(Adds economist comments, details, byline)
By Leah Schnurr
TORONTO, April 27 Canada's province of Ontario
said on Thursday it would run a balanced budget this year for
the first time since the global financial crisis and unveiled
plans for universal drug coverage for children and young people.
Ontario, Canada's most populous province, said it would
balance the books in the fiscal year 2017-18. That includes a
C$600 million ($441 million) reserve, meaning the province could
run a small surplus if it was not used.
Ontario said it would run balanced budgets in the two
subsequent years, with a reserve of C$600 million in 2018-19 and
C$900 million in 2019-20.
The Ontario Liberals, who control a majority in the
government and are up for election next year, released a budget
including more spending on healthcare and extended its
infrastructure plan by an extra year.
It did not unveil further measures to rein in the hot
housing market in Toronto, after introducing a tax on foreign
home buyers earlier this month.
The province, which has one of the largest sub-sovereign
debts in the world, also passed on paying down its debt, which
will increase to C$301.9 billion as of March 2017. Its long-term
borrowing will be C$26.4 billion in 2017-18.
Home to manufacturers and automakers, Ontario had run a
deficit every year since 2008-09 as it was hit by the financial
Helped by a strong housing market, cheaper oil and a weaker
Canadian dollar, the province has rebounded and forecast
economic growth of 2.3 percent in 2017 and 2.1 percent in 2018.
It also expected slowing home prices and acknowledged the
risks to the outlook, including uncertainty around U.S. economic
policy and potential global trade restrictions that could dampen
Analysts were unsure the economic environment for the
province would get much better and said it could be using its
higher revenue to build more fiscal capacity.
Michael Dolega, senior economist at TD Bank, said some of
the province's forecasts might be too rosy, including
expectations for business investment to rebound.
"There are a lot of risks out there both for Ontario and
outside of its borders that might affect the economic picture,"
The province said it would launch prescription drug coverage
for Ontarians aged 24 and under as of January 2018, which would
be available to families regardless of income.
The province currently covers drugs for seniors and people
on social assistance.
(Additional reporting by Fergal Smith; Editing by Chris Reese
and Andrew Hay)