Ontario finds $1.5 billion in budget savings

Thu Mar 24, 2011 5:34pm EDT
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By Claire Sibonney

TORONTO (Reuters) - Ontario has found C$1.5 billion in savings to help tame its budget deficit in coming years, but it won't resort to major spending cuts for fear of stalling the recovery, the province's finance minister said on Thursday.

The savings over three years include efficiencies that come from using newer jails, said Finance Minister Dwight Duncan, who is due to deliver the budget for Canada's most populous province on Tuesday.

"Thoughtless, across-the-board cuts would stop the economic recovery in its tracks," he said in a speech to a Toronto business audience.

"There will have to be more to build on what we've done already and it will also show people what our approach will be in the coming years as we move to balance," Duncan later told reporters.

Duncan's budget will be the last before a provincial election scheduled for October 6. Polls have shown the governing Liberals, led by Premier Dalton McGuinty, trailing the main opposition Progressive Conservatives, who have said they will eliminate government waste and bloat.

Duncan said the province will examine other ways to save, which could include selling some public assets, though he seemed to rule out the sale of major government-owned corporations such as the Liquor Control Board of Ontario, which has more than 600 retail outlets across the province.

Ontario gave its last fiscal update in November, when it said it would aim to eliminate its C$18.7 billion deficit by 2017-18.

"There should rightly be a focus on ensuring the economy gets back to a solid footing before exerting too much fiscal restraint, and I think that's a message we've heard from the minister pretty clearly," Warren Lovely, a government strategist at Canadian Imperial Bank of Commerce, told Reuters.   Continued...