Building Ontario Up for Everyone: 2016 Ontario Economic Outlook and Fiscal Review banner

: Balanced Path to a Balanced Budget

BACKGROUNDER — November 14, 2016

The government’s balanced path to a balanced budget means choosing to make investments that help people in their everyday lives, while keeping an eye on the bottom line.

By managing government finances in a responsible and fiscally sound way, including taking a cautious approach to estimating pension expense, Ontario forecasts a balanced budget in 2017–18 and in 2018–19.

This balanced approach is the foundation for long-term fiscal sustainability and key programs and services Ontarians rely on such as child care, education and health care.

Ontario’s Actions

The Province’s economic and fiscal outlook is improving on many fronts, including:

  • Outpacing Canada’s economic growth over the past two years, with private-sector economists expecting Ontario to be a growth leader over the next two years.
  • Continued improvement in the province’s labour market, with more than 641,000 net new jobs created since the recession and the unemployment rate at an eight-year low.
  • A projected deficit of $4.3 billion in 2016–17, in line with the 2016 Budget
  • A long-term borrowing forecast of $23.8 billion in 2016–17—an improvement of $2.6 billion compared to the 2016 Budget forecast—and the smallest borrowing program since 2008–09.
  • Being on track to meet its $5.7 billion multi-year asset optimization target to support infrastructure investments, including crediting $3.4 billion to the Trillium Trust from the net revenue gains from the  sale of Hydro One shares in 2015 and the sale of the LCBO head office lands in June 2016.
  • More than $230 million in additional revenue over what was reported in the 2016 Budget through enhanced compliance measures.

Going Forward

Ontario is positioned for continued economic and fiscal strength based on a number of factors, including:

  • Forecasting real gross domestic product growth of 2.2 per cent on average until 2019.
  • An unemployment rate, which has been consistently lower than the national average for 18 months in a row, that is projected to steadily decline.

Chart Description:

Chart : Ontario’s Plan to Eliminate the Deficit

This bar chart shows Ontario’s actual deficits versus deficit targets from 2009–10 through 2015–16. In the 2009 Ontario Economic Outlook and Fiscal Review, Ontario projected a $24.7 billion deficit for 2009–10. The actual result for 2009–10 was a deficit of $19.3 billion. The 2010 Budget projected deficits of $19.7 billion for 2010–11, $17.3 billion for 2011–12, $15.9 billion for 2012–13, and $13.3 billion for 2013–14. The actual deficits were $14.0 billion in 2010–11, $13.0 billion in 2011–12, $9.2 billion in 2012–13, and $10.5 billion in 2013–14. In the 2014 Budget, Ontario projected a $12.5 billion deficit for 2014–15. The actual result for 2014–15 was a deficit of $10.3 billion. In the 2015 Budget, Ontario projected an $8.5 billion deficit for 2015–16. The actual result for 2015–16 was a deficit of $5.0 billion.

The bar chart also depicts the fiscal outlook outlined in the 2016 Ontario Economic Outlook and Fiscal Review for 2016–17 to 2018–19. The government is projecting a deficit of $4.3 billion in 2016–17 and balanced budgets in 2017–18 and 2018–19, consistent with the 2016 Budget plan.

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