Ontario deficit to mark improvement over previous targets

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Ontario will run a deficit of less than $12-billion in 2013-14, higher than last year, but a substantial improvement over previous targets.

The figure will be announced on Thursday in the first budget of Kathleen Wynne's premiership. The minority Liberals will try to control spending while offering enough new money to secure the support of the third-party NDP.

The revised projection is in keeping with the Liberals' practice of building contingencies into deficit figures and then beating the targets. Last year's deficit was estimated at $14.8-billion before dropping dramatically to $9.8-billion. Under the government's fiscal plan, this year's deficit was pegged at $12.8-billion, but is now expected to come in about $1-billion lower.

"We've now been able to effectively reduce our deficit target by $5-billion last year alone. Going forward, we're going to be able to reduce next year by [a] billion," Finance Minister Charles Sousa said. "I'm very proud of all the work everyone has done."

The budget will look to keep spending growth in every ministry at less than one per cent.

While the new figure shows the government continuing on its steady path to a balanced budget, it will still be tough to hit the Liberal target of washing away the red ink by 2017-18, as some of the most rigorous restraint must come in future years.

Despite the belt tightening, the government will dole out new money for some programs, including several demanded by New Democrat Leader Andrea Horwath as the price of her backing. With the Progressive Conservatives vowing to vote against the budget, the Liberals need Ms. Horwath's help to avoid a snap election.

The government has already announced plans to pump money into home care, and will unveil plans on Tuesday to crack down on auto insurance fraud with the goal of cutting premiums by 15 per cent.

On Monday, the Liberals targeted youth unemployment with $295-million for job programs.

The lion's share of the money will go to a new fund, to be up and running by September, that would provide subsidies to companies to hire young people. The jobs created under the program would last at least six months and be aimed at giving youth practical, on-the-job experience to get them into longer-term employment. The program is almost identical to one Ms. Horwath demanded.

The Liberal plan will also include three smaller funds: one for young entrepreneurs, another to help youth manage industrial research, and a third to fund skills-development programs.

"I hope what we are planning to do – which goes quite a ways beyond what the NDP was asking and is a much more complete strategy – my hope is that it will meet the needs of young people in the province," Ms. Wynne said at a Toronto youth employment office.

Mr. Sousa hinted that the budget will also contain employment help for welfare recipients.

"The decisions that we make around this budget are all around: does it help create a job? Be it those on social assistance or be it our young people," he said.

Despite her apparent victory, Ms. Horwath said she would not commit to backing the Liberals yet.

"We've been working hard to get results for young people struggling to get into the workplace. We've forced the government to respond, but we're not there yet," she said in a statement. "We're going to look closely at the budget to ensure it delivers the real results young people need."