Ontario is facing a larger deficit and weaker economic growth in the coming years, the provincial finance minister said Thursday.
In his fall economic statement, Greg Sorbara said the government is on track to meet its 2006-07 deficit target of $1.9 billion.
However, the government has revised its deficit projection for 2007-08 to $2.2 billion — up from $1.5 billion, due to moderating short-term growth. The Liberal government also projected a defict of $1 billion for 2008-09.
Faced with a slowing U.S. economy, the province also reduced its gross domestic product growth projection for 2006 to 1.6 per cent, down from 2.3 per cent forecast in the 2006 budget.
Growth is expected to strengthen over the medium term to two per cent in 2007, three per cent in 2008 and 3.1 per cent in 2009.
Sorbara also blamed high oil prices and the rise in the Canadian dollar for the downgrade in the province's expectations.
However, the finance minister said the province is "in a solid position to withstand these challenges and make the transition to a period of stronger growth."
Opposition Leader John Tory called the economic outlook a "profoundly disappointing statement."
Tory pointed out that private-sector economists have projected that the province will lag the country in growth this year.
New Democratic Party Leader Howard Hampton said the Liberal plan offers no help for laid-off workers.
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