Ontario projects a $4.5 billion deficit in 2024

Ontario predicts it will end this fiscal year with a $4.5 billion deficit, while remaining in a large contingency fund until then.

Finance Minister Peter Bethlenfalvi released the province's third-quarter finances today, the last major fiscal update he will provide before introducing the budget by the end of March.

The current deficit forecast for 2023-24 is $4.5 billion, $1.1 billion lower than Bethlenfalvi's forecast in his autumn economic statement, but significantly higher than the $1.3 billion he expected during last year's budget.

The government said the $1.1 billion improvement was due to higher revenues, including taxes and money from the federal government, and lower interest costs on the province's debt due to higher interest rates.

Ontario has added some new spending since the fall economic statement, including $1.7 billion in health care and more than $700 million in support for the city of Toronto.

The province will use its emergency fund to pay for some of these new costs, and the fund, which was $5.4 billion during the fall economic update, now stands at $3.3 billion.

This report by The Canadian Press was first published on February 12, 2024