In yesterday's speech, Finance Minister Sousa pledged to keep taxes at their current levels, and hold government spending growth to 1 per cent. This was a profoundly disappointing announcement. There is no fiscal or economic reason for this policy stance, and a different approach will have both economic and social benefits.
The fiscal situation
Minister Sousa stated that Ontario is ahead on its deficit reduction plan, and the deficit will be $9.8 billion for this fiscal year, $5 billion lower than forecast in the budget. The table above shows interest payments as a share of revenues and the accumulated deficit as a share of GDP. Both of these are important measures of fiscal health of the province.