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Ontario on track to balance budget by 2023-24, financial watchdog says

Ontario's financial watchdog says the province is on track to balance the budget by 2023-24 and run a $7.1 billion surplus three years later.

Financial Accountability Office says Ontario will run a $7.1B surplus 3 years later

The FAO projects the 2021-22 deficit to be $8.7 billion, below the $13.1 billion that the government forecasted when Finance Minister Peter Bethlenfalvy released the third-quarter finances earlier this year. (Richard Agecoutay/CBC)

Ontario is currently on the path to balance by next year, the province's fiscal watchdog said Tuesday, but it could well take a different route due to the looming June 2 election.

A report from the Financial Accountability Office said the province posted a $16.4-billion deficit in 2020-21 due to COVID-19 spending, and Ontario is now seeing strong revenue growth that will outpace program spending.

The province is on track to balance the budget by 2023-24 and run a $7.1-billion surplus three years later, "under current policies," the report said.

But current policies may not be current much longer. A new party could be in power after the June 2 election, and even if the Progressive Conservatives win re-election, they have not yet presented this year's budget, so it's unclear when they will seek to balance it.

A spokeswoman for Finance Minister Peter Bethlenfalvy said the budget, set to be delivered this month, will include "an updated path to balance."

"This government continues to spare no expense in the fight against the global pandemic, making investments to protect people's health and the economy," Emily Hogeveen said in a statement.

"Looking ahead, Ontario has a plan to bring jobs and growth to the entire province by making key investments in our healthcare and education systems, building highways and expanding access to broadband."

FAO projects 2021-22 deficit to be $8.7B

NDP Leader Andrea Horwath said Premier Doug Ford may use the fiscal room to entice voters with pre-election "gimmicks," as she said he has already started doing. Refund cheques for licence plate renewal fees have recently landed in mailboxes across the province in a move that will cost $1.1 billion a year in lost revenue.

The FAO said that announcement, plus others made up to March 28, such as removing tolls on Highways 412 and 418 and a federal transfer to help clear surgical backlogs, were factored into its projections.

Horwath said her priority will be investing in services.

"My priority will be making sure that all of the things that COVID showed us were broken, get fixed," she said. "People deserve a health-care system that they can rely on, an education system that actually functions for our kids."

Liberal house leader John Fraser said it's good to have a plan to get to balance, but it's important to properly fund programs that help people.

"You can't let your path to balance actually mess up the ledger sheets of individual Ontario families," he said.

Green Party Leader Mike Schreiner said the FAO report suggests Ford is going to cut his way to balance.

"Ford's cuts to balance the budget is only going to widen the cracks in the foundation of Ontario that will reveal during the pandemic," Schreiner said. "We cannot cut our way to prosperity because the people of Ontario need strong public services: health care, education and other services."

The FAO projects the 2021-22 deficit to be $8.7 billion, below the $13.1 billion that the government forecasted when Bethlenfalvy released the third-quarter finances earlier this year.

The budget watchdog also projects that program spending will grow by an average of 3.6 per cent a year from 2020-21 to 2026-27, higher than in previous years, partly due to spending commitments for long-term care and child care.

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