TORONTO — Ontario's economy can withstand a recession, the province's finance minister said Wednesday.
Peter Bethlenfalvy said the province's financial situation has improved by billions of dollars, although still running at a deficit for the current fiscal year.
"Ontario is absolutely resilient to be able to get past whatever the economy throws our way," Bethlenfalvy said in a third-quarter fiscal update.
The province is reporting a $6.5-billion deficit for the 2022-23 fiscal year, an improvement of $6.4 billion from its fall economic statement.
Bethlenfalvy said the improvement is due to higher corporate tax revenue and increased revenue from sales taxes.
Real gross domestic product is estimated to have increased by 3.7 per cent in 2022, he said.
Revenues are now forecast to be $9.6 billion higher than forecast in November's fall economic statement.
The province's overall expenses are projected to be $188.6 billion, which is $3.4 billion higher than forecast, Bethlenfalvy said.
Bethlenfalvy said the province, like the rest of the world, continues to face pressures from high inflation, increased interest rates, geopolitical issues and supply chain disruptions.
After unprecedented investments during the pandemic, Bethlenfalvy said it's time to change course.
"Now is the time for governments to show restraint, to act cautiously and responsibly," he said.
The province's fiscal watchdog last week projected a much smaller deficit of $2.5 billion for the current fiscal year. But the Financial Accountability Office said that would turn to billions of dollars of surplus over the subsequent three years.
Bethlenfalvy said the fiscal watchdog looks at "a point in time."
"They don't have the full information," he said.
Financial accountability officer Peter Weltman said he was concerned about the billions of dollars in the province's contingency fund due to lack of transparency.
Bethlenfalvy said he fundamentally disagrees with Weltman.
"I wouldn't be doing my job as minister of finance if I didn't build some prudence and contingency funds," Bethlenfalvy said.
The province must table its budget for the next fiscal year by March 31.
This report by The Canadian Press was first published Feb. 15, 2023.
Liam Casey, The Canadian Press
