Ontario may shed budget deficit early: Duncan

Fri Dec 10, 2010 11:55am EST
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By Claire Sibonney

TORONTO (Reuters) - Ontario may eliminate its massive deficit before its 2017-18 target if the economy delivers solid growth and the budget is prudently managed, the Canadian province's finance minister said on Thursday.

"There is more likelihood right now. But again I did not amend the plan or the times around the plan because of uncertainty, particularly in the U.S.," Finance Minister Dwight Duncan he told Reuters in a phone interview from New York.

"We've laid out what we think is a very reasonable plan and my hope is that we will continue to exceed our deficit reduction targets on an annual basis."

Canada's most populous province last month maintained near-term deficit targets but lowered its 2010-11 deficit forecast by C$1 billion ($990 million) to C$18.7 billion.

Duncan, in New York to tout the province's merits to international investors, also said the city of Toronto would be on the hook for financial penalties if new mayor Rob Ford breaks contracts by scrapping a multibillion dollar public transit plan.

"That would be the responsibility of Toronto. But hopefully the mayor seems confident that those penalties can be dealt with in the context of investments in subway versus the LRT (light rail transit)," Duncan said.

"We'll continue to work with the municipality as we move forward."

He rejected the idea that the city would have to repay investments already made by the province toward the plan.   Continued...