2017 Budget in Brief: Path to a balanced Budget
Learn more about Ontario’s balanced 2017 Budget, how it builds our economy and where we go from here.
Ontario is balancing the budget for the first time since the 2008–09 global recession — while strengthening vital programs and services. Balancing the budget allows us to invest more in health care, education and other priorities. A balanced budget adds stability to our finances and positions us to better respond to demographic challenges and unexpected global economic change.
We continue to plan for long-term economic growth. To ensure everyone shares in this prosperity, we will continue to work with partners across regions and sectors to create jobs and strengthen communities. By investing in priorities like health care and education, we’re helping to make sure people can get ahead which helps our economy stay ahead, too.
The path forward
We are projecting balanced budgets in 2018−19 and 2019−20. Maintaining balance means more world-class public services and programs — like free prescription drug coverage for everyone aged 24 and under. We’re continuing to review our programs and services to make sure we deliver the best results at the lowest cost, benefiting more people across the province.
Ontario’s unemployment rate 2014-2016
Source: Ministry of Finance
Ontario’s economy continues to grow. Our province’s growth has not only outpaced Canada’s, but also that of all G7 countries over the last 3 years. Since the recession, nearly 700,000 jobs have been created, with real GDP growth of more than 19%. Our 2016 unemployment rate was the lowest since 2007 and trade has become more diversified.
Debt is incurred primarily for two reasons: to finance deficits and invest in building capital assets. A balanced budget means the government no longer needs to borrow to pay for its operating costs and can focus its borrowing for capital investments — which spur economic growth and improve quality of life for people today and future generations.
The balanced budget and the government’s continued focus on capital investment will add to economic growth, helping to lower the net debt-to-GDP ratio to the government’s pre-recession level of 27%. In the balanced 2017 Budget, the government is setting an interim target to reduce the net debt-to-GDP ratio to 35% by 2023–24.
Interest on debt
With a balanced budget, more revenue can be spent on priorities like health care and education, and less on interest. The 2010 Budget forecast that, by 2017–18, the Province would need to spend 11.3 cents of every revenue dollar received on interest. The current forecast is 3.1 cents lower, at 8.2 cents of interest costs for every dollar of revenue.