Ontario’s Liberal government said Tuesday it was lowering its budget deficit faster than projected, crediting its own restraint measures for reducing government spending and stemming the flow of red ink.
The deficit for the fiscal year ending March 31 was $14-billion, down $2.7-billion from the shortfall projected in the March, 2011, budget, according to public accounts figures from the Finance Ministry.
Only $300-million of the $2.7-billion in savings came from increased revenues, Premier Dalton McGuinty told reporters after touring a construction site in this community north of Toronto.
“That $2.4-billion reduction in the deficit was as result of reduced government spending,” he said. “So we have found a way to ratchet our expenses down in a way that does not compromise the programs that families have got to be able to count on.”
The Opposition said only Mr. McGuinty and the Liberals would think a $14-billion deficit is something to be proud of.
“This is a government that has nearly doubled the debt, someone’s got to pay for that,” said Progressive Conservative candidate Vic Gupta. “In their eight years they’ve increased spending by 80 per cent, so here they are on the eve of an election announcing a $14-billion deficit as good news?”
The government was forced to run a deficit and spend billions to stimulate the economy during the recent recession, said Mr. McGuinty.
“It’s a significant deficit. We understand that,” he said. “We were called upon to make extraordinary investments. Now we’re doing the smart kinds of things to grow stronger.”
The public accounts figures show Ontario’s debt increased by $24.5-billion in 2010–11, to $236.6-billion. The province’s ratio of net debt to gross domestic product for 2010-11 was 34.9 per cent.
Mr. McGuinty blamed the uncertainty in global markets directly on rising debt levels in Europe and the United States, but rejected suggestions Ontario, too, has a debt problem.
“Well I think if you compare our numbers to their numbers, I think that they envy the position, our fiscal position at this point in time,” he said.
The New Democrats said the Liberals have a history of over-estimating projected deficits to make themselves look like good fiscal managers when the actual numbers come in.
“We shouldn’t be clowning around with budget forecasts,” NDP finance critic Peter Tabuns said in a release. The NDP want an “independent, unbiased budget office like they have at the federal level to monitor government,” added Mr. Tabuns.
The 2011 budget forecast a deficit of $16-billion for the fiscal year ending March 31, 2012, but Mr. McGuinty denied the government was waiting to revise that figure downward closer to the Oct. 6 election in an effort to make the Liberals look good.
“We put out our most thoughtful projections based on public sector and private sector analysis, and then we set it as a challenge for ourselves as a government to beat those targets,” he said. “And we’ve been pretty successful at doing that all along.”
More than 75 per cent of all ministries found savings or spent less than projected, said Finance Minister Dwight Duncan.
“I think all ministries have achieved budget projections but three quarters of them overachieved,” said Mr. Duncan. “We have laid out a fiscal deficit elimination plan. We’re still leaving the date at 2017-18 even though we’re considerably further ahead than we thought we would be at this point.”
The $14-billion deficit is the exact amount the Liberals say is missing from the Progressive Conservatives campaign platform.
“Coincidentally it happens to be the same number,” said Mr. McGuinty. “It’s the deficit for last year, but we have a plan to eliminate our deficit over time, in a thoughtful and responsible way.”