Ontario budget deficit projected to jump to $38.5B in 2020

Marco Green
August 13, 2020

The projected deficit this year has more than tripled to $38.5 billion from last year's pre-COVID-19 level of $9.2 billion, and nearly doubled from the $20.5 billion projected in March.

During the height of the pandemic, with more than a million people out of work in Ontario, provincial tax revenues dropped by $10.7 billion, largely owing to declines in personal income and corporate tax revenue, as well as lower income from the gasoline and fuel tax.

The shorthand version of that in Ontario which, along with Quebec, is the epicentre of the COVID-19 outbreak in Canada, is that the province is drowning in an ocean of red ink.

Phillips says Ontario's economy is scheduled to grow by 5 per cent next year, but only if we have a handle on COVID-19. The budget shortfall was $9.2 billion a year ago.

In March, the province announced a $17-billion spending package to provide aid during the global pandemic.

The province will add $2.2 billion to a standard contingency fund established in the wake of the pandemic.

To help businesses deal with the extended closures the province is extending its tax deferral policy for another month, giving businesses until October 1, 2020 to pay their taxes.

Prior to the pandemic, Ontario had been projecting a $9-billion deficit for 2020-2021 and Premier Doug Ford had pledged to balance the province's books by 2023-2024.

"While the current level of government spending and deficits are not sustainable over the long term, they are necessary today", he said. The government said it will instead introduce its full spending package on, or before, November 14.

Other reports by Click Lancashire

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