TD Economics provides the following highlights of the of the 2014 Ontario Budget
• The Ontario government expects to post an $11.3 billion deficit (1.6% of GDP) in fiscal 2013-14, slightly lower than the $11.7 billion shortfall projected in last year’s budget.
• The government has raised its near-term deficit targets. Red ink of $12.5 and $8.9 billion are anticipated over the next two years, respectively, some $1.5-$2.5 billion higher than shown a year ago.
• Thereafter, stronger economic growth is expected to help the Province ride to a balanced budget by fiscal 2017-18 – identical to last year’s objective.
• The net debt-to-GDP ratio is projected to reach a high in fiscal 2015-16 at around 41%, then to edge lower beginning in fiscal 2016-17.
• A $29 billion transportation infrastructure plan, a proposal for a new Ontario pension plan, a new Jobs and Prosperity fund and support for low-income families formed the core of today’s budget. That said, with underlying restraint still the catch phrase, program spending growth is planned to be held to a very lean 1.1% per year on average through fiscal 2017-18.
• In order to fund initiatives and bring the deficit down, the government announced a string of new revenue measures, including tax hikes on higher-income individuals, tobacco and aviation fuel. Sales of some public assets were also confirmed, which will provide one-time benefits to coffers.