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National Post
Thursday, October 23, 2008
Page: A4
TORONTO – Ontario’s Liberal government downgraded its growth forecasts, cut some spending commitments and will run a $500-million deficit, the Finance Minister said yesterday.
Dwight Duncan blamed the turn of events on “unprecedented challenges in the global economy.
“These challenges are real, present and being felt by Ontario families and businesses,” he told the legislature.
The fall economic statement, designed to update projections contained in the March budget, shows the province is faring much worse than initially thought.
Revenues will be nearly $1-billion lower than projected seven months ago, and the 1.1% growth rate has been slashed to 0.1%.
In response, Mr. Duncan announced the government would spend $550-million of the province’s $750-million reserve fund.
“We will bring greater focus to the management of our expenses,” he said in a speech to the legislature. “And we are compelled to delay and slow down some new spending.”
The deficit represents a broken campaign pledge for the Dalton McGuinty-led Liberals, who promised balanced budgets while in office. The Liberals made a similar promise in 2003, then subsequently introduced a $2.6-billion health tax and ran deficits for two consecutive years.
“Our revenues are not growing as quickly as they were,” Mr. Duncan said later at an afternoon news conference.
He also tried to reassure Ontarians that: “We’re confident this will be the deficit for this year.”
The Minister also laid out $108-million in spending cuts, delaying the hiring of nurses, school improvements, family health teams and a number of small internal measures such as reducing government travel, advertising, new vehicle purchases and photocopying.
The Registered Nurses’ Association of Ontario yesterday said it was disappointed with Mr. Duncan’s statement.
“Nurses are already grappling with a serious shortage of health professionals and we were counting on the province to deliver on its promise to hire 9,000 nurses right away not later,” Wendy Fucile, the association’s president, said in a statement.
Sid Ryan, president of the Canadian Union of Public Employees (CUPE), said the province should not “stall spending.”
“It’s been proven that government investment is the only sure way to kick-start an economy when industries and financial institutions are failing,” said Mr. Ryan, who represents 225,000 workers in the public sector. “Government investments in programs keep people working and keep tax revenues flowing into the provincial coffers.”
Opposition Conservative party leader John Tory describes Ontario’s current economic situation as one entirely created by the Liberals, who have increased annual program spending by more than $23-billion since 2003.
According to information released by the province yesterday:
– Total revenue in 2008-09 is projected to decrease by $918-million from the 2008 budget forecast.
– Total expense in 2008-09 is projected to increase by $132-million from the 2008 budget forecast
– The remaining $200-million reserve protects against adverse changes in the province’s revenue and expense outlooks, including those resulting from changes in Ontario’s economic performance.
The Ontario deficit announcement and program cuts stands in stark contrast to what’s happening in Saskatchewan.
In that Prairie province the government of Premier Brad Wall announced on Tuesday what he called the largest single-year income tax reduction in provincial history.
That will mean a tax saving of $440 per individual or $1,320 for a working family with two children. The move will drop an estimated 80,000 people from the provincial tax rolls.
Last night, B. C. Premier Gordon Campbell was expected to deliver a state of the province’s economy address in Victoria and expain how his government will undertake to weather the global financial storm.
