The board's fiscal snapshot of Ontario said that a slowdown in revenue growth will likely mean Ontario can't eliminate its $12.5-billion deficit by 2017-18 "despite its ambitious spending control plan."
Without more spending cuts or tax increases Ontario could fall $2.4 billion short of reaching its goal, the report said. The government will have to make some tough decisions and go beyond its spending restraint plan as outlined in the 2014 budget, said Matthew Stewart, an associate director of economic forecasting.
"I don't think it's impossible at all," he said.
"They do have a number of options, but it will certainly require more than, I think, than they've currently got in their budget."
The Liberal government insists it's on track to eliminate the deficit in 2017-18.
"For each of the last five years our government's prudent approach has led to significantly lower than projected deficits," said Susie Heath, a spokeswoman for Finance Minister Charles Sousa.
"The minister and the new president of the Treasury Board will continue to transform government and ensure the savings targets we have established in the budget are met."
Stewart said balance could be achieved if the government pushes spending restraint to a fourth year, in 2018-19, or if it increases taxes to make up the difference, or if it reins in spending even further.
"They can continue to do what they have done in the past, which is protect health care and education as much as possible, and then continue to cut other spending," he said. "That's probably the most likely course."
The conference board notes the province's program spending increased by an annual average of 5.1 per cent over the last 10 years.
Progressive Conservative critic Vic Fedeli doubts the government will take aim at spending.
"They're addicted to spending," he said. "They say one thing but do the other. That's what we've seen so far."
NDP critic Catherine Fife said in a statement that the conference board report raises "serious questions'' about the government's deficit targets. The New Democrats have said the Liberals need to raise taxes on corporations in order to get a steady revenue stream to eliminate the deficit.
Ontario's deficit for fiscal 2013-14 came in at $10.5 billion, $800 million lower than forecast, after a $1-billion reserve was used to offset lower-than-projected tax revenues and transfer payments from the federal government.
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