Ontario posts $2.1 billion surplus despite projected deficit for fiscal year

Ontario ended its last fiscal year with a surplus of $2.1 billion, a far cry from the $33 billion deficit projected in
Budget – thanks to inflation and stronger economic growth.

The surplus, announced on Friday, came as a result of revenue that was 20 percent above expectations for the 2021 budget, largely from taxes, due to higher-than-expected inflation and nominal GDP growth more than five points above the average. private sector. Expected at budget time.

Last month, the Ford government said it was running a $13.5 billion shortfall for the 2021-22 fiscal year ending in March. Today’s surplus figure means a $15 billion difference in government net profit in just six weeks.

Finance Minister Peter Bethlinvalve said 2021-22 is an “exceptional year”.

“When we prepared our budget for fiscal year 21-22, jurisdictions around the world were still facing a lot of unknowns, and the economic impact was still uncertain,” he told a news conference.

clearer picture

“We now have a clearer picture of how the pandemic affected the economy in the previous fiscal year.”

Employment grew, consumer spending was strong, and business earnings saw solid gains, Bethlinvalvey said. He said nominal GDP growth was 11.9 percent, the strongest annual growth rate since the early 1980s.

Last year’s surplus was not indicative of expectations for this year, Bethlinvalvey said, as the numbers released on Friday are not forward-looking, but it seemed like a note of optimism. (Evan Mitsui/CBC)

Last year’s surplus was not indicative of expectations for this year, Bethlinvalvey said, as the numbers released on Friday are not forward-looking, but it seemed like a note of optimism.

“Amid global uncertainty and with the cost of living reaching levels not seen in decades, this surplus puts Ontario in a stronger financial position in the short term,” he said.

The surplus is used to reduce net debt

The surplus is being used to help reduce Ontario’s net debt, which is about $380 billion, and the government says it will temporarily halt the automatic pay increase that lawmakers are supposed to get when there is a surplus.

The government also announces an increase in the amount of money it will provide to parents through direct payment to support private lessons from 225 million dollars to 365 million dollars, but it has not yet provided any details about how this program will work except to say that applications will open next month.

“Parents play a critical role in their children’s academic journey,” said Education Minister Stephen Lecce.

“We as progressive conservatives believe that parents need more support, more direct financial support, especially in light of the continuing economic uncertainty.”

Decreased spending on education due to COVID-19

Actual government spending in the fiscal year that ended in March was $2.5 billion less than the budget spending plan, including $1.4 billion in education, which officials say is partly due to the end of time-limited COVID-19 support.

Health spending was higher than planned, mostly due to the money that went to hospitals and long-term care homes to deal with the COVID-19 pandemic and on the vaccination strategy.

Ontario spent $75.7 billion on health last year, an increase of $6.2 billion over the previous year, including $1.8 billion for COVID-19 testing and vaccination, an additional $1.6 billion for hospitals, and $1.2 billion for more health care system use such as health visits. physician, and $900 million for workforce support such as $5,000 “retention” bonuses for nurses.

Leave a Comment