* Unclear if budget will be supported by opposition
* Government sees balanced budget by 2017-18
* Government limits expense growth
By Cameron French
TORONTO, May 2 Ontario's minority Liberal
government unveiled a budget on Thursday that projected a
narrower-than-expected 2013-14 deficit and included measures
aimed at securing opposition support and preventing an early
election for Premier Kathleen Wynne.
However, it was not clear whether the budget will receive
enough support to keep the Liberals in power, as opposition New
Democratic Party leader Andrea Horwath said she would consult
with voters before deciding what to.
Canada's most populous province, which accounts for about 40
percent of the country's economy, will run a budget shortfall of
C$11.7 billion ($11.60 billion) in 2013-14 under the C$127
billion budget plan unveiled by Finance Minister Charles Sousa,
who succeeded Dwight Duncan in February.
The deficit is below the government's year-ago forecast of
C$12.8 billion, but above its 2012-13 shortfall of C$9.8
With just 51 seats in the 107-seat Ontario legislature,
Wynne's Liberals need the support of at least one opposition
party to pass the budget and avert an automatic election.
The right-leaning Progressive Conservatives, who hold the
second-most seats, said they will not support the document,
while Horwath gave it a lukewarm reception, even as she
acknowledged the government listened to many the demands she has
made in recent weeks.
"This budget clearly reflects the budget proposal we put
forward ... but we want to make sure (voters) get those
results," she told reporters.
Wynne, whose party's popularity jumped when she took over
from longtime Liberal Premier Dalton McGuinty in January, has
since watched poll numbers move in favor of the PCs, as her
government struggled with the fallout of a power generation
The PCs currently enjoy 36 percent support, followed by 33
percent for the Liberals and 26 percent for the NDP, according
to an aggregation of recent polls published in the Globe & Mail
newspaper on Tuesday.
As such, the budget featured more than a little input from
NDP leader Horwath in certain areas, most notably a pledge to
cut auto insurance premiums 15 percent, as well as a C$295
million youth job creation program.
"We recognize that we're in a minority situation and we need
to work with all sides of the house," Sousa told reporters.
The auto insurance reduction follows ballooning premiums in
recent years, which insurers have blamed on rising claims and
Sousa said he has been in touch with insurance companies -
Ontario's largest publicly traded auto insurer is Intact
Financial Corp - and hopes to see rates start to come
down within a year.
PATH TO BALANCED BUDGET
The deficit is seen shrinking to C$10.1 billion in 2014-15
and C$7.2 billion the following year, and disappearing by
2017-18, a projection that relies on average annual revenue
increases of 3 percent over the next three years and expense
growth of just 1.8 percent.
"To maintain that (expense growth), it's going to be very
challenging," said Jonathan Bendiner, an economist at TD
Ontario's deficits spiraled higher in the wake of the 2008
financial crisis when global automakers shed jobs, sending
tremors through the province's industrial base.
Public long-term borrowing during 2013-14 should total
C$33.4 billion, down C$3.2 billion from 2012-13 and C$5.7 below
forecasts, which the government attributed to
lower-than-projected deficits in 2012-13 and 2013-14.
The government's total public debt is expected to hit
C$272.8 billion next year.
The budget extends a freeze on corporate tax implemented in
the previous year's budget and will extend an accelerated
capital cost allowance program for manufacturers at a cost of
C$265 million over three years.