Ontario Finance Minister Peter Bethlenfalvy rose in the Ontario legislature yesterday afternoon and tabled the Ford government’s long awaited provincial budget. A month later than usual, the budget nicely coincides with the imminent writ drop for the upcoming June 2nd Ontario vote. Given the fact the government has no plans to pass the budget before Election Day, this is for all intents and purposes the PC Party’s campaign platform. For all the budget commitments to come to fruition, Ontarians will have to re-elect the Ford government for another 4-year majority term. You can read the full budget here.
THE PRIMARY COMMITMENTS
The budget details were broken down into 5 different sections; here are some notable commitments:
Rebuilding Ontario’s Economy
· Building a permanent highway to the Ring of Fire for mineral extraction
· Investing in critical minerals innovation
· Investing in transformative hybrid and electric vehicle production
· Investing in a Food Security and Supply Chain Fund
· Natural gas expansion and building out Ontario’s nuclear advantage
Working for Workers
· Investing more in the Skilled Trades Strategy
· Expanding college degree granting to increase job-ready graduates
· Investing more in employment and training programs
· Increasing minimum wage
Building Highways & Critical Infrastructure
· Investing in major highway expansion throughout Ontario
· Investing $61B over 10 years in public transit
· Supporting municipalities for vital municipal public services
· Investing over $1B for new schools for the coming year
Keeping Costs Down
· New legislation to speed up more housing development
· Increasing land capacity at the Ontario Land Tribunal & Landlord Tenant Board
· Cutting gas taxes by 5.7 cents per litre starting July 1st
· Eliminating annual license plate stickers
· Announcing a new low-income tax credit
· Highlighting the recently announced childcare deal brought in with the federal government
A Plan to Stay Open
· Introducing incentives to retain and recruit more nurses in Ontario
· Investments to add 8,600 health care workers to the system
· Building Ontario’s domestic capacity to manufacture personal protective equipment
· Additional investments in home care to keep people living at home
· Introducing a new Seniors Care at Home Tax Credit
· Making a multi-year investment to expand hospital capacity
TAXES
While there were no major announcements around general tax cuts or increases (i.e., income taxes, corporate taxes, or sales taxes) there were several commitments to reduce taxes for different groups of Ontarians, including:
· Tax credits for seniors to stay in their homes longer
· Tax cuts for gasoline and fuel
· Enhancing the Low-Income Individuals and Families Tax (LIFT) credit
· Increased tax credit for the television and film industries
There were a few other niche-oriented tax credits and minor cuts for small sections of the economy but nothing significant for the masses. Missing was the long promised 20% cut for middle class income earners.
An excellent and detailed summary of the all the tax implications of this budget was printed online here from PWC.
DEFICIT PROJECTIONS
Like most election year budgets, this one is loaded with spending commitments and promises. It’s a far cry from the fiscally prudent and cost cutting language the PC Party used in the lead up to the 2018 election. Yesterday’s budget projects a $20B deficit next year, up from around $14B deficit incurred from 2021-22. Despite the economy rebounding faster than expected, this anticipated increase in the deficit is a direct consequence of the massive boost in spending initiatives across the board.
Yesterday’s budget is forecasting an annual budget deficit of around $7B by 2024/25.
OPPOSITION PARTY RESPONSE
NDP leader Andrea Horwath was critical of the budget suggesting that the PC government can’t be trusted and that this budget will quickly be replaced with more cost cutting alternatives if the Ford government is re-elected. The Del Duca Liberals slammed the budget for not being creative in commitments around healthcare and education. The reality is both opposition parties will find it difficult to get attention, given the PC party has temporarily abandoned its focus on cutting spending in order to balance the budget. We will have to wait to see what changes may be implemented before this budget gets passed into law.
WHAT’S NEXT
Over the coming 6 weeks provincial candidates from all parties will spread out across the province to lobby for your vote. In yesterday’s budget Finance Minister Bethlenfalvy repeatedly referred to the PC government as the party that “gets it done” in response to various big capital investments and infrastructure projects. It’s clear that the Ford government will use this mantra going forward and into the campaign.
Election campaigns are an excellent time for stakeholders and organizations to lobby for policy commitments. While the budget clearly lays out a plan for the next 2-3 years, there is lots of room for changes should the PC’s win re-election. Simultaneously, getting the opposition parties to raise your issue during an election campaign may generate significant exposure for your advocacy issues.
If the Ford government is successful in winning a second term, then we can expect a brief summer session in the legislature to pass this budget bill into law before they return for the scheduled fall session after Labour Day. There will also be many new cabinet members as several high-profile ministers in the Ford government are not seeking re-election.
We at Grassroots will be monitoring the upcoming provincial campaign and profiling several key ridings, including the candidates who may soon be new MPPs at the legislature this fall. At this point, we anticipate the Ford government will be re-elected for another 4-year majority term. Yet it seems election campaigns usually have some unanticipated events that influence the outcome; time will tell.
More insights to come in our weekly election commentaries, starting next week.
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