TORONTO - The Ontario government had a surplus of $2.3 billion in the 2006-07 fiscal year but used it to pay off some of the provincial debt, and never considered reducing or eliminating the province's controversial health tax, Finance Minister Greg Sorbara said Friday.
The surplus represents the government's second consecutive balanced budget and was achieved through higher revenues and lower-than-projected expenses, Sorbara said.
First-quarter results for the 2007-08 fiscal year show the government is also $400 million ahead of projections so far. If the reserve emergency fund is not used, the government is projected to have a surplus of $750 million at the end of the fiscal year.
"What these reports tell us today is that the province's financial circumstances are way better than they were four years ago,'' Sorbara said.
But there's still not cash coming in to safely phase out or cancel the health tax, which contributes $2.5 billion a year to the health-care system, Sorbara said.
The tax -- billed as a "premium'' when the governing Liberals introduced it in 2004 despite solemn promises to hold the line on taxes -- will stay in place, as planned, until it is reviewed in 2009, he added.
Conservative Leader John Tory has promised to eliminate the tax if elected -- a move Sorbara said he believes would prove a mistake.
"We have not yet seen any numbers from Mr. Tory on how he pretends to be able to pay for his program,'' Sorbara said.
"I've been in this job long enough to know either we're going back to deficits . . . or we're going to see a dramatic reduction in the quality of our health care.''
Tory said he plans to provide a full costing of his election platform before the official campaign begins, which will show eliminating the tax is possible.
He said the government's recent flurry of pre-election spending announcements, which add up to nearly $25 billion, make it clear it's far from impossible.
"If you wanted to . . . give some money back to taxpayers who are struggling to keep up, it could be done, and under our government it will be done,'' Tory said.
Tory also questioned how Sorbara could have "found'' an extra $2.3 billion -- more proof, he said, that the public can't trust the government's numbers.
"Every time this guy who claims to be a finance minister puts on a new pair of pants he seems to find $2 billion,'' said Tory, a former president of Rogers Cable.
"I can assure you, having run a large organization before, you don't just find $2 billion.''
New Democrat Leader Howard Hampton said Premier Dalton McGuinty is bribing voters with their own money in the weeks before the Oct. 10 election.
"For four long years, Mr. McGuinty deliberately misled Ontario families about the province's finances so he could use our tax dollars to finance a pre-election vote-buying spree,'' Hampton said in a statement.
But Sorbara said Ontario -- like Alberta, British Columbia, Nova Scotia and Saskatchewan -- simply outperformed its projections and there's nothing funny about the numbers.
He added that the auditor general reviewed the figures and said everything was in order.
Sorbara said he remains concerned about the economy's effect on Ontario's projections, but added he's confident the province's finances are strong enough to withstand outside pressures like a rising Canadian dollar and interest rates.
After using the surplus to pay down its debts, the province's accumulated deficit stands at $107 billion.
