Queen’s Park projects $6.5-billion deficit, higher tax revenues in 2022-2023

Queen’s Park projects $6.5-billion deficit, higher tax revenues in 2022-2023


Queen’s Park projects $6.5-billion deficit, higher tax revenues in 2022-2023's Profile

The Ontario government is projecting a deficit in the 2022-2023 fiscal year, although the newest figure is less drastic than a previous estimate.

According to Wednesday’s Third Quarter Finances report, the deficit will be $6.5-billion (improved from the $12.9-billion projected in the fall fiscal update).

This still differs from the $2.5-billion projected last week by the Financial Accountability Office (FAO).

Officials note Wednesday’s estimate is due to higher-than-expected revenues, driven by taxes. At $196.4-billion in 2022-2023, revenues will be $9.6-billion higher than projected in the fall fiscal update.

However, at $188.6-billion, overall program expenses are projected to be $3.4-billion higher than previous forecasts. Regarding the difference from the fall report, officials cite one-time costs relating to ongoing land and land-related claims with Indigenous communities. Other listed factors include COVID-19 pressures on the City of Toronto, the re-opening of college campuses and health measures in long-term care homes.

The interest on provincial debt is projected around $13.4-billion, which is slightly lower than previous estimates. Due to a rise of interest rates, Ontario’s cost of borrowing has risen to 4.0 per cent.

Ontario’s real gross domestic product (GDP) rose by around 3.7 per cent in the 2022 calendar year.

“While today’s update is positive, Ontario and the rest of the world continue to face ongoing economic and geopolitical uncertainty,” said Finance Minister Peter Bethlenfalvy. “Though the road ahead may not be easy, our government’s Plan to Build is a responsible and prudent approach to getting Ontario through the challenges of today while planning for tomorrow.”

The province’s opposition has criticized the report.

“Budgets are about priorities,” said NDP Finance Critic Catherine Fife. “It’s clear from today’s fiscal update that the government has the resources and ability to invest in Ontarians and is deliberately and callously choosing not to.”

“Over the last few weeks, my colleagues and I have travelled across the province for pre-budget consultations, listening to what people and organizations need from this government,” continued Fife. “People and communities are suffering under immense pressure from a critical lack of support and resources. New Democrats are calling on the government to stop this deliberate underspending, and invest in services that Ontarians rely on, like fixing the healthcare crisis, investing in our schools, or paying public sector workers a fair wage.”

The next financial update will be part of the 2023 budget, which will be released on or before March 31.

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