Ontario tax revenues off $509M from July budget forecasts
Economic growth in the province is projected at just 1.9% for 2014 and about 2.4% a year for 2015-to-2017.
TORONTO — Ontario government revenues are down more than half a billion dollars, said Finance Minister Charles Sousa, prompting the opposition parties to warn the Liberals will have to raise taxes to balance the books in three years.
In his fall economic update, Sousa said revenues are down $509 million from what was forecast in the budget, while the deficit remains at $12.5 billion this year, and is projected to be $8.9 billion next year, falling to $5.3 billion in 2016-17.
Economic growth is projected at just 1.9% for 2014 and about 2.4% a year for 2015-to-2017, well below the budget forecasts, he added.
“The global economic environment remains challenging and has contributed to a slower pace of revenue growth,” said Sousa. “However, there are positive signs that the economy is gaining momentum this year, supported by a resurgence in the US.”
Sousa also hinted the Liberals were prepared to raise taxes if necessary to help make sure the deficit is eliminated by 2017-18 as promised.
“Should revenues fall further, the government must consider other tools to balance the budget,” he said.
The Progressive Conservatives called Sousa’s fall economic update a “fiscal fairy tale,” and predicted the Liberals would “absolutely” have to hike taxes to eliminate the deficit on schedule.
“Instead of tackling the real core problem, which is they spend too much, they’d rather look for nickels and dimes in the couch and look at how to dip their hand in your pocket even deeper,” said PC finance critic Vic Fedeli. “The real solution is controlling spending.”
Sousa did not announce any new tax measures or other major changes in the fall economic update, but said from now on any companies that want Ontario government contracts must prove their taxes are paid up to date.
© 2014 The Canadian Press