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Ontario’s budget deficit forecasted to last until 2028-29
The province’s financial watchdog says it will take several years before Ontario manages to balance the budget.
According to Ontario’s Financial Accountability Office (FAO), government spending is on track to outpace its revenues for the next five years.
It’s a two-year discrepancy compared to the numbers outlined by the current government’s fiscal plan.
The province’s fiscal outlook has significantly changed between the 2023 and 2024 budgets, with the deficit more than doubling for the 2023-24 years.
The province’s fiscal outlook took a sudden and significant turn after the 2024 budget was released, with the once modest projection of a $200 million surplus being replaced by a forecasted $9.8 billion deficit for 2024-25.
When compared to its winter analysis, the FAO says the two biggest decreases that have affected its latest forecast stem from lower-than-expected corporate tax revenue and a $1.5 billion decrease from provincial revenue streams such as the Liquor Control Board of Ontario (LCBO), Ontario Power Generation, and the Ontario Lottery and Gaming Corporation.
Looking ahead, the FAO’s biggest concerns about future outlooks revolve around the uncertainties of the global economy.
“Multiple ongoing geopolitical conflicts and periodic shipping disruptions are downside risks to recovery in global trade and international investment,” reads the report. “Key elections in over 50 countries in 2024[16] also adds uncertainty to future international relations and trade policies.”
The next FAO Economic and Budget Outlook will be published in the Fall.
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