(Adds details on government measures, housing market)
By Fergal Smith
TORONTO, Nov 14 (Reuters) - The Ontario government said on Monday it remains on track to balance the budget next year and proposed a higher tax refund for first-time home buyers in the province’s hot housing market.
Canada’s most-populous province expects to run a deficit of C$4.3 billion ($3.17 billion)in the 2016-17 fiscal year, the Liberal government said in a budget update, in line with the deficit it had estimated in February.
Ontario, which accounts for about 40 percent of Canada’s economy, maintained its promise to have a balanced budget in 2017-18 and expects to remain in balance the year after. It has run a deficit every year since 2008-09, when the global financial crisis hurt the economy.
The Liberals, who have a majority in the provincial legislature, also proposed to double the maximum Land Transfer Tax refund to C$4,000 for eligible first-time home buyers, effective Jan. 1, 2017.
The measure, aimed at helping younger buyers get into the housing market, would mean that eligible buyers would pay no Land Transfer Tax on the first C$368,000 of the cost of their first home.
Ontario’s approach to combat expensive home prices contrasts with measures taken by British Columbia, which moved in August to damp Vancouver’s long-running housing boom.
The West Coast province introduced a foreign property transfer tax in August on transactions in Vancouver, dramatically cooling the market in the city.
Ontario also forecast its long-term borrowing in 2016-17 to be C$23.8 billion, C$2.6 billion less than forecast in the February budget and C$8.3 billion lower than the amount borrowed in 2015-16. (Reporting by Fergal Smith, editing by G Crosse and Alan Crosby)