TORONTO — Ontario’s budget watchdog is warning that balancing the province’s budget without raising taxes, will be “extremely challenging.”

In a deep dive on health care spending and the pressures that will help to drive up the health budget, Financial Accountability Officer Peter Weltman warns that the Ontario government will have to significantly restrain spending increases even as other pressures would push spending higher.

Weltman’s report, released Wednesday morning, says that pressures from population growth and aging, and inflation will add 4.6 per cent to health care costs annually over the next four years.

However, he said because of the promise to balance the budget, the government will have to swallow those extra costs in health care while keeping spending increases to 1.2 per cent annually.

“We haven’t seen that kind of spending restraint since the late 1990s, or mid-90s,” Weltman told iPolitics in an interview.

“The main take away is that it’s going to be extremely challenging,” he said. “I’m not saying it can’t be done but it’s going to be very challenging.”

He also said that kind of spending restraint will have a “significant impact on anybody that’s using the health care system.”

[READ MORE: Minister maintains Ontario will avoid pitfalls of health care amalgamation]

In a statement, Health Minister Christine Elliott said her government’s planned health care transformation and the centralization of administration will help address the budget pressures.

“We recognize the depth of the challenge ahead of us, however the people of Ontario have and always will be our government’s priority and focus. We will create a public health care system that works for everyone,” Elliott said.

Elliott said the system doesn’t have the “right mix” of beds, services or digital tools. She said her overhaul will “fix and strengthen our public health care system, and centre it around the patient.”

Health care is the biggest line item in Ontario’s budget. Weltman’s report projects that the province will spend $61.3 billion on health care in the current fiscal year.

Follow @MariekeWalsh