The Province of Ontario is staring down the barrel of a $4.5B deficit according to its third-quarter finances, which were unveiled by Finance Minister Peter Bethlenfalvy on Monday.

Bethlenfalvy told a room of reporters that the $4.5B deficit being projected for the 2023-2024 fiscal year marks an improvement of $1.1B from the fall economic statement he tabled this past November.

He said that this improvement is primarily due to the current revenue outlook. For the 2023-2024 fiscal year, revenue is projected at $202.7B, which is $0.9B higher than expected in November.

“And this is due to stronger-than-expected broader public sector revenues, slightly higher taxation revenue, and transfers from the Government of Canada,” Bethlenfalvy added.

Digging a little deeper into Monday’s budget reveals that revenue attributed to taxation is up by a “modest” $0.1B compared to November’s fall economic statement.

“But there have been significant updates in key taxation revenue sources,” the document notes, adding that “key changes to the taxation revenue outlook” include personal income tax, sales tax, the Ontario Health Premium, and the Employer Health Tax. Projected revenues for those four streams have increased by $2.5B, $2B, $124M, and $89M, respectively, compared to what was projected in November.

Notably, the document shows that projected revenues from Ontario’s Land Transfer Tax have plunged by $119M, “reflecting weaker-than-expected activity in the housing market.” Projected revenues from the gasoline and fuel taxes and corporation tax are also down $265M and $4.2B, respectively.

Meanwhile, the Province is projecting around $206B in total expense for the fiscal year, which is $1.6B higher than what was projected in November. Overall program expense is projected at $193B, which is $2.8B higher than it was in November, and includes $704M that has been allocated to Toronto through the ‘new deal’ Mayor Olivia Chow struck with Premier Doug Ford. Those funds include $504M for transit and transportation and $200M in supports for shelters and homelessness.

Bethlenfalvy said that the Province will deliver its next economic and fiscal update “on or before March 31” as part of the 2024 budget.