Ontarios Liberal government is ramping up the provinces deficit with a big-spending budget designed to either forestall an election or pay off at the polls in the event of a snap vote. The spending plan which hikes the shortfall to $12.5-billion outlines a sweeping, left-tilting agenda including a new provincial pension plan, billions of dollars worth of new infrastructure and piles of money for social services.
Finance Minister Charles Sousa said the government has to intervene to stimulate a sluggish economy. Weve taken the deliberate step and the conscious step to make these investments this year, he said. Thats going to propel our economy to a level that otherwise wouldnt occur.
The reasoning behind the document, however, is as much about politics as policy. The Liberals are banking that the budget will be hard for the NDP to vote against.
And if they do, they hope the new spending will win them the ensuing election. The Grits control only a minority of seats in the legislature and, with the Progressive Conservatives vowing to vote down the budget, need the NDPs support to avoid an election.
Just minutes after Mr. Sousa tabled the plan in the legislature, Premier Kathleen Wynne ratcheted up the pressure on NDP Leader Andrea Horwath to support it by giving her a one-week deadline to make up her mind.
We are eager to implement key aspects of the document immediately, Ms. Wynne wrote in an open letter. We need to begin the process of putting the new Ontario Retirement Pension Plan in place, of building infrastructure across the province, especially through our Moving Ontario Forward plan for transportation and transit, and of creating good jobs and growing the economy.
Ms. Horwath skipped the traditional news conference with reporters in the budget lockup, saying she would instead respond to the budget Friday. Ill be talking more in the morning, she said as she left the legislature.
The hefty deficit is $2.4-billion more than the governments target, but Mr. Sousa insisted he could still balance the books by 2017-18 using a combination of higher taxes on the rich and smokers, and brisker economic growth. The shortfall, he said, will fall dramatically to $8.9-billion next year.
But the blown deficit target could lead to a downgrade in the provinces credit rating in the weeks ahead.
Its obviously more than we expected and factored in, in our last review, said Mario Angastiniotis, who analyzes Ontarios finances for Standard & Poors. And thats disappointing. While saying its understandable given the weaker-than-expected economy that revenues are not growing as much as expected, Mr. Angastiniotis noted the lack of offsetting measures in the form of greater spending restraint.
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Ontario Liberals give NDP hard deadline to decide on budget