2012-13 budget deficit smaller than forecast: Ontario

TORONTO: Ontario's minority Liberal government said on Tuesday it is reducing its budget deficit faster than projected, crediting higher corporate tax revenues and savings from the elimination of banked sick days for teachers.

The province's 2012-13 deficit is now expected to be C$11.9 billion ($11.98 billion), down from C$14.4 billion seen in the fall economic update. The government said its plan to balance the budget by 2017-18 is unchanged.

"Ontario continues to beat its deficit targets - a direct result of managing expenses," Finance Minister Dwight Duncan said in a statement.

Duncan, who told a business audience he will step down as finance minister after a new Liberal leader is elected this weekend, said it was possible the deficit will come in even lower than the revised target.

The 2012-13 deficit could fall to C$11.4 billion "barring any catastrophe" due to a C$500 million reserve built into budget, he said.

Duncan said private sector forecasters now expect Ontario's real GDP growth to rise 1.8 percent in 2013, down from the 2.3 percent seen in March.