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Economic Viewpoint

Ontario Budget 2024 Preview: Will Provincial Budget Season Trends Be Ontario’s Friends?

March 20, 2024
Marc Desormeaux
Principal Economist

Ontario’s 2024 budget will be released on March 26, and uncertainty abounds. The full effects of interest rate hikes haven’t yet been felt and there are questions about how public sector wage increases could impact the bottom line. At the same time, the tax base has once again been adjusted higher. All of this comes after Canada’s largest province delayed its plans to balance the books just five months ago in its Fall Economic Statement (FES).

Using four possible scenarios for Ontario’s public finances, we find that putting government ledgers back in the black may take some more time. But that’s only true if a number of things—such as a persistent shock to spending, further downward revenue revisions and even a recession—go wrong. Similarly, the province’s net debt burden appears unlikely to exceed pre‑pandemic highs.

Still, Ontario will need to juggle multiple competing objectives this budget season. These include presenting a credible plan to address the new spending pressures created by population growth and aging. The province will also have to manage high debt levels amid potentially higher-for-longer interest rates.

Meeting these challenges could require difficult trade‑offs, and Budget 2024 should tell us something about how the government plans to manage these trade‑offs over time.

NOTE TO READERS: The letters k, M and B are used in texts, graphs and tables to refer to thousands, millions and billions respectively. IMPORTANT: This document is based on public information and may under no circumstances be used or construed as a commitment by Desjardins Group. While the information provided has been determined on the basis of data obtained from sources that are deemed to be reliable, Desjardins Group in no way warrants that the information is accurate or complete. The document is provided solely for information purposes and does not constitute an offer or solicitation for purchase or sale. Desjardins Group takes no responsibility for the consequences of any decision whatsoever made on the basis of the data contained herein and does not hereby undertake to provide any advice, notably in the area of investment services. Data on prices and margins is provided for information purposes and may be modified at any time based on such factors as market conditions. The past performances and projections expressed herein are no guarantee of future performance. Unless otherwise indicated, the opinions and forecasts contained herein are those of the document’s authors and do not represent the opinions of any other person or the official position of Desjardins Group.