The economic crash has put Ontario's coffers in a $6.4-billion hole for the last fiscal year.

The province, which has Canada's largest economy, blamed the red ink on plunging corporate tax revenues. The final figures were released on Friday and show that the provincial economy contracted by 0.5 per cent over the same period.

As part of that contraction, corporate tax revenue plummeted by 48.1 per cent, the largest year-over-year decrease in recent history.

"Corporate taxes are always very volatile, but none of us has ever seen anything like this," Finance Minister Dwight Duncan said Friday.

The province spent almost $97 billion in 2008-09, which it claims was an increase of only 0.37 per cent over the previous budget year.

The Liberal government of Premier Dalton McGuinty says it managed to save $111 million in the last five months of the year through spending restraint and program deferrals.

In the current, 2009-2010 budget year, the government is expecting a deficit of $18.5 billion on the year.

That figure is $4.4 billion higher than what was predicted in the March 26 budget because the province said it is struggling with a "weaker economy."

According to provincial figures, the $4.4 billion deficit increase is the result of:

  • $2.8 billion in lost revenue
  • $1.5 billion for auto sector support
  • $100 million for interest payments

While Duncan said that the economy appears to be turning around, he warned that corporate tax revenues may not immediately rebound.

"Government revenues will lag growth in the economy," he said. "But now, as a government . . . we have to look at the expenditure side of our income statement and we have to make some very difficult choices."

But opposition MPs said the numbers weren't acceptable and the NDP called for an independent budget officer.

"Ontarians should expect an impartial budget document, not one clouded by partisan political spin like we've gotten from the McGuinty government," said NDP Leader Andrea Horwath.

"Each and every update out of the mouths of the premier and the finance minister was rosy. It turns out their spin was far from the truth."

With files from CTV Toronto's Paul Bliss