Moderate downturn could upset PC's balanced budget plan: FAO

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Moderate downturn could upset PC's balanced budget plan: FAO
Antonella Artuso
July 9, 2019
July 9, 2019 5:16 PM EDT
Rod Phillips addresses media as Doug Ford listens on April 1, 2019. Ernest Doroszuk / Toronto Sun
Even a mild recession could plunge the province back into deep red ink, adding an extra $31 billion in debt in just four years, a new commentary from the Financial Accountability Office of Ontario (FAO) says.
The province’s anticipated deficit of $7.4 billion in 2020-21 could turn out to be $15.7 billion, the FAO projects.
Finance Minister Rod Phillips welcomed the report but stressed prudence has been built into the fiscal plan.
The FAO looked at the implications of a moderate economic downturn in 2020 extending until 2023 on the province’s books.
“Taken together, the FAO estimates that the deficit would increase by $10.8 billion to $16.5 billion in 2021-22, which would be the largest deficit since 2010-11,” the FAO commentary released Tuesday says. “While the budget deficit would be expected to improve steadily as the economy recovers from the recession, a budget deficit of over $4 billion would still be projected in 2023-24, the year the government intends to achieve balance, based on the 2019 budget plan.”
The Doug Ford government’s plan to balance its operating budget by 2023-24 relies on continued economic growth, the commentary says.
Yet, the province’s experience over the last four decades suggests it might be due for a downturn, and trade uncertainties and high household debt levels could be triggers, the report says.
Phillips said in a statement that the government’s plan for economic growth is working.
“Since our government took office, Ontario has led the country in job growth with over 180,000 new jobs,” he said. “At a time of global uncertainty, Ontario will remain focused on laying a stable foundation for job creation and long-term prosperity.”
The TSX has been crashing since May.

I can't believe the amount of people who can't read a graph.