TORONTO --  The Ontario Liberal government tabled the province’s first balanced budget in a decade on Thursday, extending the forecast for balance out over the next three fiscal years.

Finance Minister Charles Sousa’s last budget ahead of next June’s provincial election leaned heavily on social programs, in lieu of expansive new infrastructure spending plans or further new measures to address the heat in the Greater Toronto Area housing market.

The social spending is headlined by an additional $7 billion earmarked for healthcare over the course of the next three years, with expenditures rising at a 3.3 per cent annualized pace. This will bolster measures announced in the 2016 budget aimed at reducing wait times in provincial hospitals.

In spite of the newfound balance, Budget 2017 showed no path back to reducing Ontario’s total debt, which holds the inauspicious title of the world’s largest sub-sovereign debt load. Total provincial debt is now forecast to rise to $335.9 billion by 2019-20, up from the current $301.9 billion.

Instead, the provincial Liberals are taking a similar tact to their federal counterparts, emphasizing a decline in the province’s overall debt-to-GDP ratio over gross debt reduction. Budget 2017 forecasts a modest decline of that figure, sliding to 37.2 at the end of the forecast period in 2019-20 from the current 37.5. Ontario is targeting further declines in the next decade, stating a goal is to get debt-to-GDP back to prerecession levels by 2030.

As widely expected, Sousa did not table any further wholesale changes to housing legislation in Budget 2017, a week after announcing a slate of 16 measures in a bid to cool runaway home prices in the Greater Toronto Area. Budget 2017 instead emphasized the previously announced actions, which included a 15 per cent non-resident speculation tax in the Golden Horseshoe, leveraging surplus provincial land assets and rent controls on buildings built after 1991.

However, there are signs Ontario is bracing for a slowdown in the new housing space, as the province forecasts GDP growth in residential construction will slow to 0.2 per cent in 2017, after expanding at a more than seven per cent pace over the past two years. The province is also forecasting slower resale price appreciation, and fewer housing starts on a year-over-year basis.

Fiscal prospects over the course of the last year improved, with the province reporting a smaller-than-expected deficit of $1.5 billion in 2016-17, down from interim forecasts for a $4.3 billion shortfall. The Liberal government credits robust economic growth and the higher accompanying revenue as drivers of the figure.

FIVE THINGS YOU NEED TO KNOW ABOUT ONTARIO'S BUDGET

1. First balanced budget in a decade: Ontario Finance Minister Charles Sousa took his last occasion to table a budget before next year’s crucial provincial election to finally deliver balance to Ontario’s books. Sousa credited strong provincial economic growth in over the last year as a crucial driver of the balance, but Conservative Leader Patrick Brown openly questioned if creative accounting was necessary to achieving the balance. 
2. But no path to cut the deficit: In spite of the balance, there’s still no path for the province to cut down on the largest sub-sovereign debt load on the planet. Ontario’s provincial debt is set to further balloon to $335.9 billion in 2019-20, up from the current $301.9 billion as the province shovels money into new expenditures.
3. Liberals downplay debt and emphasize debt-to-GDP ratio: Much like their Federal counterparts, the provincial Liberals are emphasizing a slowly declining debt-to-GDP figure as more important than reducing the overall debt. Queen’s Park is forecasting a 30 basis point reduction over the course of their forecast period, dropping from this year’s 37.5 to 37.2 in 2019-20. The government is setting a goal of getting debt-to-GDP back to prerecession levels by 2030.
4. $7 billion more for healthcare: A further $7 billion is being earmarked for healthcare over the course of the next three years, cash earmarked for hospital development and a reduction in wait times. The move is a response to the looming demographic crunch caused by an aging baby boomer cohort.
5. No new housing measures: As widely expected, Charles Sousa had no wholesale changes to housing legislation left to unveil after announcing a slate of 16 measures aimed at the Golden Horseshoe last week. Central to those were a 15 per cent tax on foreign speculators, plans to release unused federal land for development and rent controls for units built after 1991.