Toronto News | Weather & Traffic | CTV News Toronto
McGuinty not giving preview of budget deficit
AMHERSTBURG, Ont. - Premier Dalton McGuinty is keeping a tight lid on just how deep Ontario will sink into red ink, despite alarming predictions that the deficit could climb as high as $18 billion over two years.
Everyone will just have to wait until the provincial budget is unveiled March 26, he said Friday.
"All I can say is what I've said before: the numbers will come out in the budget itself," McGuinty said in Amherstburg, where he announced nearly $8 million in federal, provincial and municipal funding for a new $24-million sports complex to be built in the southern Ontario town.
"It will be a significant deficit."
McGuinty vowed his government will "do our part" to stimulate the economy, create jobs and preserve some of the gains the province has made in health care and education. But all of that takes money, he added.
"That's a pretty tall order when it comes to one budget, but these are extraordinary circumstances," McGuinty said.
"And that's why I think you'll see deficits popping up from coast to coast to coast here in Canada."
TD chief economist Don Drummond is predicting that Ontario will run a deficit of about $5 billion in the current fiscal year ending March 31 and another $13 billion in the next.
Plunging tax revenues and increased spending on health care and infrastructure projects designed to kickstart the troubled economy will put a big squeeze on Ontario's finances, experts say.
Red ink is expected to rain down on most of the provinces this spring as they grapple with a recession that's draining their coffers of tax dollars needed to fund hospitals, schools and other basic services.
British Columbia's recent budget forecast a $495-million deficit for the fiscal year 2009 and $245 million for 2010.
Quebec, Nova Scotia, New Brunswick, and Newfoundland and Labrador have all signalled they are on the brink of falling into deficit, forcing some governments to break election promises to balance the books.
Even oil-rich Alberta is expecting a deficit of more than $1 billion, as years of economic growth come to a crashing halt.
The federal Conservatives, who insisted last fall that Canada was on track to deliver a small surplus, are preparing to rack up deficits totalling $86 billion over the next five years.
It's a complete turnaround from recent years, which saw many governments in Canada deliver balanced budgets with large surpluses.
Among the provinces, Ontario is expected to have the largest deficit, which other economists have pegged at more than $10 billion.
Last fall, Ontario Finance Minister Dwight Duncan predicted a $500-million shortfall, but the government has since left the door open to a much larger sum after promising to bail out struggling automakers and match federal dollars for infrastructure projects meant to boost the ailing economy.
For weeks, McGuinty has warned of a "significant" deficit in the upcoming budget, adding that it will take several years for the province's economy to get back on track.
The Opposition says Ontario is already in serious trouble because McGuinty raided the province's cupboards and now there's nothing left.
The Progressive Conservatives say Ontario's revenues have increased by $27 billion since the Liberals took power in 2003, but so has government spending, leaving nothing behind for a rainy day.
The province has lost 237,400 manufacturing jobs since 2003, while the number of public servants collecting salaries of $100,000 or more has climbed 110 per cent, they say.
Conservative Leader John Tory, who is gearing up for a March 5 byelection that could return him to the legislature, is urging McGuinty to freeze hiring in the public sector and slash corporate income taxes to save Ontario's economy from permanent damage.
But if things don't turn around soon, the Tories say McGuinty will be saddled with the worst financial record since the NDP government of the early 1990s, which racked up huge deficits in a bid to fight off the recession.
Some economists predict Ontario's gross domestic product could drop by 2.5 to nearly three per cent in 2009, with no significant signs of growth until 2011 -- the same year the Liberals will be facing another election.