Ontario's budget deficit for 2011-12 came in at $13-billion, but the deficit for the current year is still projected to be $14.8-billion.
The government used a $700-million reserve built into the budget to help reduce the deficit.
Finance Minister Dwight Duncan says the better-than-expected final figure for 2011-12 doesn't mean he will be able to eliminate the deficit before 2017 as scheduled.
He says the economic recovery is very slow, as is job creation, so there is still "a very long way to go" before he can balance the books.
Mr. Duncan also says there is still no money available to pay for wage increases for teachers, doctors, nurses or any of the 1.3 million public sector workers in Ontario.
New Democrat Gilles Bisson says the Liberals are "gaming the numbers for their own political advantage" by predicting a higher-than-expected deficit to make themselves look good when the final numbers come in.