Ontario's deficit has narrowed to $11.3 billion for the year that just ended, about three per cent less than predicted in the 2013 budget, but the province may not be able to meet its target this year, Finance Minister Charles Sousa said Thursday.

A sluggish economy and smaller transfer payments from Ottawa means there won't be as much money in provincial coffers, he said. Revenue will be $3.5 billion lower in the current fiscal year, which started April 1, than was forecast last year.

"Our economy is growing more slowly than anticipated and less than experts expected," he said during a lunch speech to the Canadian Club of Toronto.

"Revenues are not only significantly lower than forecasted in 2010, they're even lower than we expected just last year."

Sousa said the government still plans to balance the books in 2017-18, but their roadmap may change.

"As a result of federal cuts and slower economic growth around the world, short-term deficit targets over the next year may not be met," he said.

The Liberals will preserve Ontario's cherished public services and make investments to create jobs and stimulate the economy, he said.

"We're going to continue to invest in infrastructure, we're going to continue to invest in skills and training, and we're going to maintain a very dynamic climate so that we can attract more business investments to do business here in Ontario," he told reporters.

"And in the result of that, we may not meet our short-term target. But we have a number of initiatives that's going to be coming out in the budget that'll display and highlight how and why we will, in fact, balance the books by 2017-18."

Slow growth

However, the Liberals are also predicting that Ontario's economic growth will average 2.1 per cent between 2014 and 2035, lagging behind the national or U.S. average.

Sousa wouldn't provide any details about how the Liberals will meet their deficit elimination target with a slower-than-expected economic growth and less money coming in, such as raising taxes and making spending cuts.

"What we do is we adjust as necessary," he said.

The budget could trigger an election if the minority Liberals fail to win the support of one of the opposition parties.