Ontario forecasts three years of balanced budgets

Tue Mar 25, 2008 4:35pm EDT
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By Lynne Olver

TORONTO (Reuters) - The government of Ontario stressed funding for skills training and infrastructure in its 2008-09 budget on Tuesday as it struggles to deal with the loss of tens of thousands of manufacturing jobs.

The fiscal plan for Canada's most populous and industrialized province projected balanced budgets in each of the coming three years, but expectations were ratcheted down from a year ago, when the government boasted of a new era of "sustainable surpluses."

For the fiscal year starting April 1, Ontario said it sees a balanced budget with a reserve of C$750 million ($737 million). If that reserve is not needed to cover surprises, it could result in a surplus.

"We have laid out a plan over the next three years which does not contemplate deficit," Ontario Finance Minister Dwight Duncan told reporters.

He acknowledged several difficulties facing Ontario, including the slowing U.S. economy, high oil prices and the strong Canadian dollar, but said those had been taken into account in the fiscal plan's "prudent" assumptions.

"We have the plan to respond to whatever transpires in the coming year, we have the flexibility within the plan to make adjustments to any contingency that could happen," Duncan said.

Against a backdrop of slowing economic growth, the budget proposes no new taxes, and little in the way of tax cuts.

Instead, it focuses on a C$1.5 billion three-year training plan to improve skills so that more Ontario residents can find jobs or make the transition to new careers. It also earmarks C$1 billion in new funding for municipal infrastructure, which is included in the current fiscal year.   Continued...

<p>Liberal Party members applaud Finance Minister Dwight Duncan (R) as Duncan tabled the 2008 Ontario provincial budget in Toronto March 25, 2008. REUTERS/ Mike Cassese</p>