

  • 2010–11 deficit — $16.7 billion, $3.0 billion lower than forecast in the 2010 Budget.
  • 2010–11 deficit as a share of GDP is projected to be 2.7 per cent.
  • 2011–12 deficit — $16.3 billion, $1.0 billion lower than forecast in the 2010 Budget.
  • The government’s plan to reduce the deficit and balance the budget is working.

Section A: Overview

TABLE 1.     2011 Budget — Numbers at a Glance
Ontario's Economy: Provincial Finances:
Projected Real GDP Growth, 2011 2.4% 2011–12 Deficit Projection $16.3 billion
Avg. Private-Sector Growth, 2011 2.6% 2011–12 Revenue Plan $108.5 billion
Projected Real GDP Growth, 2012 2.7% 2011–12 Expense Plan $124.1 billion
Jobs since May 2009 233,400 2011–12 Reserve $0.7 billion
Jobs since October 2003 452,000 Accumulated Deficit-to-GDP Ratio (2003–04) 25.2%
Increase in Real GDP (2010 above 2003)1 8.1% Accumulated Deficit-to-GDP Ratio (2010–11) 24.1%
Increase in Real Disposable Income (2010 above 2003)1 22.1% Deficit-to-GDP Ratio (2010–11) 2.7%
1 2010 real GDP and real disposable income are Ontario Ministry of Finance estimates.

Since 2003, the government has improved education and health care, which had been neglected for too long. The government worked with Ontarians to deliver results in hospitals, schools and the electricity system, and did so while eliminating a $5.5 billion inherited deficit. In fact, until the global recession hit, Ontario’s financial performance was consistently strong.

The government has overachieved on its budget targets in five of the last seven fiscal years. It was only after the global recession hit, and the government took decisive actions to stimulate jobs and economic growth, that Ontario — like many jurisdictions around the world — experienced a deficit again.

Key indicators, such as real gross domestic product (GDP) and employment, are approaching pre-recession levels. The province has recovered 91 per cent of the jobs lost during the global downturn and the economy is poised for a period of sustained growth.

As the economy recovers and turns the corner, the Province is well positioned to tackle the deficit. The government’s responsible plan to balance the budget is working.

The deficit for 2010–11 is now projected to be $3.0 billion lower than outlined in the 2010 Budget, an improvement of about 32 per cent from the 2009–10 deficit of $24.7 billion forecast in the fall of 2009. Over the next two years, the government is on track to improve on its deficit projections by $1.7 billion, for a total cumulative improvement of $4.7 billion over three years.

Chart 1: Bar Graph: Ontario's Fiscal Performance

Beyond 2012–13, the government remains on track to meet the fiscal targets outlined in the 2010 Budget. This includes a $13.3 billion deficit in 2013–14, followed by steadily declining deficits and return to a balanced budget by 2017–18.