Bethlenfalvy’s fall economic update offers a path to balance. Pictured: Premier Doug Ford and Finance Minister Peter Bethlenfalvy. Photo Credit: Doug Ford/X.
Here’s some good news for taxpayers: the Ontario government stands on the cusp of balancing the books and there’s tax relief coming.
Those are great highlights in Finance Minister Peter Bethlenfalvy’s fall economic update.
Ontarians are worried about government debt. Politicians often assume taxpayers barely bat an eye when they see governments running deficits and running up debt. Those politicians are wrong.
In fact, 81 per cent of Ontarians are concerned about the fact this province now has more than $400 billion in debt, according to a recent poll. Ontario is the most indebted non-national government in the world.
Bethlenfalvy’s fall economic update offers a path to balance. With a little prudence, the province can even get there next April.
In his spring budget, Bethlenfalvy projected two years of deficits before balancing the books in 2026-27. Those two years of deficits were projected to amount to $14.4 billion.
But Bethlenfalvy’s latest economic update paints a rosier picture. Deficits over the next two years are now projected to be a combined $8.1 billion. And next year’s deficit is only projected to be $1.5 billion, which is equal to the budget’s contingency fund.
In other words, Ontario is on the cusp of a balanced budget.
Bethlenfalvy should make sure Ontario’s budget is balanced next spring rather than procrastinating until 2026.
In addition to lower deficit figures, another nugget of good news is the lower debt interest cost.
Interest charges are now projected to be $12.7 billion. That’s more than a billion dollars less than the $13.9 billion projected this spring. Bethlenfalvy credits a smaller deficit and strengthened credit ratings for that falling figure.
The fact Ontario taxpayers are wasting $1.2 billion less on debt interest payments is great news. And it shows precisely why balancing the budget is crucial.
No one wants to see the government blow more than a billion dollars a month on debt interest. Sadly, that’s the reality in Ontario today. And the only way to drive debt interest costs down is to stop digging.
And then there is the other good news – tax relief.
Bethlenfalvy also announced plans to extend the Ford government’s temporary 6.4 cent per litre gas tax cut until June 30, 2025. Between now and then, the typical two-car family will save roughly $275 at the pumps.
With 50 per cent of Ontarians saying they’re $200 away from not being able to pay their bills, that relief will make a difference.
Speaking of $200, the Ford government is also promising to send $200 cheques to every taxpayer in Ontario, with $200 extra per child for parents.
Taxpayers would have preferred permanent tax relief instead of ad hoc cheques. But putting money back in taxpayers’ pockets is always a good thing.
Bethlenfalvy should build on that one-time relief and keep the Ford government’s promise to cut middle-class income taxes. Back in 2018, Premier Doug Ford announced a plan to cut middle class income taxes by $786 a year.
Ontarians have yet to see that income tax cut under the Ford government and that should be first on the to-do list.
There’s good news, but it’s important to remember where it came from. The deficit is down because of increased revenue, not because of prudence from the Ford government. The province experienced a $6.9 billion revenue windfall this year alone.
Still, the deficit is down and credit should be given where it’s due.
As Bethlenfalvy starts work on preparing the Ford government’s 2025-26 budget, he should commit to balancing the books a year earlier than planned, deliver permanent tax relief, and put Ontario on a path to get its $429 billion debt tab down.
Jay Goldberg is the Ontario Director at the Canadian Taxpayers Federation. He previously served as a policy fellow at the Munk School of Public Policy and Global Affairs. Jay holds a Ph.D. in Political Science from the University of Toronto.
