Ontario's GDP Drops 0.3% in Second Quarter 2011

Well the GDP number for the second quarter in Ontario is out (fortunately for Dalton McGuinty the number comes out after the election), and as was predicted by many, including Surly Hamiltonian it is not good at -0.3% (annualized rate -1.3%). That's not going to be good for government revenue or the deficit for the 2011-2012 fiscal year (which starts in the second quarter).

Amusingly the gnomes in the Ontario finance department were crowing earlier this year about possible growth of over 3% in 2011. Looks like that won't happen now with first quarter growth being 0.8% in 2011.

This is going to cause problems for the premier's spending plans after the election. With some public sector salary increases still locked in for this fiscal year (teachers and doctors I'm looking at you), the situation isn't going to be pretty.