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Charles Sousa speaking to the media following the swearing in of Kathleen Wynne as Ontario's first female Premier, on Feb. 11, 2013.Peter Power/The Globe and Mail

Ontario's projected deficit this fiscal year will clock in between $9.8-billion and $12.8-billion as the province pumps money into transit, holds program-spending growth to less than one per cent and considers tying the clean energy benefit to income.

Liberal Finance Minister Charles Sousa revealed these details of his first budget, scheduled for May 2, to a business crowd at a downtown Toronto hotel Monday.

The government beat its fiscal projection for last year – wrestling the deficit down by $5-billion to $9.8-billion – but will stick with previous targets in preparing the upcoming budget, he said. Last year, the Liberals projected the deficit for this fiscal year at no more than $12.8-billion.

"More than ever, Ontario needs to see real fiscal discipline and prudence in its government," Mr. Sousa said. "That's what we'll deliver."

Given the need for spending restraint, the Liberals maintain Queen's Park must find new sources of money to build the massive network of subways, LRTs and dedicated bus corridors planned for Toronto, Hamilton and their suburbs.

Provincial transit agency Metrolinx is set to present a list of possible revenue options in late May, but Mr. Sousa suggested the government will detail some of its plan for paying for transportation infrastructure before that.

"Any new revenue that is required to address this problem will be generated in a way that is fair, transparent, and directly tied to the transit project it is funding," he said.

The Finance Minister reiterated Premier Kathleen Wynne's promise that any new taxes, tolls or levies would apply only to the Greater Toronto and Hamilton Area and would not be paid by people in the rest of the province.

Queen's Park will stick with its target of balancing the books by fiscal year 2017-18, Mr. Sousa said, in part by restraining spending.

It will also consider tying more government programs to income, including the clean-energy benefit. Such a change would raise electricity rates for the wealthiest Ontarians.

Corporate taxes, meanwhile, will remain at their current rate and program spending growth will be lower than the projected rate of economic expansion, he said.

Despite the austere talk, Mr. Sousa tried to strike a balanced tone in his speech, vowing not to "slash and burn" to drive down the deficit.

He also pledged to incorporate other parties' ideas into the plan. The minority Liberals must secure the support of at least one other party to pass the budget and avoid an election. The third-party New Democrats have demanded five budget concessions, including a cut to auto insurance premiums and shorter waiting times for home care.

"This won't be a budget that reflects only our government's priorities," Mr. Sousa said.

NDP Leader Andrea Horwath said her party would take its time to assess the budget when it comes out and decide whether to let it pass. She said it was unlikely the party would make a decision on budget day.

"The bottom line for us is: these things … are not hard to achieve," she said. "New Democrats are still expecting to see them in the budget. And if we don't see them in the budget, we're not going to be able to support that budget."

Meanwhile, Progressive Conservative finance critic Peter Shurman said no matter what is contained in the budget, his party will vote against it. The Tories argue program spending should be either cut or frozen for every ministry other than health care.

"My party will not be supporting his budget, no matter what it says," he said.