Fiscal Balance: Ontario Returns

Canadian Council Of Chief Executives Dept: This Ontario budget will be more closely watched than the federal one, largely because there are so many questions about how Ontario returns to fiscal balance, says former federal finance minister John Manley, who now heads the Canadian Council of Chief Executives, according to Globe and Mail. Economists are concerned about the province s output heading into a period of rising global economic uncertainty, fearing Ontario may not hit already anemic targets of growth in the 2-per-cent range for this year and next. The amount of budgetary space they have to boost economic growth is quite limited, said Colin Busby, senior policy analyst with the C.D. Howe Institute and with the resources boom driving the economy in the West, Ontario isn t the economic engine it used to be. But at around 40 per cent of Canada s economy, Ontario still matters, and if the province can t figure a way out of its current bind the rest of the country will feel the pinch. Like other provinces, Ontario cranked up the deficits starting in the 2008-09 fiscal year amid the onset of global economic turmoil. What has put the Dalton McGuinty government in the crosshairs of fiscal critics, however, is the extent of its indebtedness an estimated $238-billion, up from $157-billion four years ago. Ontario s deficit, at 2.3 per cent of GDP last year, was the highest among the provinces, and debt service costs of $10-billion this year will represent its third-largest expenditure after health and education. Further, Ontario plans to take three to four years more than any other province to balance its books. Its most recent target for balance is 2017-18, and some are skeptical even that is achievable. (www.immigrantscanada.com). As reported in the news.