TORONTO (Reuters) - Ontario has cut its budget deficit forecast by 5 percent to C$18.7 billion ($18.3 billion) for the current year, citing the benefits of spending restraint and increased corporate tax revenue.
Ontario Finance Minister Dwight Duncan gave the revised forecast for the 2010-11 fiscal year to reporters on Tuesday, ahead of Thursday’s official release of the province’s fall economic statement.
A government official on Wednesday confirmed the deficit forecast had dropped from the C$19.7 billion announced in the March budget. At the time, it said the 2009-10 deficit would be a record high C$21.3 billion.
The official also confirmed a newspaper report that the Liberal government will cut power bills by 10 percent beginning January 1. Rising electricity prices have angered many voters and hurt the provincial government’s popularity.
This would result in average savings of C$150 per household annually and cost the government about $1 billion a year, the official said.
Separately, Export Development Canada forecast that as North America’s economy recovers from deep recession, Ontario -- Canada’s manufacturing heartland -- is expected to grow international exports by 14 percent in 2010 and 7 percent in 2011.
The export credit agency said this will be better than the national average. It sees Canada’s international exports rising 12 percent in 2010 and 6 percent in 2011.
Soaring demand for Canadian-made vehicles and parts is expected to boost the province’s auto sector, which comprises almost 30 percent of Ontario’s total exports, the agency said.