Reevely: Ontario’s deficit is $1.3B lower than forecast (sort of)

A big part of explaining why economic growth, and sales tax revenue, were lower than expected?
“Having successfully not spent the money he didn’t plan to spend, he’s now treating that $1 billion as a sign of the Liberal government’s gift for fiscal restraint.

It’s an old trick. When the federal Liberals were enjoying budget surpluses in the early 2000s, they’d build in multibillion-dollar contingency funds to make the surpluses seem smaller. At the end of the year, they could overspend on some new goodies and still come in with better numbers than had been “predicted” when the contingency funds weren’t all spent.

Of course, put the $1 billion aside and the government is still $300 million better off than its projections said it would be.”
…The province did pull in $858 million more than anticipated from its Crown corporations. That’s a significant amount of money. Unfortunately, most of that came from Ontario Power Generation and Hydro One.”

Ottawa Citizen

The provincial government’s budget deficit in the last fiscal year was $10.5 billion, Finance Minister Charles Sousa announced Monday morning, $1.3 billion less than it was “projected” to be.

That’s a carefully engineered result. It conceals a report full of pretty glum news about Ontario’s economy, with just the tiniest tidbits of positivity.

On the face of it, being $1.3 billion to the good as the government delivered its final accounts for the 2013-14 fiscal year is a solid performance. “(This) marks the fifth year in a row that Ontario has beaten its deficit target — making the province one of the only governments in Canada to achieve this level of success,” Sousa’s announcement said. Hooray!

Well, no. The figure includes $1 billion in what Sousa’s last budget called a “reserve,” money, included as a contingency fund that he didn’t expect to spend. Having successfully not spent the money he didn’t plan…

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