Provincial funding for Toronto's Luminato festival is to be cut by $3.5 million over the next two years.

Festival organizers were expecting to receive $4 million from Ontario next year and $4.5 million in 2014.

Instead, the province will now commit to $2.5 million for each of 2013 and 2014 and there have been no discussions around funding beyond 2014, according to Luminato associate director of government relations Bradley Lepp.

The provincial budget, handed down by Finance Minister Dwight Duncan on Tuesday, also targets a number of the province's cultural institutions, including the Art Gallery of Ontario, the Royal Ontario Museum, the McMichael Canadian Art Collection, and the Royal Botanical Gardens in Burlington, Ont.

Funding for these institutions will be cut by one per cent this year and two per cent the following year.

The Ontario government is facing a deficit of $15.3 billion for the coming year. The funding cuts are part of a provincewide strategy to balance Ontario's books in five years.