The Government of Ontario has lowered its budget deficit projections by 35% as inflation provides a boost to the province’s tax revenue.
Ontario’s budget deficit is now forecast to be $12.9 billion in the fiscal year ending March 31, 2023, compared to a previous estimate of $19.9 billion made in the April budget.
The Ontario government revised its budget deficit outlook in its annual fall economic update.
The government of Canada’s most populous province also said its revenue is now expected to reach $186.8 billion, up from $179.8 billion previously estimated, due largely to higher individual and corporate tax revenue.
Despite the higher revenues, Ontario still expects to fall back into a budget deficit in the current fiscal year after posting its first surplus in 14 years for fiscal 2021-2022.
The Government of Ontario also said that it expects the province’s economic growth to slow in 2023 and 2024 as inflation remains elevated.
Lastly, the provincial government expects to reduce its long-term borrowing in the current fiscal year by $9.3 billion to $32.2 billion. The annual borrowing rate is projected to be 4.2%.
