Ontario’s Progressive Conservative government tabled a nearly balanced budget Thursday without any flashy new promises.
Finance Minister Peter Bethlenfalvy’s fiscal plan projects a $1.3-billion deficit for 2023-24, the fiscal year that begins April 1, followed by another modest deficit and then a surplus in 2024-25.
“To be clear, a return to balanced budgets would not have happened under a Liberal or NDP government, but it is happening under our government,” said Bethlenfalvy in his budget speech. “And in this budget, we are showing it is possible to balance a budget while investing more in housing, more in highways, more in transit, more in the skilled trades, more in new manufacturing, more in health care, more in education, more in the North.”
But the opposition parties at Queen’s Park denounced the budget as insufficient for struggling Ontario families.
“People today are feeling squeezed with the rising cost of living and this government, and this budget, has nothing meaningful to offer,” said NDP leader Marit Stiles.
“I’ve never seen a government so gleefully celebrating mediocrity,” quipped her finance critic, Catherine Fife.
Interim Liberal Leader John Fraser put it this way: “Ontario families, they’re not feeling the balance.”
It “fails to deliver the bare minimum,” according to Green Leader Mike Schreiner.
The province plans to spend $205 billion in 2023-24, up marginally from the $203 billion it spent in 2022-23. That includes a wind-down of $7.8 billion in one-time COVID-19 expenses that will be either discontinued or factored into ministries’ base budgets going forward.
Over that same time span, revenues are expected to rise from $200 billion to $204 billion.
Economist Mike Moffatt, a senior director at the Smart Prosperity Institute and an assistant professor at Ivey Business School, told The Trillium it amounts to a spending cut when population growth and inflation are factored in.
“Overall, this is a pretty austere budget,” he said.
When The Trillium asked about that characterization, Bethlenfalvy said he believes it means he “got the balance pretty well right” as other media questions noted it is the province’s highest-spending budget on record.
Moffatt also said Bethlenfalvy’s “prudence” means the province is in a better fiscal position than its headline deficit number of $1.3 billion suggests.
The budget is based on economic assumptions that are more conservative than those of private-sector economists, and the $1.3-billion deficit figure includes a $4-billion contingency fund and a $1-billion reserve that may never be spent.
“I think the government's trying to avoid showing that they're in a balanced budget position,” Moffatt said, adding that might be “a negotiating position or way to illustrate the need for spending restraints” on the part of the government.
Bethlenfalvy did not deny that his plan is built on cautious assumptions and, in fact, touted the “prudence” of his budget three times in English and once in French in his budget speech at Queen’s Park.
The Ford government is also on track to beat its deficit projection for 2022-23 by a whopping $17.7 billion, thanks to the economic upheaval over the last year that married higher-than-expected inflation and a stronger-than-expected economic performance to boost revenues by more than $20 billion over projected.
The deficit for the 2022-23 fiscal year, concluding at the end of March, is now projected to be $2.2 billion, with $1.75 billion in contingency funds that remain unspent.
The government is planning to review its taxation system, the budget notes.
The review will be done “in a more rigorous way” than normal, making sure the tax system is meeting the government’s policy goals, according to Bethlenfalvy. The finance minister said he would not prejudge the outcome of that process by saying what changes he would like to see as the province moves toward a surplus, according to his plan.
The next election is scheduled for the spring of 2026.