(Adds details on forecasts)
OTTAWA, Nov 26 (Reuters) - The Ontario government said on Thursday it expects a smaller budget deficit in the current fiscal year than previously anticipated, helped by the initial public offering of utility Hydro One Ltd.
Canada's most populous province expects to run a deficit of C$7.52 billion ($5.66 billion) in the 2015-16 fiscal year, its Liberal government said in a budget update, down from the C$8.5 billion deficit it had estimated in its April budget.
Ontario, which accounts for about 40 percent of Canada's economy, is now forecasting a deficit of C$4.5 billion for 2016-2017, slightly smaller than what was forecast in April, and promises to have a balanced budget in 2017-18.
Non-tax revenue for the current fiscal year, including the net revenue from the initial public offering of Ontario power distributor Hydro One, is projected to be about C$1.1 billion higher than forecast in the 2015 Budget.
Ontario's net debt is expected to be C$298.3 billion at the end of the current fiscal year, compared to April's forecast of C$298.9 billion.
$1 = 1.3284 Canadian dollars Reporting by Leah Schnurr; Editing by Sandra Maler and Paul Simao