Source: The Canadian Press

Ontario’s deficit came in substantially less than forecast but the province’s debt is now at a record $212 billion, a figure that had the opposition crying foul Monday.

The Liberal government racked up a deficit of $19.3 billion in 2009-10, $2 billion less than forecast in the March budget.

Still, public accounts released Monday show the province’s debt grew by $35 billion to $212.1 billion, with the increase going mainly to financing the deficit.

Ontario’s debt was $138.8 billion in 2003-04, the first full year in office for the Liberals.

Despite the red ink, Finance Minister Dwight Duncan cast the lower-than-expected deficit figure as a positive indicator for the future.

“Our deficit-to-GDP ratios and our deficit-to-revenue ratios are so much better than most of the western world, (which) I think is a good sign,” Duncan said after the public accounts were released.

“We’ve laid out an eight-year plan to balance the budget … and this actually puts us in a solid position moving forward.”

The opposition parties were not as impressed with the economic performance of the Liberal government.

“This deficit is putting us very close as we move forward for this government to double the cumulated debt in their term of office,” said Progressive Conservative critic Garfield Dunlop.

“I don’t really think that’s good news for the citizens of the province of Ontario.”

The New Democrats said Duncan shouldn’t be taking credit for the lower-than-forecast deficit figure.

“I mean he’s cut back money to hospitals, he’s cut back money to people on welfare with the special diet allowance, and the Big Three auto companies have paid back some of the loan that I don’t think he was planning on getting,” said NDP critic Michael Prue.

“I don’t think it’s anything he did.”

The Canadian Taxpayers’ Federation said people in Ontario should be worried the Liberals will use their financial problems to increase taxes yet again.

“We haven’t seen any movement from the McGuinty government on the (spending) reduction side, just on the tax hike side,” said federation director Kevin Gaudet.

The public accounts report from the Ministry of Finance said tax revenues were $6.4 billion below budget forecasts in 2009-10, reflecting the lagging impact of the recession and a weaker-than-expected economic performance.

The 2010 budget set out a timetable to eliminate the red ink and return Ontario to balanced books by 2017-18, and Duncan said he couldn’t talk about moving up that timeline despite the fact last year’s deficit was $2 billion under forecast.

“I’ve not got solid numbers upon which I can make those predictions right now and frankly, having been finance minister throughout 2008 and 2009 I’ve learned, perhaps better than most, how volatile revenues can be,” he said.

“Remember, we had a 48% decline in corporate tax revenues in one year.”

Ontario’s real gross domestic product shrank by 3% in 2009, while total provincial expenses for the year were $115.1 billion, just slightly below budget predictions.