Well, another Ontario budget has come and gone.  The government still plans to balance its budget by 2017.  According to the budget projections it will do this largely by increasing revenues and restricting expenditure growth. 

Between 2014/15 and 2017/18, revenues are expected to grow from 118.5 to 134.4 billion dollars – an increase of  13.4 percent.  At the same time, expenditures (including the contingency reserve) are projected to rise from 129.5 to 134.4 billion dollars – an increase of 3.8 percent.  Nevertheless, the net debt will still rise from 284.1 to 319.5 billion dollars -an increase of 12.5 percent – while debt service costs will rise from 10.7 to 13.2 billion dollars – an increase of 23.4 percent. 

Overall, this still appears to be an overly optimistic budget balancing plan given that the reliance is on revenue growth which in turn depends on a rate of economic growth which is still expected to remain relatively weak over the near term. For another take, see Don Drummond in the Globe.  For more from me, check here.

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