Ontario: Budget 2022

As was broadly expected, the Government of Ontario published a much-improved economic forecast in Budget 2022. Helped out by an economy surging back from COVID-19 lockdowns and high inflation, revenues topped expectations, providing fiscal room to introduce cuts to taxes and fees as well as increase spending. The government did both. As a result, the path for the budget balance as a share of GDP is broadly in line with that published in late 2021 (graph 1). This has ensured the outlook for Ontario’s net debt-to-GDP ratio remains broadly flat over the forecast, only returning to the pre-COVID level when the provincial government returns to a budget surplus in the 2027–2028 fiscal year.