January 25, 2012 / 8:28 PM / 6 years ago

Ontario finance minister sees targeted budget reforms

NEW YORK (Reuters) - Ontario’s spring budget will see targeted changes to the public sector, rather than cuts across all areas, the finance minister of Canada’s most populous province said on Wednesday.

“I categorically reject that we will do across the board cuts,” Ontario Finance Minister Dwight Duncan said in an interview.

“That approach, in our view, is not the right way to go. Broadly speaking, we’re looking at what I would call a transformation of public services in Ontario.”

The Ontario government is faced with a C$16 billion deficit that it has vowed to eliminate by 2017-2018. To look at where spending can be cut, Ontario set up a commission last year led by former TD Bank chief economist Don Drummond, whose report is expected ahead of the March budget.

Duncan said he did not expect the government would act on every recommendation laid out in the Drummond report.

“I imagine there will be recommendations we will accept, some that we will likely reject and some that will require further study,” said Duncan.

“As premier (Dalton McGuinty) said a couple weeks ago, we’ve asked Mr Drummond to give us some ideas, but we’re the decision makers, and we will respond though our budget,” Duncan later added.

On healthcare, which accounts for a large part of the operating budget, the reforms will be “very substantive,” Duncan said.

Asked if he could put odds on the chances of the budget triggering another election for the minority Liberal party, Duncan said he could not.

“We certainly don’t want an election,” said Duncan, who was in New York giving a speech on investment in Ontario.

Ontario’s economy was hurt last year by the supply chain disruption caused by Japan’s massive earthquake, but the economy was able to rebound modestly in the third quarter of 2011.

The province is Canada’s manufacturing heartland and relies heavily on the shipment of autos and parts to the United States.

Rating agency Moody’s recently threatened to downgrade the province’s debt rating, putting additional pressure on Ontario’s Liberal government to reduce the deficit.

Reporting By Leah Schnurr; Editing by Padraic Cassidy

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