TORONTO - Ontario is on track to post a $750-million surplus in the coming budget which may be used to offset the ongoing economic slowdown.
The province's third-quarter results, quietly released last week, project a $750-million reserve, which the Liberal government could use as a rainy-day fund.
Despite a slowdown in the United States and the high dollar plaguing Ontario's manufacturing industry, the province's quarterly update says "there is reason for increased confidence'' that the reserve won't be needed to balance the books.
But Finance Minister Dwight Duncan isn't ruling out dipping into the reserves.
"Our revenues are ahead of where we projected they would be. Growth is ahead of where we projected it would be,'' Duncan said as he went into a cabinet meeting Wednesday. "We'll see what happens in the fourth quarter.''
Duncan has just wrapped up his pre-budget consultations across Ontario, where he said people are concerned about where the economy is headed, particularly in the manufacturing and forestry sectors.
Premier Dalton McGuinty said the economy will be top-of-mind when the legislature resumes sitting this spring and as the Liberals draw up their budget.
There is no doubt Ontario will continue to feel some impact from the slowdown south of the border, McGuinty said.
While 85 per cent of Ontario jobs are "humming along pretty well,'' the premier said the other 15 per cent in the traditional manufacturing and resource sectors are "being challenged.''
"I feel particularly for families who are caught up in this slowdown and whose jobs may be at risk or -- in the worst cases -- they've actually lost their jobs,'' he said.
"So we will continue to find a way to invest in this economy and lend support to families who have been affected by job losses.''
Although he wouldn't speculate on what will be in the budget, Duncan said there is one thing people can count on.
"We've said there will be no tax increases,'' Duncan said.
Conservative Tim Hudak said he will believe it when he sees it. With a projected surplus and increased revenue, Hudak said the budget should focus on tax cuts.
"We have far more revenue coming into the treasury than has been expected. Some $25 billion has come into the treasury since this government was elected, mainly through higher taxes,'' Hudak said.
"It's time to give a break to working families, seniors, and a break for businesses that are hard-pressed by the economic environment.''
New Democrat Peter Tabuns said low-income residents should get a tax break while higher-income earners should pay more.
"We should be using that money to deal with our social problems, our environmental problems -- that's what this government should be doing.''
