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Ontario’s new Progressive Conservative government is warning that sacrifices will have to be made after Finance Minister Vic Fedeli announced that a review of the province’s finances has found that the deficit has more than doubled to $15-billion this year.

In his first major address as the custodian of Ontario’s finances, Mr. Fedeli told a business crowd in downtown Toronto on Friday that because of significant accounting changes and an overly optimistic budget forecast from the outgoing Liberal government, the deficit has more than doubled from the anticipated $6.7-billion shortfall.

“The truth may not be much fun, but at least you know it’s the truth,” he said in a speech to the Economic Club of Canada. “The task ahead is not an easy one. The hole is deep and it will require everyone to make sacrifices without exception.”

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The revised figure came from a commission of inquiry struck only weeks after the government took office and headed by former British Columbia premier Gordon Campbell.

Most of the increased deficit comes from a change long demanded by Ontario’s Auditor-General about how the province accounts for public pension plans and a program to reduce hydro rates. Mr. Fedeli said the Liberals feuded with Auditor-General Bonnie Lysyk and, as a way of artificially lowering the deficit, wouldn’t properly account for the pension and hydro expenses. Accounting for both on the government’s balance sheet added more than $5-billion to the annual shortfall and will continue to do so.

Mr. Fedeli would not say when he expects Ontario’s budget to be balanced.

He also revised last year’s budget numbers from a $642-million surplus, which was supposed to mark the only time in a decade that the province had balanced its books, to a $3.7-billion deficit. Critics of Premier Doug Ford have warned that Mr. Fedeli’s message will be used to pave the way for significant cuts to the public sector.

Discretionary spending and hiring in the government has been frozen since Mr. Ford came into office nearly three months ago. The Tories have also rolled back or cancelled new spending on a public drug program known as OHIP-plus, planned increases to disability payments and a basic income pilot.

While campaigning in the spring, Mr. Ford said that he would not cut any public-service jobs or reduce the level of services delivered to Ontarians if his party formed government. Instead, he promised to reduce spending by $6-billion through “efficiencies.” He also promised significant tax cuts before the end of a four-year mandate. Treasury Board President Peter Bethlenfalvy said on Friday that the deeper deficit had not altered the government’s plans.

“This is not about cuts. This is about transforming the way government runs its businesses, it’s about modernizing the government’s services,” Mr. Bethlenfalvy said.

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Defending the former Liberal government’s accounting decisions, saying they were based on the best advice given by the public service at the time, interim Liberal Leader John Fraser said that Mr. Fedeli was tinkering with the books to make the deficit appear as large as possible.

“Vic Fedeli this morning was pretending that he didn’t know something that he already knew. Everything you saw this morning … was evident before the election and was clear in the pre-election report. It’s not news, everyone knew it,” said Mr. Fraser of the accounting changes demanded by Ms. Lysyk.

“Make no mistake, this is a context for cuts. And look what they put the deficit at, it’s going to be deep,” he added.

As part of the $15-billion deficit figure, Mr. Fedeli increased the size of the provincial government’s reserve fund to $1-billion from $700-million and reduced expected revenues by $1.5-billion based on weaker economic numbers. He also reduced the government’s expected savings − money allocated to departments but not spent in the fiscal year − from $1.4-billion to $0.

Paul LeBane, the vice-president of public finance with credit-ratings agency DBRS, said there were few surprises in the increased deficit because most of the accounting changes had long been expected.

“Everyone in the financial community expected the new government to pick up the Auditor-General’s concerns. The fact that the deficit number jumped like it did wasn’t a surprise,” Mr. LeBane said.

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