Budget timing opens the door to manipulation, warns Ontario Alternative Budget

March 9, 2006

TORONTO—Despite all of Dalton McGuinty’s talk about taking politics out of budgets, the McGuinty government’s announcement to bring down its budget on March 23—a full two months earlier than last year’s and a month ahead of the normal budget schedule—is the most politically transparent move in recent history, says an Ontario Alternative Budget Technical Paper released today by the Canadian Centre for Policy Alternatives.

Authored by OAB Co-chair and CCPA Research Associate Hugh Mackenzie, the report claims the real reason behind the unprecedented budget timing is the much greater scope for budget manipulation available to the government by presenting the budget before the end of the previous fiscal year.

“The truth is that Ontario is having a much better year in 2005-6 than was forecast at budget time last year,” says Mackenzie. “While this better performance is good news for the province, it is potentially a wasted opportunity for the provincial Liberals. If the government were to let the current year run its course, it would have a sub-$1 billion deficit in 2005-6 and would be facing a projected increase in the deficit in the pre-election fiscal year of 2006-7.

“The timing of the budget is designed to take care of that problem,” Mackenzie explains. “The government is not looking to produce a ‘good news’ budget for 2006-7 but to create the foundation for a ‘good news’ budget in March 2007, on the eve of the 2007 election. In other words, we are being set up for the next election.”

Mackenzie expects the government to greatly increase expenditures in the last quarter of 2005-6 in order to absorb some of the fiscal good news.


Ontario’s Fiscal Windfall: Setting Up Good News This Year, or Next? is available on the CCPA web site at http://www.policyalternatives.ca

For more information contact Kerri-Anne Finn, CCPA Communications Officer, at 613-563-1341 x306.