To understand how quickly the economic fortunes of Ontario have changed in the past few months and how tightly the province's purse strings are pulled, look no further than the Ministry of Tourism.
The ministry receives 27 per cent less money in this budget than it did a year earlier. The cut comes even as the government recognizes that the strong Canadian dollar and increased border security mean fewer travellers are coming up from the United States, creating significant challenges for the sector.
In better times, the government might invest in marketing campaigns to attract more tourists. But the Liberals find themselves doing a balancing act to keep spending growth lower than revenue growth as economic forecasts darken.
The province itself is forecasting significantly slower gross domestic product growth this year, down to 1.1 per cent from 2.1 per cent in 2007. It also expects unemployment to rise slightly to 6.6 per cent, up from 6.4 per cent last year.
Tourism is one of several ministries that will have to do with less money so the government can proceed with initiatives in skills training, health care and municipal infrastructure.
Other ministries with shrinking budgets include citizenship and immigration, natural resources and the Attorney-General, as well as the Auditor-General's office.
The cuts are necessary because the Liberals expect to collect only $357-million more in revenue during the next fiscal year compared with the current one, even as it pumps an additional $2.3-billion into health care and $1-billion into municipal infrastructure, and as it earmarks $1.5-billion over three years for skills training.
"Our numbers are prudent and balanced," said Dwight Duncan, Ontario's Minister of Finance. "We have the plan to respond to whatever transpires in the next year."
Mr. Duncan is projecting balanced budgets for the next three years, but no surpluses.
Ontario's one-time expenditures are being reduced significantly in this budget. For the fiscal year ending this month, the government estimates it will have spent $6.27-billion on one-time items, such as transit projects and assistance to the food and agriculture industries. That category of spending falls to $3.31-billion in this budget.
The opposition criticized the amount of money still going to one-time projects. "Municipalities, transit systems, housing, farmers - the money for them will be here today and gone tomorrow. No security, no consistency, no ability to plan," said John Tory, Leader of the Progressive Conservatives.
Last year, the Ministry of Tourism received about $40-million in one-time payments for capital expenditures in Ottawa and Niagara Falls, and another $30-million for a marketing project. Those projects won't be replaced this year, as the ministry's budget decreases to $176.1-million from $242.5-million last fiscal year and $204-million before that.
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