Ottawa: The Canadian Taxpayers Federation reacted today to the announcement today by Finance Minister Greg Sorbara regarding the projected increase in the Ontario deficit. The Minister announced that revenue of $3.9 billion, to be "earned" by ending Ontario Hydro subsidies, cannot be applied to the province's books this year, but must be spread over the next twelve years. The 2005-06 deficit was projected to be $2.2 billion. It is now anticipated to be nearly $6 billion unless spending is reduced.

"This announcement is terrible news for taxpayers," said CTF Ontario Director Tasha Kheiriddin. "The government obviously didn't do its homework before budgeting, fell afoul of the provincial auditor, and now it will come up shorter than expected. The consequences for taxpayers will be bigger interest payments and less value for their tax dollar unless the government gets spending under control."

Previous budget projections had anticipated that the current government would add $12 billion to the Ontario debt over the course of its mandate. Unless the government finds savings in this year's budget to offset the disallowed Hydro revenue, that total new debt will rise to $16 billion by 2007-08.

"Responsibility for subsidizing Hydro rates rests with the previous government. And ending hydro subsidies was the right decision, but the McGuinty government should not have used creative accounting to inflate revenues," said Kheiriddin. "The Premier is hiding behind this revenue to avoid getting spending under control. It is unconscionable for this government to spend billions of taxpayers' dollars when the cupboard is bare."