Lakehead University's Livio di Matteo has a great article on the Ontario deficit which is well worth reading. Considering the claim by the Liberal Ontario government that the provincial budge will be balanced by 2017-2018, Matteo goes through what the latest Ontario budget numbers are:
"According to the review, between 2013-14 and 2017-18, total
expenditures (including the reserve) are expected to rise from $126.4 to
$134.5 billion - an increase of 6.4 per cent. Meanwhile, revenues are
expected to rise from $115.9 to $134.5 billion - an increase of 16 per
cent.
For Ontario, the heavy lifting
needed to balance the budget was obviously expected to come from the
revenue side, with expenditure restraint playing a minor role. Over a
four-year period, this translates into average annual expenditure and
revenue growth of about 1.6 and 4 per cent respectively. These figures
can also help us assess the performance to date. Between the actual
results for 2013-14 and the current outlook for 2014-15, are
expenditures up by 1.6 per cent or less? Are revenues up by 4 per cent
or more?"
Those are some interesting numbers and considering recent government actions and economic numbers it is good that someone has taken the trouble to look at the up to date numbers:
"Let’s look at the spending picture first. Despite some savings that
have apparently been found in terms of program review and year-end
savings totalling about $1.3 billion, total expenditures are still up by
3 per cent - rising from $126.4 to $130.2 billion. If spending
continues to grow at 3 per cent, it will reach $142 billion dollars by
2017-18, substantially above the current budget plan.
Spending has grown at about double the rate
needed for Ontario to be on track to meet its deficit target. Across the
vast pantheon of ministry expenditure categories, only three have seen a
decline - Tourism, Culture and Sport (-7.6 per cent), Natural Resources
(-0.9 per cent) and the Attorney General (-2.1 per cent). The remainder
all grew, with rates ranging from a low of 0.6 per cent for Citizenship
and Immigration to a high of 83.9 per cent for Infrastructure. Even the
Ministry of Government Services will see an increase from $728 million
to just over $1 billion in spending — an increase of 31 per cent!
Of course, the key categories are
the big-ticket items of Health, Education and Social Services, which
together account for two-thirds of provincial government spending. Over
the course of a year, Health grew at 2.3 per cent, Education at 5.1 per
cent and Social Services at 7.9 per cent. On the expenditure side, it
would appear the first year of moving towards a balanced budget by
2017-18 has missed the expenditure growth target by a fair amount."
I think the most salient information here is that the big ticket Health and Education budgets have increased a lot compared to what is required to balance the budget. Although I am impressed that Health only increased by 2.3%. I think it is a little odd that Education increased by so much. Perhaps that has something to do with the rollout of full day junior kindergarten. On the revenue side things aren't looking great either:
"How about revenues? Between 2013-14 and 2014-15, total revenues rose
from $115.9 billion to $118.4 billion - an increase of only 2.1 per
cent. Overall, revenues have grown at about half the average rate
Ontario needs to meets its goal of a balanced budget by 2017-18."
I'll be curious to see what the final numbers are on the 2014-2015 deficit. The province has a pretty big reserve baked in, so perhaps they can claim that they made their numbers, but with these big spending increases things aren't looking good. Maybe they will include the recent GM share sale proceeds into the budget as revenue.
The 2015-2016 budget isn't looking great either. Don't expect the Toronto Star or Martin Regg Cohn to point out these numbers
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