Sousa used a $1-billion reserve to offset lower-than-projected tax revenues and transfer payments from the federal government to trim the deficit, which he forecast will grow to $12.5-billion for 2014-15.
"The federal government admitted Ontario's cuts in transfer payments was a reflection of our diversified economy and our ability to source revenue from other sources, whereas Alberta and Quebec were more restricted and so they got increases in their transfer payments," he said.
"Ontario was the only one that got cut year over year, and that will be affecting our budget going forward."
The public accounts — the actual year-end numbers — show the Liberal government beat its deficit target for the fifth year in a row, and is on track to balance its books by 2017-18 as promised, added Sousa.
"Our plan to eliminate the deficit includes annual program savings targets of $250 million for 2014-15 and $500 million for each of the next two years," he said.
Ontario's debt grew to $295.7 billion in 2014 from $281 billion in 2013, while the net debt-to-GDP ratio fell slightly to 38.6 per cent. Sousa said the goal is to get that ratio back to its pre-recession level of 27 per cent.
"We are the lowest cost government anywhere in Canada because of the measures we've taken, and as a result we have the ability to afford that debt level," he said.
Ontario will keep spending on infrastructure, public transit and corporate grants while controlling spending to cut the deficit, added Sousa.
"You've got to stimulate economic growth in order to enable us to afford the debt and invest in our future," he said.
However, the opposition parties said it's clear the Liberals have a serious spending problem that they either can't or won't address.
"They talk about running a lean ship but what we've seen is spending that's up by $4 billion," said Progressive Conservative finance critic Vic Fedeli. "They're on the wrong track. They say one thing but do the other."
The public accounts figures show revenues from personal income taxes were up $1.4 billion, but corporate taxes were down over $600 million while sales tax revenue was also down about $500 million.
The New Democrats said the Liberals need to raise taxes on corporations in order to get a steady revenue stream to eliminate the deficit.
"Everyday Ontarians are paying more and we want to see a solid plan to ensure that corporations are paying their fair share as well," said NDP finance critic Catherine Fife.
"Using a billion dollars and raiding the reserve is not a sustainable plan to get the province back on track."
One bright spot on the government's revenue side was a $219 million jump in the amount Ontario Power Generation turns over in lieu of taxes — up to $543 million — because of the cold winter. However, revenue from mining profits tax fell nearly $99 million to just $11.7 million.
"Commodity prices fell, investments in the industry were not as great and it's a volatile industry," Sousa said by way of explanation for the dramatic drop in mining tax revenues.
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