2015 Ontario Budget
Chapter II: Ontario’s Economic Outlook and Fiscal Plan

Section A: A Balanced Path to a Balanced Budget

Despite global economic uncertainty, Ontario’s diversified and resilient economy is expected to continue to grow at a solid pace, boosted by a more competitive Canadian dollar, the acceleration in U.S. economic growth and lower oil prices. Ontario’s competitive business environment will continue to attract investment and boost economic activity in the province.

As part of its balanced fiscal policy, the government will continue to deliver programs and vital public services that matter to Ontarians. The government also wants to ensure that Ontarians get the best possible value for every public dollar spent.

Over the past four years, the Province has used a thoughtful and fiscally responsible approach to hold average annual growth in program spending to 1.5 per cent, below CPI inflation, without cutting critical services. Through prudent fiscal management and a rigorous approach to controlling program spending growth, Ontario was the leanest government in Canada with the lowest per capita program spending of any province in 2013–14, and is projected to remain the leanest government in 2014–15.

As outlined in the 2014 Budget, the government is moving forward with implementing its plan to balance the budget by 2017–18, which is the foundation of securing long-term fiscal sustainability of key programs and services. Ontario’s plan to eliminate the deficit builds on past success. In each fiscal year between 2009–10 and 2013–14, the government beat the deficit targets it established after the 2008–09 global recession.

As a result of progress to date on its plan to balance the budget, the government is now projecting a deficit of $10.9 billion in 2014–15 — a $1.6 billion improvement compared to the 2014 Budget forecast. This overachievement reflects an ongoing focus on managing growth in spending, which results in projected program spending being 16.5 per cent of gross domestic product (GDP) in 2014–15, lower than the 17.9 per cent reached in 2009–10.

As a result of lower projected total expense compared to the 2014 Budget, the government is now forecasting deficits of $8.5 billion in 2015–16 and $4.8 billion in 2016–17, and a return to balance in 2017–18. This reflects an improvement of $0.4 billion in 2015–16 and $0.5 billion in 2016–17, compared with the deficit targets laid out in the 2014 Budget.

Building a strong fiscal foundation will support Ontario’s economic growth, protect the integrity of Provincial revenue and assist in the creation of jobs. The government recognizes that balancing the budget by 2017–18 requires a balanced approach to making tough choices. Its plan is centred on:

  • Program Review, Renewal and Transformation;
  • Managing compensation costs;
  • Maintaining tax fairness and a level playing field for business; and
  • Strengthening government transparency, financial management and fiscal accountability.

Chart Descriptions

Chart 2.1: Program Spending Per Capita in 2013–14

This bar chart compares per capita program spending in Ontario to the other nine provinces for 2013–14. In 2013–14, Ontario’s per capita program spending was $8,545. This is the lowest per capita program spending among the provinces. This is followed by British Columbia, New Brunswick, Quebec, Nova Scotia, Manitoba, Prince Edward Island, Saskatchewan, Alberta, and Newfoundland and Labrador.

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Chart 2.2: Ontario’s Record against Deficit Targets

This bar chart shows Ontario’s actual deficits versus deficit targets from 2009–10 through 2013–14.

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 over the same period are $14.0 billion for 2010–11, $13.0 billion for 2011–12, $9.2 billion for 2012–13 and $10.5 billion for 2013–14.

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Chart 2.3: Ratio of Program Expense to GDP, 2009–10 to 2014–15

This line chart shows the ratio of Ontario’s program expense to nominal gross domestic product for the years 2009–10 through 2014–15. For 2014–15, the ratio is 16.5 per cent, based on the interim expense projection for 2014–15. For past years, the ratio is based on actual program expense amounts and is 17.9 per cent in 2009–10; 17.7 per cent in 2010–11; 17.1 per cent in 2011–12; 16.5 per cent in 2012–13; and 16.6 per cent in 2013–14.

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Chart 2.4: Ontario’s Plan to Eliminate the Deficit

This bar chart shows Ontario’s 2015 Budget Plan to eliminate the deficit from 2014–15 through 2017–18. The interim deficit for 2014–15 is projected to be $10.9 billion, an improvement of $1.6 billion compared to the $12.5 billion deficit projection in the 2014 Budget. For the outlook, the government is now projecting deficits of $8.5 billion for 2015–16, $4.8 billion for 2016–17 and a return to balance for 2017–18. This reflects an improvement compared to the deficit targets of $8.9 billion in 2015–16, $5.3 billion in 2016–17 and a return to balance in
2017–18 that were projected in the 2014 Budget.

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