Ontario balances its budget for the first time in 14 years

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Jay GoldbergWell, I was wrong when I projected it would take Premier Doug Ford two years to balance the budget.

It’s already balanced.

But here’s the funny thing: he doesn’t want you to know about it.

My two-year timeframe, which seemed optimistic just a few months ago, was based on a report released by Ontario’s Financial Accountability Office, the province’s budgetary watchdog agency. The FAO’s report showed the Ford government could balance the books within two years by simply limiting spending increases to the rate of inflation.

Even without genuine spending restraint, the FAO said Ontario was on a path to a balanced budget, mainly because of increased tax revenue driven by inflation.

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A week after the FAO issued its report, Finance Minister Peter Bethlenfalvy released the Ford government’s 2022 budget. It announced plans to run the largest deficit in Ontario’s history, and the government wouldn’t balance the books for at least five years.

Even with an inflation cash windfall, the Ford government planned to run a stunning $19.9-billion deficit.

Despite running on a platform of fiscal discipline in the 2018 provincial election, the Ford government told Ontarians that the province’s finances were awash in red ink.

Fast forward to the end of September. On a Friday afternoon, without fanfare, the Ford government released last year’s public accounts, which showed the government balanced the budget in fiscal year 2021-22.

This was Ontario’s first balanced budget in 14 years.

For most governments, this would be a huge accomplishment. For the Ford government, it was news to slip out on a Friday afternoon and hope nobody noticed.

The real headline should have been that Ontario’s revenue was $31.1 billion higher than the government expected.

In the president of the treasury board’s foreword on the public accounts, the government appeared pained even to admit there was a surplus.

“The surplus recorded in the 2021-22 Public Accounts is not necessarily indicative of future results,” read the statement. “We cannot build a prudent and responsible long-term fiscal plan based on short-term, and uncertain, economic circumstances.”

But with government revenue $31.1 billion higher than the Ford team had expected, largely due to inflation, now is precisely the time to ensure the budget remains balanced over the long term.

Clearly, the Ford government doesn’t want to raise expectations by acknowledging the surplus. It’s as if Ford is already preparing to plunge the province back into deficit.

But, with government revenue $31.1 billion beyond the government’s expectations, it would be a dereliction of duty for Ford to steer the province back into deficit.

All of this extra tax revenue proves it’s time for the Ford government to reduce the heavy tax burden on Ontario taxpayers.

The Ford government should use its cash windfall both to keep the budget balanced and reduce taxes.

And the government should start by making its temporary gas tax cut permanent.

A permanent tax cut could easily be paid for without impacting the province’s bottom line. Ford could start by stopping corporate welfare handouts.

Just a few months ago, Ford handed Stellantis, a Fortune 500 company, over half a billion dollars for plant renovations in Windsor and Brampton. It’s time to stop giving taxpayer dollars to companies that don’t need the help.

It turns out that a two-year path to a balanced budget was too pessimistic. The government has already balanced the books. But taxpayers must stay vigilant and demand that Ford use the revenue windfall to maintain a balanced budget, not to plunge the province back into a sea of deficit spending.

It took Ontario 14 years to get to this balanced budget moment. Taxpayers cannot allow Ford to throw it away.

Jay Goldberg is the Ontario & Interim Atlantic Director for the Canadian Taxpayers Federation.

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By Jay Goldberg

Jay Goldberg spent most of his career in academia, where he was most recently a policy fellow at the Munk School of Public Policy and Global Affairs at the University of Toronto. He holds an Honours Bachelor’s Degree in Political Science from the University of Toronto, and a Master of Arts Degree in Political Science from the University of British Columbia.

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