Has the 2014-2015 Ontario Deficit Increased from the Previous Year? Media Silent

The 2014-2015 Ontario fiscal year ends tonight. The deficit was originally sort of predicted at $12.5 billion. What I mean by sort of is that the province makes a prediction for revenues and expenses and now tacks a couple of billion on to the expenses as a contingency fund. To be fair the feds have being doing that since the Chretien days so it isn't too weird.

However what it often allows the province to do is as the numbers firm up and the deficit is closer to their original prediction rather than the original prediction plus the extra couple of billion, is say the province beat their prediction. Which obviously really isn't the case.

Now the Sousaphone, minister of finance Charles Sousa has said that the deficit is more likely to be $10.9 billion as quoted in this Toronto Star article. So fantastic, they beat their watered down prediction. Makes for good news.

But hold on. Anyone can make a prediction they know they will likely beat. What about say, how the deficit for fiscal 2014-2015 compares to the previous year? That's not mentioned anywhere in the article. Thanks Robert Benzie, Queen's Park Bureau chief for the Star.

I'm going to a more careful search of what exactly the 2013-2014 number was, but this Studio 2 article mentions that it was only $10.5 billion:

"For the most recently concluded fiscal year, 2013-2014, the province got the deficit down to $10.5 billon, but it's projected to go back up to $12.5 billion this year." 

So it was commonly known that the deficit would probably increase, but nobody would mention in the articles about this year's deficit that it increased. Considering that the Liberal government is claiming that the deficit will be eliminated by the 2017-2018 budget, one would think the trend is important. What about the 2012-2013 number? That might be interesting too.

When the more up to date numbers come out it will be interesting to see how the expenses and revenues differed from the previous fiscal year.

 

Ontario Finance Minister Sousa: Ontario's GDP Growth Next 20 Years Sucky, Deficit Slightly Down?

Ontario Finance minsiter Charles Sousa (any relation to John Philip?) spoke today about Ontario's finances. The Star has a recount of the event here. Noteworthy was this:

"It cites an aging population and slower expansion of the workforce, which “may restrain future economic growth in the absence of significant productivity improvements.”

“The report indicates the need for consistency, predictability and steady hands,” said Sousa, who is to table a budget in May that could trigger a June election.

The economic outlook calls for an average of 2.1 per cent annual growth in real GDP through 2035."

As I've previously posted, I'm shocked that anyone is shocked that Ontario is going to have low GDP growth in the future. Historically, Ontario hasn't had good GDP growth since the Harris years and this prediction is more of the same. I was a little surprised by this quote:

"Despite a growth prediction that barely exceeds inflation, Sousa maintained that the provincial budget will be balanced by 2017-18.

He is to deliver a revised deficit figure on Thursday that will be slightly lower than the $11.7 billion forecast."

Getting to zero deficit by 2017-2018 to me seems very difficult at this point in time, with stagnant GDP growth and rising health costs. Sousa most likely isn't going to be around for that budget so I guess he can say what he wants. I'm assuming that the $11.7 deficit figure refers to the fiscal year that just finished a couple of days ago. I'm a little surprised it doesn't come in higher than predicted, although lately the provincial government has been giving worse predictions for the budget and then beating them slightly, which would appear to be the case here. 

This finance ministry document has some relevant data which shouldn't disappear into the memory hole. The 2012-2013 interim deficit was 9.8 billion, with the 2013-2014 deficit estimated at 11.7 billion, with further predictions of 10.1 for the 2014-1015 fiscal year and then predicted deficits of7.2, 3.5 in future years and a surplus of 0.5 billion in the 2017-2018 fiscal year.

One interesting thing about those deficit predictions is that a reserve was introduced in the 2013-2014 fiscal year prediction. For 2013-2014 year the reserve was 1.0 billion with reserves of 1.2, 1.2, 1.5,  and 1.5 in future years. So in actuality the predicted deficit for 2013-2014 is really 10.7 billion. So if the 2013-2014 deficit is announced at more than 10.7 billion it is actually worse than predicted. For 2014-2015 the actual predicted deficit is 8.9 billion, followed by 6.0 billion, 2.0 billion and then a surplus of 2 billion in 2017-2018.

Other data is provided in the finance ministry document. Program spending interim for 2012-2013 is 113 billion, and estimated at 117.0 billion for 2013-2014. Future years have program spending estimates of 118.3, 118.8, 118.8 and 118 billion in 2017-2018. You'll notice that for four years in a row spending is predicted to be flat. That seems incredibly unlikely, especially considering recent spending increases like the OPP's 8.5% pay increase effective January 1st 2014.

Income information is also specified. For 2012-2013 the income was 114.2 billion and then estimated at 116.8 billion for 2013-2014. For following years the income estimates are 120.5, 124.9, 130.1 and 134.4 billion in 2017-2018.  It should be interesting to see what program spending ends up coming in at for 2013-2014 and what the prediction is for 2014-2015.