Ontario Projects $12.9 Billion Deficit for This Year in Fall Economic Statement

Ontario Minister of Finance Peter Bethlenfalvy speaks to the media at Queen's Park in Toronto, on Aug. 9, 2022. (The Canadian Press/Andrew Lahodynskyj)

The Ontario government is projecting a deficit of $12.9 billion for the 2022-2023 fiscal year, which it says is about $7 billion lower than expected, according to the province’s fall economic statement released today.

The province is expecting its deficit to decrease over the next two years, becoming about $8 billion next year before dropping down to $700 million in the 2024–25 fiscal year.

Government officials say a nearly $7-billion improvement in this year’s $19.9-billion deficit from the spring budget is largely due to higher nominal GDP and inflation.

Ministry of Finance officials say there is a high degree of economic uncertainty, and under a faster economic growth scenario Ontario could see a $9.2-billion surplus in 2024-25, while under a slower growth scenario, the deficit that year could be $8.5 billion.

The government expects to spend around $199 billion this year, with the large majority of expenses going toward funding programs. The fall statement says government spending is expected to grow slightly from now until 2025, with expenses reaching over $203 billion by 2024-2025.

“As we navigate these uncertain economic times, our government is enhancing its plan through new targeted measures that support families, seniors and small businesses,” said Ontario Finance Minister Peter Bethlenfalvy in a statement on Nov. 14.

Premier Doug Ford’s government also recently announced that it would be extending the 5.7-cent gas tax cut that took effect in July until the end of next year.

Spending

The province’s fall statement includes changes to the Ontario Disability Support Program (ODSP) that will allow those collecting it to “keep more of the money they earn” by increasing the monthly earnings exemption from $200 to $1,000 per month.

Above that amount, people on ODSP could keep 25 cents on the dollar. It could encourage up to 25,000 more people to participate in the workforce, the government said.

For low-income seniors, the government proposes to double the Guaranteed Annual Income System payment for a year starting in January. The maximum payment for single seniors would be $166 per month and $332 per month for couples. The government is also indicating it is working on expanding eligibility for the payments.

Ford’s government also plans to increase monthly payments next year for the Assistance for Children with Severe Disabilities program to account for inflation.

The province’s fall statement comes less than two weeks after the federal government released its own fall economic statement, in which it announced $30 billion in new spending.

Bethlenfalvy at the time said the Ontario government was pleased with parts of Ottawa’s fall statement but saw shortcomings in other areas.

“We can’t help but notice the absence of support to move transformational projects forward that are critical to Ontario and Canada’s economic success,” he said in a statement on Nov. 3.

“In a time of economic uncertainty, Canadians across the country will be looking to federal and provincial governments to address their concerns.”

The Canadian Press and Rahul Vaidyanath contributed to this report.