Ontario’s fiscal watchdog says the province’s deficit will jump to almost $12 billion this year as a result of higher spending in the Liberal government’s 2018 budget and weak revenue gains.
The Financial Accountability Office also says the government’s spending plan will add about $70 billion to the province’s net debt, increasing it to almost $400 billion in 2020-21.
The findings come in the FAO’s Spring 2018 Economic Outlook, released just a week before a provincial election campaign kicks off.
The Liberal government’s spring budget had said the deficit for 2018 would be $6.7 billion, with the books expected to stay in the red for six years.
The FAO report warns that the plan to balance the budget by 2024 involves a dramatic cut in spending growth.
It says the government has provided few specifics about those spending cuts but says it would need to find $15 billion in reductions by 2025, or the equivalent of an eight per cent drop in program spending, to achieve its goal.