TORONTO, Canada — Finance minister Peter Bethlenfalvy released the 2021–22 First Quarter Finances, maintaining the government’s commitment to regular timely and transparent updates on Ontario’s finances.
“Since the beginning of the COVID-19 pandemic, the government’s response to COVID-19 has been supported by Ontario’s Action Plan, a flexible and clear framework to protect people and jobs,” said Peter Bethlenfalvy, minister of finance. “This approach ensured transparency and accountability, even amidst the significant economic uncertainty caused by the pandemic.”
While uncertainty related to the pandemic and the future pace of economic recovery remains, since the 2021 Budget private sector real gross domestic product forecasts for 2021 have been revised significantly upwards, reflecting significant progress on COVID-19 vaccinations and stronger than expected United States and global growth.
In its first fiscal and economic update since the 2021 budget, the government is projecting a deficit of $32.4 billion in 2021-22, an improvement of nearly $700 million from the outlook presented in the 2021 budget. This improvement is the result of prudent fiscal management and higher than projected revenue due to a stronger 2021 growth forecast for the province.
“Although we are seeing positive economic signs, we cannot let up on our focus on getting through the pandemic, and protecting the province’s health, jobs and economy,” said minister Bethlenfalvy. “We’ve always been clear that it would be growth that would fuel our return to a more sustainable fiscal position. The continued growth in employment and the modest deficit improvement projected in the 2021–22 First Quarter Finances are evidence that our plan is working. But we will maintain our focus on the plan outlined in the 2021 budget to get us through this crisis.”
With continued uncertainty about variants of concern, the risk of surges and future waves of the pandemic and the need to target future investments to spur economic recovery, the government is also maintaining prudence and flexibility to respond to emerging needs. So, in addition to reducing the deficit projection, the government is taking the prudent step of setting aside $2.2 billion of this revenue for the Time-Limited COVID-19 Fund.
“Our flexible approach has served Ontario well throughout the pandemic,” said minister Bethlenfalvy. “It will continue to ensure a lack of resources is never an obstacle in the Province’s response to COVID-19.”
The next step in the government’s plan will be outlined in the 2021 Ontario Economic Outlook and Fiscal Review, to be released by November 15, 2021.