Ontario Finance Minister Dwight Duncan released updated deficit figures on Monday. (Canadian Press)

Ontario's Liberal government ran a smaller deficit in 2009-2010 than predicted, but its debt is still well over $200 billion.

Figures released Monday show the province was $19.3 billion in the red during the year — more than $2 billion below what was forecast in the budget last March.

The province's finance ministry said the numbers are mainly due to spending cuts and better-than-expected economic growth.

However, tax revenues were $6.4 billion below budget forecasts, reflecting the lagging impact of the recession and a weaker-than-expected economic performance.

Overall, the province's debt grew by $35 billion to a record $212.1 billion in 2009-10.

Despite the improvements, Finance Minister Dwight Duncan said Ontario will not return to balanced budgets for another seven years.

"I've not got solid numbers upon which I can make those predictions right now, and frankly, having been finance minister through 2008 and 2009 I've learned perhaps better than most how volatile revenues can be," the minister told reporters at Queen's Park.

The 2010 budget set out a timetable to eliminate the red ink and return Ontario to balanced books by 2017-18.

"We laid out a very cautious approach to [reducing the deficit]," said Duncan.

Worried by numbers

Conservative MPP Garfield Dunlop is worried about the numbers.

"It's putting us very close to this government doubling its accumulated debt in its term of office, and I don't think that's good news for citizens of the province of Ontario," said Dunlop.

Ontario's debt was $138.8 billion in 2003-04, the Liberals' first full year in office.

Duncan defends his deficit spending as a needed economic boost.

"While there are signs of positive economic growth in Ontario, we will continue to monitor the economic situation around the world," he said, suggesting a slump in the U.S. economy would have a detrimental impact in Ontario.

"In finance terms there are clouds on the horizon. The U.S. economy has markedly slowed since June again and there's increasing angst about that," he said.

Ontario's real gross domestic product shrank by three per cent in 2009.

Total provincial expenses for the year were $115.1 billion, just slightly below budget predictions.

Duncan is still projecting a deficit for the current fiscal year of more than $19 billion.

With files from The Canadian Press