The Ontario government has opted to mobilize its own funds to take advantage of stimulus measures announced in the January 2009 federal budget. However, the extra stimulus will come at a cost—a $14.1-billion deficit this coming year, and a long, difficult path to regaining fiscal balance.
2009 Ontario Budget Analysis
2009 Ontario Budget Analysis
Provincial Economic Analysis
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- The province will prioritize infrastructure spending—mobilizing an additional $3.4 billion in financing for new projects in each of the two upcoming fiscal years. The spending is in addition to the existing multibillion-dollar ReNew Ontario and MoveOntario 2020 initiatives.
- In fiscal year 2009–10, total program expenses are forecast to rise by 12.5 per cent. They will jump a further 5.1 per cent in 2010–11. Thereafter, the Ontario government will begin its attempt to control spending in an effort to climb out of deficit.
- Ontario will harmonize its sales tax with the federal goods and services (GST) on July 1, 2010. The new value-added harmonized sales tax (HST) will promote long-term business efficiency but also generate upward of $2 billion in new revenues annually.
- Assuming that infrastructure spending is timely, new measures announced in Budget 2009 will add a sizable 1.2 percentage points to real GDP in 2009.
- Ontario is poised to go from “have” to “have not” status, and will receive $347 million in federal equalization payments in the coming fiscal year.
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