Ontario Faces Worst Deficit Ever
As the Synergy Merchant Services Blog has discussed before, the province of Ontario has taken quite a hit over the past several months as Canada battles through the recession. Today, headline news was made when it was revealed that Ontario is projected to have a record deficit of $24.7 billion for 2009 and 2010.
As Jonathan Jenkins and Antonella Artuso write on Toronto Sun's website, the deficit now practically doubles the previous record of $12.4 billion which inevitably saw Bob Rae lose his position as Premier of the province.
Finance Minister Dwight Duncan issued a statement about the groundbreaking revelation blaming the bloated deficit figure on a 48.1 per cent drop in corporate tax revenues amounting in a $5.8 billion loss in provincial revenue.
680 News' website revealed some depressing statistics about the financial state of Ontario today. They indicate that the province's “gross domestic product will decline 3.5 per cent this year” and that employment declined by 205,200 jobs in 2009 with jobs in the auto sector down by 25.5 per cent so far this year.
Says Duncan: “Although there are signs of stabilization in the economy, growth in government revenues and employment will lag behind growth in the economy.”
Along with Duncan, Ontario Premier Dalton McGuinty insists that health care, education and job creation remain priorities. There is still a plan to go ahead with implementing a full-day kindergarten for four and five year olds in the province.
As well, $650 million has been set aside in the fight against swine flu and there is a plan to merge sales taxes that is expected to reduce tax revenue for the province by $2.3 billion over four years.
But how is this expected to help the average, everyday consumer? NDP critic Michael Prue believes that this will have a negative impact on Ontarians.
“It's all geared in one direction,” said Prue, “not to the consumer, not to the ordinary person, but to people who already make a lot of money. (McGuinty) is going to whack ordinary people.”
Sadly, Ontario has taken quite the “whack” already. Many will likely call for the removal of Dalton McGuinty as head of the province much as they did Bob Rae in the early 90s. It is likely that no one expected the state of Ontario's economy to ever get this bad.