Fall Economic Statement Updates Ontario Finances
Ontario Moves to Protect Core Services and Manage Spending
In the face of global economic uncertainty and the slowing U.S. economy, the McGuinty government is continuing to encourage long-term economic growth and do everything it can to protect key public services.
In its 2008 Ontario Economic Outlook and Fiscal Review released today, the government revised the province's projected economic growth outlook for 2008 to 0.1 per cent, down from the 1.1 per cent forecast in the 2008 Budget last March. As a result, projected revenue will decline, while expenditures will increase in certain areas.
Due primarily to lower revenues, the government is projecting a $500 million deficit for 2008-09. It is also taking action to further manage expenditures in the remaining five months of the 2008-09 fiscal year by delaying the implementation of and slowing down some new spending, while at the same time restraining internal government expenditures.
For five years, the McGuinty government has invested in what matters most to Ontarians and helped to prepare the province for the uncertainties it faces today. These investments continue through its five-point economic plan, which responds to the needs of individuals, families and businesses by:
- Investing in skills and knowledge
- Investing in infrastructure
- Lowering business costs
- Strengthening the environment for innovation
- Forming key partnerships.
- Total revenue in 2008-09 is projected to decrease by $918 million from the 2008 Budget forecast.
- Total expense in 2008-09 is projected to increase by $132 million from the 2008 Budget forecast, largely due to higher utilization-related expense in the Ontario Health Insurance Plan (OHIP) program.
- The government has partially drawn down the $750 million reserve for 2008-09 included in the 2008 Budget plan. The remaining $200 million reserve protects against adverse changes in the province’s revenue and expense outlooks, including those resulting from changes in Ontario’s economic performance.
- More than half a million net new jobs have been created in Ontario in the past five years. This year alone, Ontario has created 104,100 net new jobs.
- The McGuinty government has prudently managed through deficits in the past – the $5.5 billion deficit it inherited in 2003 was eliminated within two years and was followed by three consecutive surpluses.
“Today’s economic reality is forcing governments around the world to re-examine their expenditures, adjust their assumptions and respond to an environment where the only constant is uncertainty. The government will bring greater focus to the management of its expenses and it is compelled to delay the implementation of and slow down some new spending.”
“This year’s projected deficit will allow the government to maintain its important investments in Ontario’s economic future as we work through the real challenges that confront the world today. Through the McGuinty government’s five-point economic plan, we are doing everything we can to protect key public services and build confidence in Ontario’s economy”