Skip to main content
Canada’s most-awarded newsroom for a reason
Enjoy unlimited digital access
$1.99
per week
for 24 weeks
Canada’s most-awarded newsroom for a reason
$1.99
per week
for 24 weeks
// //

Christine Van Geyn is the Ontario director of the Canadian Taxpayers Federation.

This week, Ontario Finance Minister Charles Sousa will stand in the provincial legislature and deliver the fall fiscal update.

The fall fiscal update is the government's opportunity to update any of the assumptions it made in April's budget, including Mr. Sousa's promise to balance the budget by 2017-18. And updating is certainly in order.

Story continues below advertisement

April's was a "hold your breath" budget. If absolutely all of the government's optimistic projections worked out, and if the government used $3.4-billion in reserves over the next three years, it would be able to squeeze through a balanced budget.

Describing those assumptions as "optimistic" is generous. The budget might better be described as fiscal fantasy.

For example, the government assumed revenue growth of 4.3 per cent over the next three years. Fantastic indeed, given that the revenue growth rate over the most recent three years has been 2.6 per cent. Private sector forecasts of real gross domestic product growth, a key driver of government revenue, are all projecting lower-than-anticipated growth. This is a result of lower commodity prices, swings in the Canadian dollar exchange rate and continued sluggish employment growth that has not recovered since the recession or kept pace with population growth.

Yet Mr. Sousa seems to think the public will believe his claim that revenue will grow significantly faster in the next three years than it has the past three years.

How fast has your income been growing in Ontario over the past three years?

Reality demands an adjustment to this head-in-the clouds assumption. If the revenue projections aren't lowered in the fall fiscal update, there is no reason to believe any commitment to balancing the budget.

Another fiscal fantasy in the 2015 budget is the minister's promise to control program spending. Mr. Sousa projected program spending would grow at an average rate of just 0.3 per cent a year over the next three years. This is a snail's pace of growth compared with the explosive 4.1-per-cent annual average spending growth this government has undertaken over the past eight years – a pace the governing party's voting base has come to expect and demand.

Story continues below advertisement

A check of the budget projections for education spending alone is laughable. Between 2017 and 2018, the minister predicts no increase in the education budget. This target will be impossible to maintain if the government continues its practice of secret million-dollar payouts to teachers' unions.

Is it realistic to believe that Mr. Sousa will replace his spending firehose with an eyedropper? This is an ambitious goal to say the least, and spending restraint is not an area where this government has a strong track record. In the fall fiscal update, the program spending projection needs to be realistic.

So what should the revised fiscal assumptions be?

The Ontario Financial Accountability Office recommends a project spending projection of 1.4 per cent to reflect the pace of spending growth in the past four years, or 3 per cent to reflect the pace of inflation and population growth. The FAO predicted in a Nov. 4 report that anticipated reduced revenue, combined with projected higher program spending, will lead to a 2017-18 deficit of between $3.5-billion and $7.4-billion.

The FAO also recommends reducing revenue growth predictions from nigh-impossible 4.3-per-cent growth to a more realistic realm of somewhere between 3.6 per cent and 4.1 per cent. While this is more realistic, it remains far more ambitious than the 2.6-per-cent growth the province has seen in revenue for the past three years.

So if Mr. Sousa stands up to deliver his updates on the government's key budget assumptions and doubles down on his promise to balance the budget, the taxpaying public needs to consider the numbers he's using. Will this be a true fiscal update, or is he living in a fiscal fantasyland?

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies