May 21 (Bloomberg) -- Ontario Premier Kathleen Wynne said she won’t levy new taxes to balance the budget of Canada’s most populous province.
Wynne, speaking in an interview today at Bloomberg’s Canada Economic Summit in Toronto, said it “is fantastic news” the leader of Ontario’s opposition New Democratic Party, Andrea Horwath, agreed to support the governing Liberal Party’s budget today.
“There won’t be an election right now,” Wynne said. “I expect people who elected us believe we will work together.” Still, she said the economic recovery has lagged behind expecations, and she said the Bank of Canada would leave her province vulnerable if it increases its benchmark lending rate.
Wynne, 60, is seeking to cut spending even as the province copes with an underperforming economy and a jobless rate that exceeds the national average.
The province projects its economy will grow 1.5 percent this year and 2.3 percent in 2014. That compares with national growth of 1.6 percent this year and 2.4 percent next, according to economists surveyed by Bloomberg.
Ontario’s has an unemployment rate of 7.7 percent, compared with a national average of 7.2 percent, according to Statistics Canada. Ontario’s jobless rate surpassed the federal level in 2006, the first time it was higher than the national average, according to Bloomberg records dating to 1976.
‘Not as Robust’
“The recovery has not been as fast or as robust as we would have liked,” Wynne said. “We’re dealing with a fundamentally healthy economy here in Ontario, but we need to be very vigilante as a government to make sure we’re watching for those opportunities to support the sectors that can grow.”
Moody’s Investors Service downgraded the province’s credit rating last year, citing a growing debt burden and declining economic growth.
In the May 2 budget, Ontario Finance Minister Charles Sousa reiterated the government’s pledge to eliminate the province’s deficit by the fiscal year starting April 2017.
Still, Sousa said the deficit will rise this fiscal year to C$11.7 billion ($11.3 billion) from C$9.8 billion last fiscal year.
The province’s fiscal plan includes several measures proposed by the opposition New Democratic Party, such as cuts auto insurance premiums and create a youth employment program.
Horwath said today her party is prepared to support the budget.
Pass the Budget
The Liberals hold 51 of the 107 seats in the provincial legislature, meaning they need some support from opposition lawmakers to pass the budget and remain in power. The next vote may come as early as next week.
Wynne became the first woman premier of the country’s most populous province on Feb. 11 after winning the leadership of the Ontario Liberal Party. Her predecessor Dalton McGuinty stepped down in October amid controversy over canceled power plants and an inability to carry out budget cuts in his minority government.
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