Ontario says still on track to balance budget

Thu Nov 18, 2010 2:27pm EST
 
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By Claire Sibonney

TORONTO (Reuters) - Ontario, Canada's most populous province, is still on track to balance its budget by 2017-18 as its export-oriented economy recovers from a deep recession and record high deficits, its government said on Thursday.

Ontario's Liberal government said in its economic update that its deficit targets for fiscal 2011-12 and 2012-13 were unchanged from its March budget. It had said on Tuesday its 2010-11 deficit would come in C$1 billion ($980 million) lower than forecast at C$18.7 billion.

The province raised its growth forecast for 2010 to 3.2 percent from 2.7 percent seen in the March budget. But it cut its 2011 growth forecast to 2.2 percent from its earlier 3.2 percent projection.

The update on Thursday included a renewal of a deal with land registry operator Teranet and its owner Borealis Infrastructure that will generate a C$1 billion upfront payment to the province.

Ontario said it will use the funds to reduce its 2010-11 borrowing requirement.

Ontario is now set to borrow C$38.7 billion in 2010-11, compared with C$39.7 billion forecast in the March budget. It also outlined a plan to increase the amount of debt issued domestically to 60 percent, compared to just more than half that was expected in the spring.

The government confirmed it would provide a 10 percent discount in electricity prices for consumers starting January 1. But over the next five years, residential electricity prices are expected to rise by 46 percent.

($1=$1.02 Canadian)

(With additional reporting by Jennifer Kwan; Editing by Jeffrey Hodgson)