Ontario's finance minister said Friday the province's surplus for the 2006-2007 fiscal year is $2 billion more than he predicted in his spring budget.

Greg Sorbara said the government has used the $2.3 billion in extra funds to pay off some of the provincial debt.

Ontario Finance Minister Greg Sorbara says the government has used the extra funds to pay off some of the provincial debt.
(Jonathan Hayward/Canadian Press)

He credited increased transfer payments from the federal government and higher-than-expected tax revenues for the surplus and said it represented the government's second consecutive balanced budget.

First-quarter results for the 2007-08 fiscal year show the government is also $400 million ahead of projections so far, he noted.

Despite all the extra cash, Sorbara said there won't be a bailout for Toronto or a reduction in the health tax, which was brought in after the Liberals promised in the 2003 election not to raise taxes.

"There will be some people in the province that will say, 'You know what? I don't care about our schools. I don't care about health care, I'm in good health. All I want is money back from the government,' " Sorbara said.

"I think we were elected on a mandate that said we want better public services."

But Progressive Conservative Leader John Tory questioned the timing of Sorbara's announcement and said the government's numbers must face more scrutiny.

He also called on Premier Dalton McGuinty to place a moratorium on the Liberal government's recent spending announcements until after the election campaign.

"It seems these days that there's magic McGuinty money falling from the sky," Tory said in a release, adding Sorbara now has no excuse not to begin eliminating the controversial health tax.

Sorbara said the health tax will be reviewed in 2009.