FOR IMMEDIATE RELEASE:
(TORONTO, December 10, 2018) – Today the Financial Accountability Office of Ontario (FAO) released the Fall 2018 Economic and Budget Outlook, which provides the FAO’s latest economic forecast and an updated assessment of the Province’s fiscal outlook.
Peter Weltman, Ontario’s Financial Accountability Officer, says that “after four years of strong economic growth, Ontario’s budget deficit will more than triple this year to $12.3 billion. The 2018-19 deficit will be the largest since 2011-12, the result of a significant increase in program spending combined with a decline in overall revenue.”
The government’s recent Fall Economic Statement did not provide a budget forecast beyond the current year. The FAO projects that without further policy changes, Ontario’s budget deficit will increase to $15.1 billion in 2019-20, largely due to revenue reductions announced since the 2018 Budget. Given current policies, the deficit is expected to exceed $16 billion by 2022-23.
“While the government has not indicated when it intends to balance the budget, it has committed to not raising taxes,” says Weltman. If the government were to balance the budget over four years, without raising taxes, it would need to limit the growth in program spending to 1.2 per cent per year. This would represent the slowest growth in program spending over a four-year period since the mid-1990s and require the government to reduce spending by $850 per person or by 8 per cent from today’s levels, by 2022.
Weltman emphasizes that balancing the budget will require significant changes to fiscal policy and that “Ontarians would benefit from an informed debate on the Province’s budget objectives and the trade-offs necessary to achieve them.”
Click here for Fall 2018 EBO.
About the FAO
Established by the Financial Accountability Officer Act, 2013, the Financial Accountability Office (FAO) provides independent analysis on the state of the Province’s finances, trends in the provincial economy and related matters important to the Legislative Assembly of Ontario. Visit our website at http://www.fao-on.org/en/ and follow us on Twitter at https://twitter.com/InfoFAO.