Ontario deficit ballooning to $9.8B next year amid slow economic growth

TORONTO — Ontario is delaying its path to balance as lethargic economic growth drags the province's books further into the red, with a $9.8-billion budget deficit projected for the coming fiscal year.

"These are the real challenges and real problems of real life and real people, of making rent, of paying the bills, of affording groceries. And the best way to help people is by getting the big decisions right. Making smart investments. Watching the expense line. And most of all, keeping costs on people low."

"We are going to follow through on a plan that is working — knowing that the higher deficits, compared to what we projected last year, will be time limited while the return on investment will be felt for decades," he said. As well, the province is planning auto insurance reforms, putting money toward four police helicopters for Greater Toronto Area forces, supporting a new York University medical school focused on training family doctors, and increasing the eligibility threshold for a program that helps families with the cost of electricity.

The government is spending billions more on broader public sector compensation, particularly in health and education, after its wage restraint law was declared unconstitutional last month. The province has mostly relied on large, multi-billion-dollar contingency funds to pay for retroactive payments it has had to make, but going forward the contingency fund is set at a more standard level of $1.5 billion.

Colleges have increasingly relied on the much higher tuition fees paid by international students to bolster their finances in the face of low operating funding from the province and a multi-year domestic tuition freeze.Liberal finance critic Stephanie Bowman noted that the Progressive Conservatives have added $100 billion in net debt since coming to power in 2018, and criticized the government for managing to both pile on debt while also underspending on services such as health care.

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