Ontario aiming for balanced budget by 2027. But province's financial watchdog predicts target won’t be hit
CBC
Ontario's fiscal watchdog says Premier Doug Ford's government is not on track to deliver on its promise to balance the budget by 2027, despite pledges from the province that the books will be in the black by that year.
The Financial Accountability Office of Ontario (FAO) released a report Wednesday outlining how the province’s finances could look from the current fiscal year to the 2029/30 fiscal year.
Despite pressures tied to U.S. tariffs, the report predicted a slow but steady rise in the province’s GDP driven by resiliency in household spending and residential investment.
The FAO’s outlook on Ontario’s GDP was similar to the province’s outlook in the fall. But the report outlined some discrepancies between the FAO's projections for Ontario’s economy and the government’s.
Following the release of the province's fall economic statement, Ontario Finance Minister Peter Bethlenfalvy said the province is on track to balance its books by the 2027-2028 fiscal year.
But the FAO is predicting that won’t happen. Rather, the report suggests the province will run a deficit of $8.5 billion in 2027-2028.
The reason for the gap is that compared to the FAO, the province estimates less spending and more money collected from income tax, said Paul Lewis, the FAO’s chief economist, when presenting the report Wednesday morning.
“To balance, we feel that, based on the current state of policies, something would have to change — some kind of measure that would reduce spending and/or increase revenues,” Lewis said.
The province’s overall debt will increase over the next few years, according to the FAO report. Ontario’s cumulative debt is estimated to rise to $547.9 billion by the 2029-2030 fiscal year — that would be a 28.3 percent increase from this fiscal year
The FAO also predicts the government will see a lower-than-projected deficit this fiscal year and a higher-than-projected deficit next year.
So far this year, the province has accumulated a $13.4-billion deficit, according to Ontario’s third-quarter financial report. That’s $1.1 billion less of a deficit than the province initially predicted, but $2.3 billion more than the FAO estimated.
Asked if the province is on track to balance the budget by 2027-2028, Bethlenfalvy said he “won’t speculate on numbers that will come in the budget.”
He said the provincial budget will be coming “on or before” March 31.
CBC News reached out to the finance minister for comment on the differences in budget projections for 2027-2028.
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