SUBSCRIBE | ADVERTISE | HOME | QUARTERLY

Posted Thursday July 11, 2019


___________________________
Ontario's Economy

FAO Releases commentary assessing the impact of an economic downturn on the government’s budget plan

Peter Weltman, Ontario’s Financial Accountability Officer, has just released a commentary that assesses the impact of an economic downturn on the government’s budget plan.

The FAO constructed a hypothetical scenario in which the Ontario economy experiences a moderate recession to stress test the vulnerability of the government’s budget plan to an economic downturn.

Under this recession scenario, government revenues would decline while spending on some programs, such as employment training and social services, would be expected to increase. Taken together, the FAO estimates the deficit would increase to $16.5 billion in 2021-22. While the budget deficit would be expected to improve steadily as the economy recovers, a budget deficit of over $4 billion would still be projected in 2023-24, the year the government intends to achieve balance.

Due to the weaker economic activity, Ontario would be expected to accumulate almost $31 billion in additional debt by 2023-24. The combination of higher debt and slower economic growth would increase Ontario’s net debt-to-GDP ratio from 41 per cent this year to nearly 45 per cent by 2021-22.

Based on the FAO’s analysis, the government’s fiscal plan is vulnerable to an economic downturn. Government commitments to balance the budget and limit increases in the debt-to-GDP ratio would be put at risk in the event of a moderate recession.

To learn more about the FAO’s analysis, click here.








exchangemagazine.com is distributed twice weekly; Tuesday and Thursday


Not a Subscriber? Receive more articles on business issues
Sent directly to your email in-box.


contact us

Publisher is Exchange Business Communication Inc.
No part of this article may be reproduced without written permission from the publisher.
Email Publisher

ISSN 0824-45
Copyright, 2019

Share Your Story: pressrelease @ exchangemagazine.com
Expand Your Reach:
advertise @ exchangemagazine.com
Publisher: Exchange Business Communication Inc., PO Box 248, Waterloo, Ontario, Canada
Email Editor

Content published on this site represents the opinion of the individual, organization and/or source provider. Exchangemagazine.com is a online daily journal of Exchange Business Communication Inc. (1997) Publishers of Exchange Magazine est. 1983. Privacy Policy. Copyright of Exchange produced editorial is the copyright of Exchange Business Communications Inc. 2019. Submitted editorials, comments and releases are copyright of respective source(s).