Ontario’s fiscal picture is a bit rosier, thanks largely to the “NDP surtax,” says Finance Minister Dwight Duncan.
One day after the minority Liberal government survived its first budget vote with the help of New Democratic Party Leader Andrea Horwath, Mr. Duncan unveiled an updated fiscal plan that pegs the deficit forecast at $14.8-billion for fiscal 2012-13.
Mr. Duncan has shaved $400-million from the forecast contained in last month’s budget for fiscal 2012-13. The revised forecast follows an accord between Premier Dalton McGuinty and Ms. Horwath that would raise income taxes on the small number of Ontarians who make $500,000 or more a year. The new surtax of 2 per cent was a key demand of Ms. Horwath in return for her party’s support of the budget.
“That tax does get us there more quickly,” Mr. Duncan told reporters at a news conference on Wednesday.
The provincial deficits are now projected to be lower than forecast in each of the six fiscal years between 2012 and 2018, Mr. Duncan said. Rather than breaking even in fiscal 2017-18 – the year he is forecasting the deficit will be eliminated – he is now projecting a surplus of $500-million, largely because of the new surtax.
Mr. Duncan said the tax-the-rich measure, which he refers to as either the “NDP surtax” or the “temporary deficit-fighting high-income tax bracket,” will raise additional annual revenues of $470-million. The government plans to cancel the surtax once the deficit is eliminated.
The overall provincial debt would be reduced by $3.5-billion by 2018, he said.
All 37 Progressive Conservative MPPs voted against the budget motion on Tuesday. PC finance critic Peter Shurman accused Mr. McGuinty of breaking his vow not to raise taxes in order to buy political support and “salvage” his government.
“And now, in typical fashion, he’s trying to blame his new tax grab on others, by calling it ‘the NDP surtax,’” Mr. Shurman said in a statement on Wednesday.