Ontario sees years of deficits as recession bites
By Frank Pingue
TORONTO (Reuters) - The province of Ontario, the country's manufacturing heartland, will be forced to run "significant" deficits for years to come as the global recession takes its toll, its leader said on Tuesday.
Ontario Premier Dalton McGuinty, meeting reporters after a luncheon speech in downtown Toronto, would not specify how long the province's finances will be in the red given the uncertainty about when the economy will start growing again.
"It's really hard to tell how long it will be before the world comes out of this recession, and it's equally difficult to tell how long it will be before Ontario, and Canada generally, come out of this," McGuinty said.
McGuinty also steered away from specifying how large of a deficit he was willing to take on, but did say he would not want to "go so high that it will unduly hurt us tomorrow."
He warned the province may need to slow down spending increases on new initiatives to ensure it doesn't go too deeply into the red.
The Ontario government said in October that it expected to swing from a budget surplus to a deficit of C$500 million ($407 million) in the fiscal year ending March 31, 2009.
Ontario's economy relies heavily on exporting automobiles and auto parts, so a slowdown in the U.S. economy has been a blow to growth. The province shed 65,000 jobs during the last three months of 2008.
McGuinty took companies to task for not doing enough to spur growth, saying they were not making investments in Ontario similar to what they are doing in the United States. Continued...