More deficits, debt coming in Ontario, financial accountability officer warns
Accumulated deficits and infrastructure plans could add $54 billion over five years to the province's net debt.
TORONTO — Ontario’s financial accountability officer says it’s possible the Liberal government can keep its promise to balance the books by 2017-18, but only if the economy grows at a stronger pace than in the past five years.
And even if they do get to balance on schedule, Stephen LeClair predicts the province will quickly be plunged back into annual budget deficits.
LeClair also warns the accumulated deficits and the Liberals’ “large infrastructure plans” will add $54 billion over the next five years to the province’s net debt, which he says will hit $350 billion.
LeClair’s forecasts are less optimistic than the government’s _ he projects a $580-million shortfall in 2017-18, but concedes there’s enough flexibility in the Liberals’ plan that they could eliminate the red ink that year as promised.
He warns there will be increasing spending pressure on the government from demographic changes and higher costs of services, and points out the province is relying on growth to exceed the average in recent years.
If growth maintains the same pace, LeClair says there would be a deficit of $1.4 billion in 2017-18, growing to $3.5 billion by 2020-021.
He projects government revenues will grow at an average pace of 3.8% a year, faster than the 2.6% pace in the last four years.
LeClair says Ontario’s net debt-to-GDP ratio will peak at 39.6% this year, falling slightly to 38.4% by 2020-21. He says the Liberals have given no details of how or when they’ll keep a promise to cut it to 27%.
LeClair also says employment is expected to grow steadily, reflecting growth in the economy, but says on average Ontario will add about 80,000 new jobs a year, gradually reducing the unemployment rate to 6% by 2020.News from © Canadian Press Enterprises Inc. 2016