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Ontario may increase deficit to match federal projects

From Tuesday's Globe and Mail

TORONTO — The Ontario government is prepared to match federal funding for infrastructure projects, a move that could saddle the province with a larger deficit, says Finance Minister Dwight Duncan.

"We do agree that the need for stimulative infrastructure investment is important," he told reporters yesterday. "We have a huge infrastructure deficit, even with the money governments are putting out."

Premier Dalton McGuinty also commented last night on the unprecedented wave of spending plans announced by Prime Minister Stephen Harper's government ahead of today's federal budget, including a $4-billion infrastructure stimulus fund and $1.5-billion for training programs for laid-off workers.

Mr. McGuinty told reporters at a Toronto Board of Trade dinner last night that the federal measures will call for new spending on the part of the province.

"I think that's fair," he said. "The whole purpose of the stimulus package and our combined efforts is to make commitments to do things that we hadn't originally planned to do."

Mr. Duncan projected last fall that the province would end fiscal 2008-09 with a deficit of $500-million. He is now saying the deficit will be larger even without extra spending on infrastructure.

Ontario government officials have been seeking more funding from the federal government for infrastructure projects as well as training programs for laid-off workers.

Mr. Duncan attributed Ottawa's new generosity to a willingness to work with the provinces to help stimulate the economy. "It appears to be a conversion on the road to Damascus," he said.

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