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The Windsor Star
Thu 23 Oct 2008
TORONTO – Ontario’s Liberal government downgraded its growth forecasts, cut some spending commitments and will run a $500-million deficit, Finance Minister Dwight Duncan said Wednesday.
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 at Queen’s Park.
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 per cent growth rate has been slashed to 0.1 per cent.
In response, 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,” Duncan said in a speech to the assembly. “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,” 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 said they were disappointed with 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 prepared statement.
Canadian Union of Public Employees Ontario President Sid Ryan 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 Ryan, who represents 225,000 workers in the public sector.
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 on Wednesday.
– 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.
