TORONTO — Ontario's budget watchdog warns there is a "significant risk" that the Liberal government will not balance the province's books by 2017-18 as promised.
Financial accountability officer Stephen LeClair says there's been a slowdown in the economy since the 2015 provincial budget projected growth of 4.3 per cent in each of the next three years.
LeClair says growth will be just three per cent at best, which he warns will make it harder for the Liberals to stick to the budget plan to cap spending increases at just 0.5 per cent annually, down from 1.4 per cent in each of the past four years.
He predicts slower economic growth will lead to a drop in revenue of up to $1 billion from the budget forecast for the current fiscal year, which he says will make it even more difficult to curb government spending.
LeClair's office examined a number of scenarios affecting the government's finances and determined there will be a deficit of $5.2 billion next year and a shortfall of $3.5 billion in 2017-18.
And he says the Liberals would have to keep spending increases to 1.4 per cent and have economic growth of 3.3 per cent to get the deficit figures that low.
Moody's and Fitch Ratings have both expressed doubt about the government's ability to meet its deficit targets and reach balance in just two years.
Just last week, the new financial accountability officer warned the Liberals' plans to sell Hydro One would have a serious negative impact on Ontario's finances after an initial short-term gain.
