Ontario budget deficit narrowed by 11 percent

Mon Mar 28, 2011 2:43pm EDT
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By Claire Sibonney

TORONTO (Reuters) - Ontario's budget deficit shrank by 11 percent in the current fiscal year, a government source said on Monday, a sharper reduction than the previous estimate thanks to reduced spending and a stronger economy.

The province's deficit for the fiscal year to the end of March will drop by C$2 billion ($2.1 billion) to C$16.7 billion, the source said, compared with an economic update given in November.

Ontario Finance Minister Dwight Duncan on Tuesday will present the province's last budget before an October election.

Facing mounting criticism over their efforts to narrow the deficit, Duncan and the ruling Liberals are under pressure to provide a convincing plan to bring provincial finances into balance.

The latest deficit estimate for the year ending March 31 is C$3 billion less than the estimate given in last spring's budget.

"Our deficit is actually coming down faster than the federal deficit is," said Duncan, who backed the deficit figures disclosed by the source as accurate.

The finance minister also announced the province was investing in 60,000 new post-secondary school spaces.

He said education and health care -- which make up 70 percent of government spending -- will remain a priority, and expenses will rise even as the growth rate slows.   Continued...