2012-13 Deficit Projection Improves by $3 Billion
McGuinty Government’s Plan to Eliminate Deficit is Working
Ontario's deficit is now $3 billion lower than projected in last spring's budget. The province's 2012-13 deficit is projected to be $11.9 billion - an improvement from the $14.8 billion that was projected in the 2012 Ontario Budget.
This is the fourth year in a row that Ontario is ahead of the government's fiscal targets. The deficit is now projected to be 52 per cent lower than the $24.7 billion deficit projected in the fall of 2009, at the depth of the global recession.
The updated projection includes one-time savings of $1.1 billion from the elimination of banked sick days for teachers. It also includes increased revenues in 2012-13 mostly due to a one-time boost to corporate tax revenues of $1.1 billion, largely related to tax assessments for years prior to 2011.
Despite this progress, continued strong action is required to eliminate the deficit. The 2012 Budget included nearly $18 billion in savings and cost avoidance over three years.
Eliminating the deficit remains the single most important step the province can take to grow the economy and create jobs. A strong economy is the means to continue delivering the best education and health care in the world.
- The outlook for 2012–13 indicates that the province’s revenue outlook has increased $1.3 billion from the 2012 Budget forecast.
- The total expense outlook for 2012–13 is now projected to be $1.2 billion lower than forecast in the 2012 Budget.
- Ontario’s economy continues to grow in a challenging global environment, although the pace of growth remains modest. Private sector economists, on average, project Ontario real GDP growth of 2.0 per cent in 2012, up slightly from 1.9 per cent expected at the time of the 2012 Budget. However, private sector growth forecasts for 2013 have eased, now averaging 1.8 per cent, down from 2.3 per cent at the time of the 2012 Budget. There are considerable risks to the outlook, including the recession in Europe and continued fiscal and economic uncertainty in the U.S.
- Since spring 2012, all reporting jurisdictions, except for Ontario and Quebec, have signalled a deterioration in their fiscal positions for 2012–13.
- Other provinces and the federal government have announced that they may need to delay their balanced budget target date. For instance, the federal government has changed its year-to-balance five times since its 2009 budget.
- For the most recent statistics available for 2012, the average annual wage increase for collective agreements in Ontario’s public sector was 0.9 per cent, which is lower than the average increase of 1.1 per cent in the private sector, 1.6 per cent in the municipal sector and almost two per cent in the federal public sector.
- Read Ontario Finances: Third Quarter 2012-13
- Read the October 2012 Ontario Economic Outlook and Fiscal Review
- Read the 2012 Ontario Budget
- Read the strong actions the McGuinty government took in the 2012 Budget to reduce the deficit further
- Read the Addendum to the 2012 Ontario Budget: Report on Expense Management Measures
“The McGuinty government’s plan is working. Ontario continues to beat its deficit targets – a direct result of managing expenses while also protecting education and health care. Ontarians don’t want deep, across-the-board cuts that would hurt their valued public services. They prefer a smart, thoughtful approach that will protect the gains we’ve made together.”
“What stands out is Ontario is the only province tracking somewhat ahead of their budget targets.”