{"id":150931,"date":"2025-09-17T18:18:06","date_gmt":"2025-09-17T18:18:06","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/150931\/"},"modified":"2025-09-17T18:18:06","modified_gmt":"2025-09-17T18:18:06","slug":"ontario-deficit-and-debt-to-grow-significantly-over-next-5-years-fao-report","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/150931\/","title":{"rendered":"Ontario deficit and debt to grow significantly over next 5 years: FAO report"},"content":{"rendered":"

A new outlook report from the Financial Accountability Office of Ontario (FAO) projects the province\u2019s deficit and debt will grow significantly over the next five years.<\/p>\n

The report from Ontario\u2019s financial watchdog, which was released on Wednesday, looks at the province\u2019s economic outlook and finances from 2024-25 to 2029-30.<\/p>\n

\u201cBased on the FAO\u2019s outlook for the Ontario economy, and current government policies and announced commitments, the FAO projects that the budget balance will deteriorate from a deficit of $1.3 billion in 2024-25 to $12.0 billion in 2025-26,\u201d the report states.<\/p>\n

NEW \u2013 The independent Financial Accountability office is out predicting ballooning budget deficits in Ontario, saying it doesn\u2019t think there will be a return to balance as forecasted. Says deficit will grow form $1.3B in 2024-25 to $12.0B in 2025-26. Will be $7.9B in 2028-29.<\/p>\n

\u2014 Richard Southern (@RichardCityNews) September 17, 2025<\/a><\/p>\n

The financial watchdog also said the province\u2019s net debt will increase to around $141.4 billion (34.7 per cent), from $408.0 billion in 2023-24 to $549.3 billion in 2029-30.<\/p>\n

\u201cThis increase is due to $52.2 billion in accumulated budget deficits over the period and an $89.2 billion increase in non-financial assets, largely infrastructure assets owned by the Province and the broader public sector,\u201d the report states.<\/p>\n

When the Ontario government tabled its budget back in May<\/a>, the province laid out a path to balance the budget by 2027-28. However, the FAO said that is not going to happen.<\/p>\n

\u201cIn three years, the government is forecasting a balanced budget. We think it, based on our review, it\u2019s closer to a deficit of $10 billion, so to achieve that $10-billion gap, it\u2019s either revenue measures or spending changes that equal $10 billion,\u201d said Jeffrey Novak, the Financial Accountability Officer.<\/p>\n

The difference, Novak said, is because the government will be forced to spend a lot more than it\u2019s forecasting on critical programs like health care.<\/p>\n

In a statement to CityNews, a spokesperson from Finance Minister Peter Bethlenfalvy\u2019s office said the province\u2019s finances are stronger today than they have been over a decade.<\/p>\n

\u201cAs is always the case, FAO reports reflect a moment in time and do not encompass the entirety of the province\u2019s finances. Total, up-to-date, and accurate expenditures will be made available when the Public Accounts are tabled,\u201d the statement reads.<\/p>\n

\u201cAs highlighted in the 2025 Budget, we remain on a clear path to balance by 2027-28, as we work to protect our economy and make Ontario the most competitive place to do business in the entire G7.\u201d<\/p>\n

The FAO said it finalized its economic and budget outlook based on existing trade policies as of Aug. 5, 2025.<\/p>\n

With the current trade climate, the financial watchdog says Ontario\u2019s real GDP growth is projected to slow to 0.9 per cent in 2025 and 1.0 per cent in 2026, due to the U.S. tariffs reducing demand for Ontario\u2019s exports and hiring cuts.<\/p>\n

However, as the provincial economy adjusts to the tariff impact over the course of the FAO\u2019s outlook period, it projects GDP growth will return to its average long-term trend of 1.9 per cent per year.<\/p>\n

\u201cAs U.S. trade policy continues to shift, the actual impact of tariffs on Ontario\u2019s economy is highly uncertain and will depend on the magnitude, breadth and duration of tariff coverage, as well as how businesses, households and economies respond.\u201d<\/p>\n

Due to the trade uncertainty, the FAO said it came up with two scenarios to estimate a range of potential economic and budget impacts to the province.<\/p>\n

In the \u2018low impact\u2019 scenario, in which U.S. tariff policies are assumed to be more favourable compared to the tariff policies as of Aug. 5, the province\u2019s budget deficit would improve to $3.9 billion in 2029-30.<\/p>\n

However, in the \u2018high impact scenario,\u2019 in which U.S. tariff policies are more severe, the budget deficit would hit $13.4 billion by 2029-30.<\/p>\n

Click here<\/a> to read the full report.<\/p>\n

With files from Mark McAllister, CityNews; and Richard Southern, 680 NewsRadio<\/p>\n

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