Pete's brag sheet

Many years ago I worked in a Bay Street dealing room with Peter Bethlenfalvy, who is now Ontario's Finance Minister. Once or twice a years, he and I and the rest of our colleagues used to compile what we called a "brag sheet": a list of all the ways we'd made money for the firm, designed to maximize our share of the bonus pool.  

I have no need for a brag sheet any more, but Peter B. still seems to have the appetite for it. His Fall Fiscal Statement, release on Monday, is a veritable paean to all the things the Doug Ford government is doing to advance the Provincial economy. The headline of the press release is typical brag sheet stuff: "Ontario Delivers Progress Report and Advances its Plan to Build". Many of the "targeted measures" listed in the release are previously announced items, such as some ill-advised roadbuilding schemes, while others have the status of "proposals".  

There is also a highly braggadocious "building Ontario progress report" that lists a wide variety of mostly off-budget items for which the Province seeks to take credit. These include commitments by automakers to invest in battery development in Ontario, a "critical minerals strategy" to attract investment, and the hiring of 11,700 health care workers. Media interviews with Peter B. after the update was tabled strongly suggest  that he -- and, no doubt, Premier Ford -- resent the fact that they get little recognition for this last item. 

The only significant sort-of-new measure that most Ontarians will notice is an extension of the Government's gasoline tax rebate; set to expire at the end of this year, it will now remain in place through 2023. Premier Ford evidently thought this was such a red hot idea that he stole Peter B.'s thunder, pitching up at his local gas station in Etobicoke on Sunday morning to make the announcement. 

Something Peter B. can't brag about too much is the bottom line. It is likely that nobody was more amazed than Peter when the Province recorded a C$ 2 billion surplus for fiscal 2021/22, which ended in early April, compared to a C$ 20 billion-plus deficit originally expected.  No surplus this year: the update projects a deficit for FY 2022/23 of C$ 12.9 billion, though it should be noted that this is well below the C$ 19 billion projected back in the Spring budget. 

Like the recent Federal fiscal update, the Ontario update offers differing courses for the deficit beyond this year.  However, in both the slower and faster growth scenarios, the deficit is forecast to be on a steady downward path, with a return to surplus in FY 2024/25 or at latest 2025/26. The Province's own fiscal watchdog, in its most recent update, was even more optimistic about the timing and sustainability of a return to balance. 

Unless things go drastically wrong -- and recent history suggests they usually do -- the budget should at worst be close to balance by the time of the next Provincial election.  Given Ontario's dubious distinction as the most indebted non-sovereign jurisdiction in the world, this would represent something of an accomplishment.