Struggling Ontario delays balanced budget goal
By Claire Sibonney
TORONTO (Reuters) - Ontario's government said on Thursday it would run budget deficits most of this decade and plans to increase spending on infrastructure, healthcare and education to help offset the recent recession's impact on its export-oriented economy.
Canada's most populous province, hit hard by the global economic slowdown, said it will run a deficit of C$19.7 billion ($19.3 billion) for the 2010-11 fiscal year. The Liberal government plans to reduce that each year before balancing the budget by 2017-18, two years later than what the government projected last fall.
"We will not put job creation and economic growth at risk by cutting too soon, nor will we spend as if there is no deficit. Eliminating the deficit is important if we are going to open Ontario to new jobs and growth." Ontario Finance Minister Dwight Duncan told reporters.
Ontario's governing Liberal party, reelected with a majority in 2007, has sought to resuscitate the province's battered economy partly through spending on initiatives like green power.
Duncan said the province will spend C$13.2 billion on infrastructure in the coming fiscal year. It expects the spending on roads, transit, hospitals and schools will help contribute to job growth. The province forecast 200,000 new jobs overall will be created over the next two years.
New initiatives included more post-secondary school placements and boosting jobs and growth in Northern Ontario.
The province said its total expenses will be C$125.9 billion in the coming fiscal year, up from C$117.7 billion in 2009-10. Total program spending will rise 6.5 percent. It forecast spending will dip to C$124.1 billion in 2011-12 before resuming a steady rise.
To help contain some costs, Ontario said it is proposing reforms that would facilitate lower generic drug prices. Continued...