TORONTO -- Ontario's Progressive Conservative government will no longer balance the budget in 2023, as previously promised, after COVID-19 blew a gaping hole in the province's finances.

Premier Doug Ford said that while stabilizing the province's books was part of his government's plan before the pandemic, the projected $40 billion deficit has put Ontario in a "whole different ballpark."

"We're gonna do it over a number of years and be thoughtful about it, responsible," Ford said at a news conference at Queen's Park on Thursday. "The number one priority is to get companies back on their feet, get families back on their feet."

Ford's comments came after Ontario's Financial Accountability Officer (FAO) projected a $37.2 billion deficit in 2020-2021 to deal with the pressures of COVID-19 -- that number rises to $39.5 billion when the $2.5 billion reserve funding is factored in.

The FAO says a significant $6.7 billion drop in tax revenue, combined $21.9 billion in pandemic-related spending will contribute to the largest deficit in Ontario's history -- one that will leave the province with a $14 billion structural deficit in the years to come.

"We're not out of the woods yet, and there will be a lot of uncertainty going forward," said Peter Weltman, the province's financial watchdog.

Weltman warned that if the government planned to balance the books in five years, as was outlined in the 2019-2020 budget, it would have to either dramatically increase revenues, or drastically reduce expenditures to make up a $14 billion shortfall -- which Weltman described as "political pain.”

"Most of your expenditures are on things that people use: healthcare; education; social services," Weltman explained. "If you're going to cut spending on those areas, unless you find a way to deliver the services that people use regularly ... they will notice the cuts."

Treasury Board President Peter Bethlenfalvy acknowledged that the current healthcare crisis makes balancing the budget a lesser priority than focusing on the immediate challenges posed by the pandemic.

"We're not going to balancing per the pre-COVID numbers. I think that's just the reality," Bethlenfalvy said.

$9 billion unspent

The FAO also discovered that $9.3 billion of the government's pandemic aid package has yet to be spent, leading to accusations of penny-pinching by the premier's staunchest critics.

Of the $21.9 billion in spending increases tracked by the watchdog, $6.7 billion in the Health Sector Response Fund and the Support for People and Jobs fund and $2.6 billion in the standard contingency fund has yet to be spent.

“That money could save seniors in long-term care, now facing a new wave of deadly outbreaks. It could be spent to dramatically boost COVID-19 testing and contact tracing – which Ford has rationed and throttled back to save a buck. And it could make schools safer with smaller classes,” said NDP Finance Critic Sandy Shaw.

Bethlenfalvy said the government set billions aside so that the province has the financial "firepower" to deal with pandemic-related issues when they arise, and the leftover funds will be spent by the end of the fiscal year.

"We have five and a half months left in our fiscal year [and] we're going to use that money."