Ontario won’t be following Ottawa in raising its deficit projections because of worsening economic conditions and an aid package to General Motors and Chrysler, Premier Dalton McGuinty said yesterday.
Federal Finance Minister Jim Flaherty shocked many Tuesday by announcing Canada’s deficit will soar
to more than $50 billion this fiscal year — a $16-billion increase from the amount forecast that prompted the federal Liberals to demand his dismissal yesterday.
One of the factors cited for the change was billions of dollars in aid to the struggling auto sector.
McGuinty said Ontario, which is on the hook for a third of the aid, has no reason to believe the province will have to update its own projections.
“I have no reason to believe at this point in time, based on the updates I’ve received from the minister of finance, that we aren’t able to manage this,” McGuinty said.
The Ontario budget promised $3.4 billion in contingency and an additional $1.2 billion in reserve.
The government refused to specify how much of that money was meant for the auto loans, and Ontario Finance Minister Dwight Duncan again declined to provide specifics after the budget passed yesterday in the legislature.
“We have built considerable contingency into our budget and have a lot of flexibility to move in-year to address line-by-line differentials,” Duncan said.
“It’s an ongoing process but, overall, I believe we have adequate reserves and contingencies.”
McGuinty reiterated yesterday the aid remains on the table, whether the restructuring happens under bankruptcy protection or not.
