Ontario is on track to balance the budget in 2017–18. While the Province continues to invest in the key public services families rely on, Ontario is making progress on its plan to eliminate the deficit by:
- Investing in economic growth;
- Transforming government and responsibly managing spending; and
- Addressing the underground economy to ensure businesses pay their fair share of taxes.
The Province continues to beat its fiscal targets and is on track to do this for the seventh year in a row. For 2015–16, the deficit is forecast to be $5.7 billion, which is $2.8 billion lower than projected in the 2015 Budget and represents a $4.6 billion improvement compared to the 2014–15 deficit. This is the largest year-over-year reduction in the deficit in the last five years.
Some key fiscal changes to projections for 2015–16 include:
- Total revenue is projected to be $2.2 billion above the 2015 Budget forecast, due to higher asset optimization and tax revenue, as well as stronger overall performance from Government Business Enterprises.
- Total expense is projected to be $0.2 billion higher than the forecast in the 2015 Budget.
- Program expense is projected to be $0.4 billion higher than in the 2015 Budget, while consistent with the forecast in the 2015 Ontario Economic Outlook and Fiscal Review. This increase is primarily due to the Green Investment Fund, a $325 million down payment targeted at reducing greenhouse gas emissions while strengthening the economy and creating jobs.
Looking forward, the government is projecting a deficit of $4.3 billion in 2016–17, and balanced budgets in 2017–18 and 2018–19.
- The 2016–17 deficit reflects an improvement of $0.5 billion compared to the forecast in the 2015 Budget.
A key indication of fiscal sustainability is the Province’s management of its debt. Net debt-to-GDP is expected to peak at 39.6 per cent in 2015–16, remain level in 2016–17 and begin to decline in 2017–18.
Ontario’s plan to balance the budget is achieving results:
- Ontario remains the province with the lowest per-capita program spending in Canada.
- Program spending has fallen to 16.4 per cent of GDP in 2014–15, lower than the 17.9 per cent of GDP in 2009–10, and it is expected to fall to 15.0 per cent by 2018–19.
- By implementing initiatives that ensure everyone pays their fair share of taxes, Ontario has generated over $930 million to date — a $330 million increase over the amount reported in the 2015 Budget.
Ontario’s Plan to Eliminate the Deficit
Ontario’s Plan to Eliminate the Deficit: This bar chart compares Ontario’s deficit forecast to its performance from 2009–10 to 2018 –19. It shows that Ontario has beaten its deficit targets every year from 2009–10 to 2014–15. Looking forward, the 2015–16 deficit is projected to be $5.7 billion, a $2.8 billion improvement compared to the $8.5 billion deficit forecasted in the 2015 Budget. In 2016–17, Ontario’s deficit is projected to be $4.3 billion, a $0.5 billion improvement compared to the $4.8 billion deficit forecasted in the 2015 Budget. Ontario is projected to balance its budget in both 2017–18 and 2018–19.
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Net Debt-to-GDP and Accumulated Deficit-to-GDP
The net debt-to-GDP ratio is forecast to peak at 39.6 per cent in 2015–16. The accumulated deficit-to-GDP is projected to be 25.9 per cent as of March 31, 2016.
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