Ontario delays balancing books again as economic growth slows

Skip to Content News Archives Economy Defence Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Defence Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Defence Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials This advertisement has not loaded yet, but your article continues below.HomeNewsEconomyOntario delays balancing books again as economic growth slowsThe bigger deficit means Ontario plans $51.1 billion in long-term borrowing this fiscal yearAuthor of the article:“While deficits are not desirable in the long term, they are necessary in the current environment,” Finance Minister Peter Bethlenfalvy said in prepared remarks. Photo by Peter Power/PostmediaOntario continues to delay balancing its books as its economic outlook deteriorates, and now projects it won’t reach a surplus until the 2030 fiscal year.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountIn an update released Thursday, the province forecast a $16.9 billion deficit for the fiscal year that began April 1, up from the $13.8 billion projected in its budget released in March. Larger-than-expected deficits continue until 2029-30, when the government predicts a $200 million surplus.This advertisement has not loaded yet, but your article continues below.In its March budget, Ontario had already postponed balancing the books for the third year in a row.SUBSCRIBER EXCLUSIVE: FP West: Energy Insider brings you behind the oilpatch’s closed doors with exclusive insights from insiders every Wednesday morning.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of FP West: Energy Insider will soon be in your inbox.We encountered an issue signing you up. Please try againCanada has been in a trade war with the United States, its largest trading partner, since last year, which has weighed on growth. As the country’s largest economy and its manufacturing heartland, Ontario is particularly hard hit. Several of President Donald Trump’s tariffs affect critical industries in the province, such as autos and steel.The province’s update now predicts real gross domestic product growth of 0.5 per cent this year and 1.5 per cent next year, down from one per cent and 1.7 per cent, respectively, in the budget.“While deficits are not desirable in the long term, they are necessary in the current environment,” Finance Minister Peter Bethlenfalvy said in prepared remarks. “As we have shown, our government will continue investing to protect our economy.”The increased deficits are due in part to lower projected tax revenue, including from the land transfer levy as the housing market continues to slow. Ontario will also match the federal government’s expanded tax write-off for large assets, known as the productivity mega deduction, costing provincial coffers $8 billion over five years.This advertisement has not loaded yet, but your article continues below.The province is also adding $3.8 billion to its contingency fund this year to “protect key public services, address compensation-related pressures” and as a buffer while the U.S. trade war continues.This year’s projected deficit represents 1.3 per cent of GDP.The bigger deficit means Ontario plans $51.1 billion in long-term borrowing this fiscal year, $3.9 billion more than stated in March. About 63.5 per cent of its borrowing so far was in Canadian dollars. The province also estimates it’ll need more debt than previously expected for the next two fiscal years.Short-term borrowing is expected to reach $41.5 billion by the end of fiscal 2027.Economic conditions are not uniform across the country. In Alberta, the provincial government is on track for a $2 billion budget surplus in the current fiscal year, a stark contrast to its previous forecast for a $9.4 billion deficit. That turnaround is being driven almost entirely by a windfall from higher oil prices and production.We apologize, but this video has failed to load.This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.