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2011 Provincial Budget Response

CGA Ontario stresses continued deficit reduction

TORONTO, ON, March 29, 2010 — The Certified General Accountants of Ontario (CGA Ontario) acknowledges the efforts put forth by the provincial government in creating a budget that strives to eliminate the deficit by 2017-18 while protecting education and health care, yet it falls short of what some would define as ideal.

Fiscal Performance – The budget projects a deficit of $16.7 billion for 2010-11 – $3 billion lower than projected last year.  Although the economy is recovering, it alone will not be enough to eliminate the growing deficit, on-going fiscal prudence and discipline is required.

“Without prompt return to balanced budgets, there is concern that growing debt will burden Ontarians,” said Doug Brooks, FCGA, CEO, CGA Ontario. “It could also limit the government’s ability to invest in what we see as priority areas, such as public infrastructure and labour development to maintain Ontario’s economic competitiveness.”

The creation of a Commission on Broader Public Sector Reform will provide insight on further elimination of the deficit while protecting education and health care.  Chaired by Don Drummond, former chief economist of TD Bank, and former Assistant Deputy Minister at Finance Canada, the Commission is expected to report its findings to the Minister of Finance in time to inform the development of next year’s provincial budget.

Economic performance – The Association is pleased to see the Ontario economy is turning a corner with a rise in gross domestic product (GDP) by an estimated 2.8 per cent in 2010, with all private-sector forecasters expected to sustain growth, and a private-sector forecast of 2.6 per cent economic growth in 2011 and 2.8 per cent in 2012.

HST – Research conducted by economist Michael Smart has identified that about two-thirds of business savings from HST had been passed through to consumers within only six months after the implementation of HST.

Reduced tax rates for new business investments make it easier and more attractive for businesses to invest in – investments by the private sector in buildings, machinery and equipment rose by 7.4 per cent in 2010. Further to that Ontario exports are becoming more innovative and merchandise exports increased 16 per cent last year – supported by an increase in total manufacturing sales of more than 11 per cent in 2010.

Along with broadening export markets, there is a need to increase the number of companies that leverage exports. CGA Ontario believes there is an opportunity to grow our economy by developing an economic strategy and regulatory framework that fosters strong entrepreneurial spirit, with particular emphasis on the SME sector. Much of this can be accomplished through education and the dissemination of information that illustrates the benefits of thinking internationally.

“Currently, the small and medium-sized enterprise (SME) sector employs 50 per cent of Ontario’s workforce but only represents 35 percent of its exports and these exports are derived from only eight per cent of SMEs” said Ted Wigdor, vice-president, government and corporate affairs, CGA Ontario.”

Education – CGA Ontario was pleased to see an investment in post-secondary education, including the creation of 60,000+ openings for student enrolment in colleges and universities across the province.

Healthcare – CGA Ontario applauds the government for identifying measures to recognize $1.5 billion in savings over the next three fiscal years through operational efficiencies and consultation; streamlining programs; and the healthcare system.

It’s essential that the government benchmark growing healthcare costs by a measurable matrix such as the GDP in effort to keep spending realistic. Although the government is on the right track, there needs to be greater effort placed on managing escalating healthcare costs.

“We look to the Ontario government to accelerate deficit reductions over the next three years and return to balanced budgets prior to 2017-18. The long term strategy must focus on reducing the accumulated debt by a minimum of $2 billion annually,” said Ted Wigdor, vice-president, government and corporate affairs.”

Provincial budget recommendations put forth by CGA Ontario http://www.cga-ontario.org/assets/file/CGA_Ontario_pre-budget_submission_2011.pdf

Certified general accountants see more than numbers. They bring more than a century of experience delivering accounting and finance expertise to all sectors of the Ontario economy. Whether it’s financial forecasting or helping in the acquisition of a new business, a certified general accountant’s skills can lead to great success in these ever-changing economic times. www.cga-ontario.org / www.cga-more.org

CGA Ontario is a self-governing body that grants the exclusive rights to the CGA designation and controls the professional standards, conduct and discipline of its 20,000 certified general accountants (CGAs) and 8,000 students in the CGA program of professional studies in the province of Ontario.
 

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For more information or to speak with a budget expert, contact:
Amy Mulhern, Manager, Public Relation, CGA Ontario
Telephone: 416-544-4781 / 1-800-668-1454 ext. 8311 / Mobile: 416-606-5860
Email: amulhern@cga-ontario.org