Ontario’s deficit for 2022-23 falls to $18.8 billion; income and interest costs rise

Ontario’s deficit for 2022-23 will be $1.1 billion smaller than forecast three months ago, as tax revenue grew faster than rising interest costs on the province’s mounting debt.

The latest disclosure of the province’s finances shows the deficit for the year is now $18.8 billion, $1.1 billion less than Ford’s pre-election estimate.

Tax revenues increased by $1.2 billion, while the province’s $427 billion net debt service cost increased by $105 million due to higher interest rates.

Finance Minister Peter Bethlenfalvy said all of the new net income would be put against the deficit, with no new funding so far to overcome the ongoing crisis of hospital closures.

“I think it’s important that we have a prudent and flexible plan and we’ve done that in this budget,” Bethlenfalvy said.

Ontario Finance Minister Peter Bethlenfalvy introduces the budget after the Lt. Governor. Elizabeth Dowdeswell delivered her Speech from the Throne at Queen’s Park in Toronto on Tuesday, August 9, 2022. THE CANADIAN PRESS / Andrew Lahodynskyj

All spending remains unchanged from the April 28 budget that was formally reintroduced to the legislature Tuesday afternoon, except for a five percent increase in monthly payments to the Support Program for People with Ontario Disability Insurance (ODSP) promised during the election campaign and a new cash offer for parents.

The throne speech also contained a promise of more cash for parents of school-age children.

The province is earmarking $225 million to give to parents as a means to “help their children catch up” with learning affected by prolonged school closures during the COVID-19 pandemic.

Using 2021 spending estimates from similar programs, the money comes out to between $90 and $100 per child.

A finance ministry spokesman said the government is not yet sure whether the money will be given to parents in the form of a tax credit or a direct transfer, but Bethlenfalvy called it a “direct payment”.

Both new commitments will be funded from a $1 billion reserve and other contingency funds.

“Parents who know their children best can provide the kind of tutoring support their children need,” said Bethlenfalvy.

He answered repeated questions from reporters about why the ODSP rates could not be increased further given the improved fiscal outlook, given that the rate increase will still leave recipients in poverty.

“I understand that the environment is difficult and challenging, and that is why we committed to increasing it by five percent, that is why we committed to adjusting it for inflation, and we are one of only three provinces that is doing it. ”

The slump in the province’s once red-hot real estate market is also taking a toll on the province’s revenue, with land transfer tax revenue forecast to be $787 million less this year than previously forecast. end of April.

That decrease is more than offset by increased sales tax, income tax, and corporate tax revenue.

Acting NDP leader Peter Tabuns said the hospital situation and rampant inflation were serious enough that the province should have modified its budget.

“Given that inflation has skyrocketed since they were previously presented, given the depth of the (hospital) that we are facing, they should have changed the budget substantially, they needed a course correction as my colleague said.”

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