Ontario Finance Minister Dwight Duncan credits reduced spending and improved corporate tax revenues for a drop in the deficit. (Chris Young/Canadian Press)

Ontario's projected deficit for 2010-11 has been reduced to $18.7 billion.

Finance Minister Dwight Duncan said Tuesday that's a 25 per cent reduction from last fall, when the deficit was $24.7 billion.

Duncan credits improved corporate tax revenues and reduced spending for the big drop in the deficit.

But it's a smaller drop compared to numbers Duncan released in the summer. In a July update, Duncan pegged the deficit at $19.7 billion.

Meanwhile, the opposition parties say the implementation of the 13 per cent harmonized sales tax on July 1 was the big revenue generator for the Liberal government.

Duncan insists the increased revenues from the HST are offset by the personal and corporate tax cuts the government introduced this year.

The finance minister released the deficit figure in advance of Thursday's fall economic update, which is also expected to include some sort of relief from soaring electricity bills.

With files from CBC News