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Ontario Finance Minister Charles Sousa, right, delivers the 2014 budget next to Premier Kathleen Wynne at Queen's Park in Toronto on Monday, July 14, 2014.Darren Calabrese/The Canadian Press

Ontario's final deficit number for last year is $1.2-billion less than originally forecast – but the government burned through a billion-dollar reserve fund to get there.

Finance Minister Charles Sousa used the reserve fund – a cushion he built into the budget – to compensate for the fact the government took in $900-million less in revenue than he had anticipated.

"This reflects slower than expected economic growth," he told reporters Monday. "While Ontario is emerging from the great recession, our economy is still building confidence. The global economic environment remains challenged."

The deficit clocked in at $10.5-billion, down from the $11.7-billion estimated when the budget was tabled in the spring of 2013.

Ontario's deficit has grown from $9.2-billion in 2012-2013 to $10.5-billion last year. It is projected to grow further, to $12.5-billion this year. After that, Mr. Sousa is projecting, it will fall sharply and disappear altogether within three years.

Overall revenue increased last year by $2.5-billion from the previous fiscal year, but it was a smaller uptick than the government had projected. Both revenue from HST and personal income tax were down; corporate income tax and land transfer tax pulled in more than expected.

This is not the first time the province's revenue projections have proven overly rosy. It is a problem governments around the world face, as the recovery from the recession has proven slower than expected.

But Mr. Sousa said he has been fiscally careful enough that the province's finances can deal with these troubling economic signs.

"I've taken a cautious approach in our revenue calculations – we take an average of independent economists, private sector forecasts, and we tone it down even further – and still, those revenue targets weren't met," he said. "Notwithstanding, we've taken steps to control our spending."

Overall spending clocked in $1.2-billion less than projected.

Progressive Conservative finance critic Vic Fedeli, however, said the government must do more to cut spending if it seriously wants to wrestle down the deficit.

"What we've really seen is a Shania Twain song – up, up, up," he said. "We've seen spending in 14 ministries go up…that's going the wrong way."

New Democrat finance critic Catherine Fife, meanwhile, said the government should hike corporate taxes by a percentage point to score some extra cash.

"Using a billion dollars and raiding the reserve is not a sustainable plan to get the province back on track," she said.