Ontario Remains on Track to Eliminate the Deficit by 2017-18
McGuinty Government’s Strong Action Is Working
Ministry of Finance
The deficit projection for the current fiscal year has improved by more than $400 million from the 2012 Budget forecast to $14.4 billion. The province remains on track to meet the 2012 Budget deficit targets in 2013-14 and 2014-15 and for the deficit to be eliminated by 2017-18.
Ontario is projecting growth in real gross domestic product (GDP) of 2.0 per cent in 2012, 1.9 per cent in 2013, 2.3 per cent in 2014 and 2.4 per cent in 2015.
As of September 2012, Ontario employment was 356,000 net new jobs above its recessionary low in June 2009. Ontario is expected to create nearly 350,000 net new jobs by 2015, reducing the unemployment rate to 6.8 per cent from a high of 9.4 per cent in June 2009.
The fiscal plan provides no funding for incremental compensation increases for new collective agreements. The government is currently consulting on draft legislation that proposes to freeze compensation for executives and managers across the Ontario Public Service, and the Broader Public Sector (BPS) who are eligible for performance pay. It also proposes to ensure future BPS collective agreements are consistent with the province's goals to eliminate the deficit and protect jobs and public services. The proposed draft legislation would support avoiding increased spending in the BPS of $2.8 billion over three years and help to protect roughly 55,000 public sector jobs.
- The 2012–13 revenue projection of $113,019 million is $445 million above the 2012 Budget outlook, largely reflecting a higher estimated 2011–12 tax base. Consistent with the government’s continued effort toward managing the growth in expenses, total expense for 2012–13 has decreased by $3.7 million compared to the 2012 Budget plan.
- Robust business capital investment, a rebound in net trade and increased consumer spending will be key contributors to growth. Over the past two years, business investment spending on plant and equipment has risen by more than 22 per cent, or $11.1 billion.
- In the 2011–2012 Public Accounts of Ontario, the government announced the deficit for 2011–12 was $13.0 billion, marking the third consecutive year in which the province has improved on its fiscal projections. This result is also 47 per cent lower than the 2009–10 deficit of $24.7 billion forecast in the fall of 2009, at the depth of the global recession.
- The government has brought together business, labour and public sector leaders to form the Jobs and Prosperity Council. Reporting to the Premier, and headed by RBC President and CEO Gordon Nixon, the council will explore additional opportunities in the next few months for a path to sustainable growth that will also help inform the 2013 Ontario Budget.
- The 2012 Budget extended the pay freeze for MPPs by a further two years — for a total of five years.
Despite ongoing global economic uncertainty, Ontario is ahead of its targets for lowering the deficit for the fourth year in a row. We will work with anyone who is willing to work with us to meet the objectives of eliminating the deficit and protecting jobs and public services."