Ontario's deficit projection has fallen, and Finance Minister Charles Sousa is signalling the Liberal government will curb program spending and restrain public-sector wage increases to further improve the province's finances.
The estimated deficit for fiscal year 2014-15, which ended Tuesday, is now pegged at $10.9-billion, down from $12.5-billion last fall.
"We're looking across government to achieve better value for your money," Mr. Sousa told a lunch-hour business audience at a downtown Toronto hotel. "We must hold the line."
The announcement comes weeks before the 2015-16 budget – a do-or-die spending plan that must finally reduce the deficit after two years of increases if the government is to have any hope of achieving its goal of a balanced budget in two years' time.
With one of the largest sub-sovereign debt loads in the world, at roughly $280-billion, the province badly needs to show progress on becoming fiscally sustainable.
Mr. Sousa said the low dollar and cheap gasoline have been a boon to Ontario's economy, but he promised not to depend on those factors to achieve balance. Instead, he said, the province will keep tightening its belt and achieve "net-zero" contracts with unionized workers, in which any hike in wages is offset by cuts to benefits.
The minister also hinted government is deep into negotiations over the partial privatization of Hydro One and reforms to the province's beer and wine market.
"There are still some sensitive matters that we are trying to resolve," he said when asked why he has not set a date to deliver the budget. "There are a lot of partners involved, so I'm just being sensitive to the confidential nature of the things that could come from it."
As first reported by The Globe and Mail, the government is considering selling off a majority of Hydro One stock to the private sector, maintaining only a plurality of shares in public hands. The province is also looking to open beer and wine sales to large grocery stores, and charge the private owners of the Beer Store a fee in exchange for keeping their lucrative cartel arrangement, government and industry sources say.
(What's the story behind The Beer Store and its lucrative monopoly in Ontario? Read The Globe's easy explanation)
The minister also hinted his upcoming budget will provide more incentives for corporations to invest in the province. He provided no specifics, but suggested the corporate help would include a combination of tax credits and training programs to match workers to available jobs.
"In our 2015 budget we will highlight further enhancements to help business improve their productivity and succeed," he said.
Progressive Conservative finance critic Vic Fedeli argued that a small reduction to a projected deficit that has grown over the past two years was hardly cause for celebration. And he accused the Liberals of simply inflating the initial target so they could later beat it. "They started with a fake number," he said.
NDP finance critic Catherine Fife, meanwhile, said she could not understand why Mr. Sousa had still not set a budget date. "Does this minister need a Ouija board?" she asked.