Province ends fiscal year with $298 million surplus

News Release
Ont. Govt.

TORONTO, Aug. 24 /CNW/ - The McGuinty Government achieved a modest surplus of $298 million for the fiscal year 2005-06, which has been verified by the Auditor General, Finance Minister Greg Sorbara announced today. “Our plan was to eliminate the fiscal deficit by 2008-09, or a year earlier if the reserve was not needed. We have balanced the budget in 2005-06 while making historic, long-term investments in health, education and the economy,” Sorbara said. “However, we must remain prudent and disciplined in the face of continuing fiscal challenges. While we have achieved a modest surplus for the past year, we have not yet eliminated the structural deficit we inherited.” The improvement to the Province’s fiscal position from the projection in the 2005 Budget is largely due to higher than expected tax revenues and lower than expected net expenses of hospitals, school boards and colleges. The financial results of these broader public sector organizations are being consolidated for the first time in the Province’s accounts in accordance with revised accounting standards for governments issued by the Public Sector Accounting Board of the Canadian Institute of Chartered Accountants. “While we have won a significant battle in the war on the deficit, it would be premature to declare victory,” said Sorbara. “We continue to face significant spending pressures and serious external challenges to our economy, including higher interest rates, the high dollar and increasing oil prices. There is still a significant risk to our economic outlook and we cannot discount the possibility that these factors may have a negative impact on our fiscal plan, which is why we must continue to be vigilant.” Details of the 2005-06 provincial finances are contained in the Province’s Annual Report and Consolidated Financial Statements for 2005-06. Revenues in 2005-06 were $286 million higher and expenses were $1.4 billion lower than the interim numbers included in the 2006 provincial Budget. The Auditor General has given an unqualified opinion of the Province’s 2005-06 Consolidated Financial Statements, consistent with the government’s commitment to accountability, transparency and fiscal responsibility. The next update on Ontario’s finances will be provided in the Fall Economic Statement. “We have made great progress, we are close to our goal but there is much more to be done,” Sorbara said. “We remain committed to strong financial management and we will continue our prudent, disciplined approach so that we can win the war on the deficit while continuing to make priority investments in health, education and the economy.”