Ontario Achieves Surplus In 2006-07

    Government Pays Down Provincial Debt by $2.3 Billion On Track To Post
    Five Consecutive Balanced Budgets

    TORONTO, Aug. 17 /CNW/ - The McGuinty government achieved its second
consecutive balanced budget and posted a $2.3 billion surplus for the 2006-07
fiscal year, ending March 31, 2007, Finance Minister Greg Sorbara announced
today. The province also released its first quarter finances for 2007-08,
which shows an improvement of $400 million from the budget outlook.
    "I am obviously very pleased with these results," Sorbara said. "As we
come to the end of our first term, they confirm the strength of the province's
finances. We are clearly in an era of balanced budgets. The results show that
our economy is growing and that our disciplined, prudent approach to financial
management has been successful."
    The financial results for 2006-07 reflect higher revenues and lower
expenses than projected. The main drivers of increased revenue were increased
transfer payments from the federal government, a one-time gain from the sale
of Teranet Inc. and higher taxation revenues. Two-thirds of the revenue
increase went towards debt reduction, and the remainder went towards spending
on priority areas.
    The Auditor General has audited the province's 2006-07 Consolidated
Financial Statements, consistent with the government's commitment to
accountability, transparency and fiscal responsibility.
    "The results of the 2006-07 Public Accounts support the view that I
expressed in my review of the Pre-Election Report on Ontario's Finances that
the fiscal planning process produces reasonable but prudent estimates of the
province's future fiscal situation," said Auditor General Jim McCarter.
    The first quarter update shows that the province is forecasting a $750
million surplus for the 2007-08 fiscal year if the reserve is not required.
    "We are seeing the results of four years of effective financial
management," Sorbara said. "We will continue to be prudent in our management
of Ontario's finances and will keep working to ensure that Ontario's economy
remains strong."

    Details of the 2006-07 provincial finances are contained in the 2006-2007
Ontario Public Accounts, Annual Report and Consolidated Financial Statements.
    Details of the 2007-08 provincial finances are contained in the 2007-08
First Quarter Ontario Finances.

    Disponible en français

                 For more information visit www.fin.gov.on.ca


                         THE 2006-07 PUBLIC ACCOUNTS

    The Public Accounts for each fiscal year are prepared under the direction
of the Minister of Finance, as required by the Ministry of Treasury and
Economics Act.
    The Public Accounts include an Annual Report, Consolidated Financial
Statements and summaries and analyses of Ontario's financial condition and
fiscal results. The following figures highlight the changes between the
government's projections for 2006-07 contained in the March 2006 Budget, the
2006-07 interim results reported in the 2007 Budget and the actual numbers
released today:

    FISCAL SUMMARY           2006 Budget   Interim at 2007
    ($ Billions)                Plan            Budget        Actual 2006-07
    Revenue                     85.7              89.1               90.4
    Expense                     87.1              88.8               88.1
    SURPLUS/(DEFICIT)           (1.4)              0.3                2.3
    Numbers may not add due to rounding.

    2006-07 Financial Highlights

    The province's financial results continued to improve, moving to a $2.3
billion surplus position in the year ended March 31, 2007, from a $5.5 billion
deficit in 2003-04.
    Revenues exceeded the level projected in the 2006-07 fiscal plan
presented in the 2006 Budget by $4.7 billion. This reflects increased transfer
payments from the federal government, a one-time $573 million gain from the
sale of Teranet Inc. and increased taxation revenues.
    The additional revenues allowed the Ontario government to increase its
in-year program expenditures on key priorities, particularly health care,
education, social services and public transit.
    Program expenses increased from the original plan by $1.6 billion while
the expense for interest on debt was $0.6 billion lower, for a net increase of
$1.0 billion in expenses.
    Because the increase in revenues was greater than the increase in
expenses, the province is reporting a $2.3 billion surplus. This surplus, like
last year's, is being used to reduce deficits accumulated by the province in
previous years.
    The results in Ontario are similar to those in most other Canadian
jurisdictions, including Nova Scotia, Saskatchewan, Alberta, and British
Columbia, each of which achieved surpluses in 2006-07 that went well beyond
budgetary plan.

    The Public Accounts include three supplementary volumes:

    -   Volume 1: Consolidated revenue fund schedules and ministry statements
        on an accrual basis
    -   Volume 2: Financial statements of selected crown corporations,
        boards, commissions, and other miscellaneous statements
    -   Volume 3: Detailed schedules of ministry payments

    The Office of the Auditor General reviews the information in the annual
report and the three supplementary volumes for consistency with the
information presented in the financial statements.

    Ontario Finances - First Quarter 2007-08

    First-quarter results indicate the fiscal outlook for 2007-08 has
improved by $400 million from the 2007-08 Budget Plan. The province is now
projecting a $750 million surplus if the reserve is not required.
    This improvement is primarily due to higher projected federal transfers
and tax revenues, combined with lower expected interest on debt expense. The
province's improved fiscal performance so far this year will also contribute
to a further improvement in Ontario's debt-to-GDP ratio.
    While the province is now on track to post a balanced budget in 2007-08
even if the reserve is required, the government remains prudent in its
medium-term fiscal targets and is on track with the medium-term fiscal outlook
presented in the 2007 Ontario Budget, which projected surpluses of $1.3
billion in 2008-09 and $1.6 billion in 2009-10 if the reserve is not required
in each year.
    The updated medium-term fiscal plan takes into account the portion of
higher revenue from 2006-07 that carries forward into 2007-08 and the
remaining years covered by the plan, and reflects the fact that most of the
increase is being invested in priority program areas. More information on the
province's medium-term fiscal plan and outlook will be provided in future
fiscal updates.

    Contact: Scott Blodgett
    Ministry of Finance

    Disponible en français


For further information:

For further information: Michael Arbour, Minister's Office, (416)
325-4138; Scott Blodgett, Ministry of Finance, (416) 325-0324

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