Ontario’s Path to Balance
The government is committed to eliminating the deficit by 2017–18 in a way that is both fiscally responsible and fair. Eliminating the deficit in this way will create a more prosperous Ontario. The government has already been able to demonstrate significant progress towards meeting this commitment and it is taking additional steps to ensure its achievement.
The deficit for 2012–13, the fiscal year just ended, is now estimated to be
$9.8 billion — a $5.0 billion improvement compared with the 2012 Budget forecast. This marks the fourth year in a row that the Province has reported a deficit lower than forecast — the only government in Canada to achieve this level of success.
As a result, the Province’s accumulated deficit is now almost $22 billion lower than it would otherwise have been had the government not beaten its fiscal targets in each of the past four years. Net debt‐to‐GDP, at 37.5 per cent in 2012–13, is almost two percentage points lower than the 39.4 per cent forecast at the time of the 2012 Budget.
Ontario is currently one of only two governments in Canada that is on track to beat its fiscal target for 2012–13. These results are due to the government’s focus on deficit elimination by 2017–18 — a commitment that is reinforced by the goal of reducing net debt‐to‐GDP to the pre‐recession level of 27 per cent once the budget is balanced.
Moving forward, the Province is on track to continue beating its targets.
For 2013–14, the deficit projection of $11.7 billion is more than $1.0 billion ahead of the $12.8 billion deficit forecast in the 2012 Budget. Beyond 2013–14, the government is on track to meet the steadily declining deficit targets outlined in the 2012 Budget and to return to balanced budgets beginning in 2017–18.
2009–10 2010–11 2011–12 2012–13 2013–14 2014–15 2015–16 2016–17 2017–18
Fiscal Forecast2 Performance1 Actual
(13.3)
Ontario’s Plan to Eliminate the Deficit
CHART 1.22
Interim Plan Medium-Term
Outlook Extended
Outlook
1Represents current forecast for 2012–13 to 2017–18. For 2009–10 to 2011–12, actual results are presented.
2Forecast for 2010–11 to 2013–14 based on the 2010 Budget. Projection for 2009–10 from the 2009 Ontario Economic Outlook and Fiscal Review.
Managing the growth in program spending will continue to be a key component of the Province’s fiscal plan moving forward. Program spending in 2013–14 is unchanged from the 2012 Budget projection. Between 2012–13 and 2017–18, program spending is projected to grow at an average annual rate of less than 1 per cent.
Total expense is projected to be lower in each and every year compared to the projection in the 2012 Budget. This reflects the government’s ability to effectively manage growth in program spending and lower interest on debt expense.
Actions to Eliminate the Deficit
The government’s proven track record of beating its deficit targets is underpinned by concrete actions that will continue to generate results. Many of these actions stem from specific recommendations of the Commission on the Reform of Ontario’s Public Services.
Ontario Is Projected to Have the Lowest Program Spending Per Capita in 2012–13
CHART 1.23
Note: Some provinces’ figures have been adjusted to improve comparability.
Sources: Provincial Budgets and Ontario Ministry of Finance.
5,000 7,000 9,000 11,000 13,000 15,000
ON BC NS QC NB PE SK AB MB NL
$ Per Capita
These and other actions will help the government control the rate of growth in program spending in a way that is fair and balanced, while also ensuring the integrity of Provincial revenues to fund public services and infrastructure.
Key actions include:
► Moving forward with a plan to transform public services by changing the way programs and services are delivered to give the people of Ontario better value for money and results. The government will continue to transform and modernize the delivery of programs and services in the most efficient and effective manner.
► Further integrating recommendations from the Commission on the Reform of Ontario’s Public Services into government plans by continuing to move forward with 60 per cent of the recommendations this year, while continuing to study the remaining recommendations.
► Continuing to restrain compensation and achieve collective agreements that control public‐sector compensation costs. All public‐sector partners will need to continue to work together to effectively manage future compensation costs within Ontario’s existing fiscal framework, which includes no funding for incremental compensation increases for new collective agreements. Ontario’s recent public‐sector settlements are below the average of those in the private sector, municipal sector and federal public sector.
► Reaching agreements with all four of the jointly sponsored pension plans (JSPPs) consolidated in the Province’s financial statements to protect taxpayers from higher contributions while ensuring long‐term sustainability of the plans.
► Encouraging public‐sector, single‐employer pension plans to adopt changes that improve sustainability in exchange for temporary solvency funding relief.
► Encouraging public‐sector pension plans to work towards equal cost‐sharing and explore more sustainable models such as JSPPs.
► Building on the recommendations of Bill Morneau, the government’s Pension Investment Advisor, introducing a pooled asset management framework for
► Establishing a technical panel to identify savings in Ontario’s business support, including refundable tax credits, to ensure they are efficiently achieving desired outcomes.
► Collaborating with the federal government to enhance compliance activities to address corporate tax avoidance and the underground economy.
► Income‐testing of the Ontario Drug Benefit program, effective August 2014, that will require high‐income seniors to pay a larger share of their prescription drug costs.
► Reviewing programs, including the Ontario Clean Energy Benefit, tax assistance, and other direct supports, to ensure that they are fair and affordable.
► Proceeding with the centralization of the collection of outstanding tax and non‐tax accounts within the Ministry of Finance and using a range of collection
Outlook Extended Outlook 2014–15 2015–16 2016–17 2017–18 Revenue 114.2 116.8 120.5 124.9 130.1 134.4
Note: Numbers may not add due to rounding.