Achi news desk-
Ontario’s finance minister says the province’s $9.8 billion deficit is higher than he would “like” but is still vowing to balance the books while keeping pace with record infrastructure spending amid a predicted economic slowdown.
In a post-budget speech and fireside chat with the Toronto Region Board of Trade, Peter Bethlenfalvy offered his rationale for why he believes the deficit, outlined in the Ford government’s $214.5 billion budget, is manageable, especially given the spending that linked to construction outlined. in it.
The record-setting budget has left conservative fiscal groups grumbling about whether taxpayers are getting value for money and calling on the government to reign in spending at Queen’s Park.
Days after the budget was presented, Bethlenfalvy addressed a business crowd at the board of trade and reflected on concerns about the Ford government’s $9.8 billion deficit – a $10 billion drop from the $200 million surplus projected a year earlier.
Bethlenfalvy blamed the shortfall on the predicted economic slowdown, high inflation, higher interest rates and a million net new residents in the province which have “put pressure” on Queen’s Park.
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The 2024 fiscal plan shows that tax revenue flowing into provincial coffers is expected to be diluted during this year.
“This has led to a higher and higher deficit than I would like,” Bethlenfalvy said. “I want to remind everyone that it’s temporary.”
Bethlenfalvy, who describes himself as a “strong fiscal conservative,” defended the record spending, pointing to a metric often used to show that the state’s debt, now $414.8 billion, is under control.
“Our debt-to-GDP is below 40 (percent) after a pandemic and after an environment of interest rates and inflation we haven’t seen for a couple of decades.”
Still, the Canadian Taxpayers Federation accused the Ford government of “runaway spending” and called for a top-to-bottom review of expenses.
“We’re spending $14 billion this year on debt interest, that’s money we’re throwing out the window,” said Jay Goldberg with the Canadian Taxpayers Federation. “That doesn’t go to hospitals. It doesn’t go to education, it doesn’t go to tax cuts.”
Goldberg added: “It’s about time we get our finances in order and not waste so much sending money to bondholders on Bay Street.”
Since taking office in 2018, the Ford government has promised to balance the budget on two separate occasions but has failed both times.
In 2019, then finance minister Vic Fedeli predicted a surplus in 2023-24 of $300 million but the government ended up posting a deficit of $3 billion. Again in 2022, current Finance Minister Peter Bethlenfalvy promised to post a surplus of $200 million and is now forecasting a surplus of $9.8 billion.
The balance of the budget, the government said, would come just before the next provincial election in 2026 when the province is predicted to run a $500 million surplus.
Despite the government’s deficit record, Bethlenfalvy insisted the government is “committed” to balancing the budget.
“I am very committed to being fiscally responsible,” Bethlenfalvy told the board of trade. “I think it is fundamental for economic prosperity to have a path to balance. When you use taxpayers’ money for a multitude of reasons.”
Bethlenfalvy said most of the spending this year is on public infrastructure and it would be a “mistake” to slow construction of the subway lines, hospital infrastructure and the controversial Highway 413 despite the economic slowdown.
“There are ups and downs to economic cycles,” Bethlenfalvy said. “The worst thing you can do in a downturn in the economic cycle is to slow down your investment.”
“(The deficit) will pass, we have a path to balance, these long-term investments in real assets and infrastructure, they are going to stay for generations,” added Bethlenfalvy. “It takes grit to keep grinding away.”
& copy 2024 Global News, a division of Corus Entertainment Inc.
