Ontario trimmed its deficit projection by C$1.3 billion ($990 million) for the 2019-20 fiscal year as growth and job creation picks up steam in Canada’s provincial powerhouse.
The world’s largest sub-sovereign debt issuer is on track to report a deficit of C$9 billion for the year ending March 31, down from C$10.3 billion previously projected, according to Ontario’s government data released Wednesday. The deficit projection includes C$1 billion set aside for contingencies.
The government also plans to cut its small business corporate tax rate to 3.2% from 3.5% starting Jan. 1., providing tax relief of up to C$1,500 annually to more than 275,000 businesses.
“Since taking office 16 months ago, our government has taken steps to strengthen our finances, our economy and critical public services,” Finance Minister Rodney Phillips, said in a statement. “Solving these challenges has not been about grand gestures, but rather the practical and meaningful actions that help make life easier and more affordable for people, like reducing taxes, investing in health care and education, and building modern transit and roads.”
Ontario’s economy is picking up after a slow start to the year. The unemployment rate stood at 5.3% in September, just shy of a three-decade low, according to federal government data. Premier Doug Ford is pushing to eliminate the budget shortfall by fiscal 2023-2024 but is moving slowly to avoid major service cuts and clashes with public sector workers.
Revenues are seen rising marginally to C$155.8 billion from the previous estimate while expenses are now likely to come in slightly higher at C$163.8 billion.
Ontario’s 2019-2020 long-term borrowing plan was reduced to C$31.9 billion compared with C$36 billion estimated earlier this year. As of Nov. 6 Ontario has raised C$21.3 of long term borrowings. Long term debt issuance will decline by C$5.5 billion over a three-year period ending March 31 2022, compared with estimates tabled in the budget forecast earlier this year.