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Ontario delays balanced budget until right before 2026 election

Ontario is facing a larger than anticipated deficit but the Doug Ford government still plans to balance its books before the next provincial election.

The 2024 budget, titled “Building a Better Ontario” and released Tuesday afternoon, builds on provincial promises made over the last year. It places a focus on infrastructure and healthcare spending while also ensuring taxpayers don’t have to reach into their pocketbooks.

“We’re sticking to our plan,” the 200-page document stresses, noting that Ontario “continues to face economic uncertainty.”

 

The government’s budget has surpassed last year’s in terms of total spending, making it the largest in the province’s history at about $214.5 billion. Close to $194.5 billion of that is for programming.

At the same time, the province’s deficit for the last fiscal year is projected to land at about $3 billion, which is significantly higher than the $1.3 billion projected in the 2023 budget but less than the third-quarter projection of $4.5 billion.

 

The province is forecasting a spike in the deficit for 2024-25, with Ontario landing about $9.8 billion in the red.

This will lower to $4.6 billion in 2025-26, with a small $500,000 surplus projected in 2026-27, just in time for the next election.

Last year, the government said it would balance the budget by 2025, but officials noted a “fiscal deterioration” that was “beyond the province’s control.”

“It’s a plan that provides certainty to markets and confidence to people that their government is ready to face any challenge the global economy might throw our way,” Finance Minister Peter Bethlenfalvy told reporters on Tuesday.

“I think fiscally we’re being responsible. We’re also investing in the things that matter to the people of Ontario and our plan to build. And I just believe you can walk and chew at the same time.”

Peter Bethlenfalvy

The largest expense for the 2024 fiscal year is in healthcare, where the government has pledged about $85 billion in funding compared to $81 billion last year.

This includes some new money to boost primary care. The province has promised to invest $546 million over three years to support “connecting” about 600,000 people to team-based health-care teams and expanded interprofessional care teams.

An additional $2 billion over three years will be used to boost home and community healthcare.

Vaughan, Ont. is also getting a new medical school through a partnership with York University, with a focus on training family doctors. No official cost has been attached to this project, although officials say that about $9 million has been earmarked for planning.

The province will also spend about $1 billion to fund a new municipal housing infrastructure program, which was announced last week. The money will be used to support core infrastructure projects that support housing, such as roads. This money is in addition to the $625 million earmarked for repair and expansion of water infrastructure.

The budget pushes forward existing spending plans for highways and roads, with no new cost breakdowns for the Progressive Conservative government’s flagship projects like Highway 413 or the Bradford Bypass.

About $37.6 billion will be spent on the education sector and $40 billion will be put into “other programs”

Interest on debt takes up about $13.9 billion of provincial spending.

 

$214.5B
 
Overall planned spending for 2024-2025
 

$1B
 
New Municipal Housing Infrastructure Program
 

$625M
 
To repair and expand water infrastructure
 

$200M
 
Community sport and recreation fund
 

$546M
 
Over 3 years to hire 600K people in primary health care
 

$620M
 
Extending the gas rate tax cut
 

$46M
 
GTA safety, including purchase of police helicopters
 

Keeping costs down

There are no new tax cuts or fee reductions in the 2024 Ontario budget other than the gas and fuel tax rate cut and a confirmation of the Guaranteed Annual Income System (GAINS) expansion, which was announced last year and goes into effect in July.

The government announced Monday that it would be extending its 5.7 cents per litre gas and fuel tax rate cut until Dec. 31, 2024. According to the budget, this will cost taxpayers about $620 million for 2024-25.

Prior to the extension, the price tag for this policy was about $320 million for 2023-24 and $325 million for 2024-25.

The government says its tax rate cut has saved Ontario households an average of $320 since it was first introduced in 2022.

Changes will also be coming to auto insurance, although the province hasn’t attached a dollar figure to it. The Ford government says it will move forward with reforms that will “empower Ontario drivers with more affordable options.”

Auto insurance will still be mandatory for medical, rehabilitation and attendant care benefits, but the government notes all other benefits would become optional.

“This would provide drivers with an opportunity to lower their premiums by taking advantage of a wider range of coverage options to meet their needs,” the budget document says.

Bethlenfalvy said he doesn’t know how much these changes could save drivers or whether they could help reduce premiums. Rather, it is about providing individuals with more convenient options, he said.

“This is something that we are committed to because we want insurance to be affordable for many,” he said.

 

Where does Ontario stand on housing?

The province says it has achieved about 99 per cent of it’s 2023 housing goal, creating 109,011 new homes.

This includes 89,297 housing starts, 9,879 “additional residential units” and 9,835 long-term care beds.

Housing starts, a measure used to track new residential construction, are projected to remain under 100,000 for the next three years. This could impact the province’s goal of building 1.5 million homes in 10 years, although the finance minister did not seem to be concerned.

“I’ve been around long enough to see interest rates cycles up and down, economies up and down, housing starts up and down,” Bethlenfalvy said.

“ I know that this too shall pass.”

Officials noted the cumulative impact of interest rate increases has elevated mortgage costs, which have weighed on the province’s housing market.

The average home price declined in 2023 to about $872,100, the government said.

The government has said it will invest an additional $152 million over the next three years to support individuals facing unstable housing conditions and dealing with mental health and addictions challenges. This money can be used to provide rent supplements and maintain dedicated supportive housing.

The province also said it would be putting forward a new provincial policy framework that “sets out best practices for implementing a Vacant Home Tax on the municipal level while also strengthening Ontario’s Non-Resident Speculation Tax. Few details were provided on what these amendments would entail, with officials only noting it would “support compliance and improve fairness.”

Opposition parties argue this year’s budget spends a lot of money while promising few results.

“ Nothing that the government laid out today helps hardworking people breathe a sigh of relief, or gives them confidence that what’s causing them stress matters to their government,” New Democratic Party Leader Marit Stiles told reporters.

“This was a time for bold leadership, but the message that the conservatives sent today is that what matters most to people right now—accessible health care, affordable housing, the cost of living—don’t matter to them.”

Ontario Liberal Leader Bonnie Crombie noted the budget does little for families struggling to fund a doctor or put their children in daycare.

“This is a do-nothing budget. It’s not worth the paper it’s printed on. The Minister concedes economic growth is down and the debt and deficit are up, but he does nothing to help families and local businesses who are struggling,” Crombie said.

“The sad reality is Doug Ford has no intention of making life better for Ontario families and businesses.”

 

 

 

New sport and recreation fund

The province announced Tuesday it will be investing $200 million over three years for a “application-based local Community Sport and Recreation Infrastructure Fund.”

Officials said the money will be used to support sport, recreation and community facilities for youth and families.

An additional $152 million will also be spent over three years for mental health and addiction supports.

What’s missing?

No new funding is being provided for the Ontario Disability Support Program (ODSP) or the Ontario Works (OW) program, despite documents showing a 15-year “steadily growing caseload.”

The figures were part of a report included in the transition binder for Minister of Children, Community and Social Service Michael Parsa and obtained by CTV News Toronto in a freedom of information request.

Almost 900,000 people are receiving funding through one of the province’s social assistance programs, representing about 6.9 per cent of the province’s population. This number has “steadily” increased over the last 15 years, the documents read, and is expected to grow further due to the uncertain impact of the pandemic.

The province has increased ODSP payments by five per cent, which would add about $58 a month to a recipient’s paycheck.

However, advocacy group ODSP Action Coalition condemned the lack of further supports in the 2024 budget, arguing that keeping benefit rates so far below the poverty line “leads to exponentially higher costs further downstream through increased homelessness, Emergency Room visits and involvement with the judiciary.”

“This budget illustrates just how out of touch this government is with the daily struggles of disabled Ontarians living in deep, deep poverty, particularly those who are unable to work,” Trevor Manson, a co-chair with ODSP Action Coalition, said in a statement.

Ontario education unions say the Ford government’s budget intentionally underfunds the public education system.

The 2024 budget provides a 2.7 per cent projected increase to the education budget compared to last year’s spending, the union said, arguing that amount is lower than inflation and does not account for rising enrollment.

“Politics is all about choices,” said Ontario Secondary School Teachers’ Federation President Karen Littlewood in a statement.

“The Premier and his government continue to choose to put students last, and this budget is no different. They’ve ignored the severe underfunding of elementary and secondary schools as well as in post-secondary education, which has contributed to an acute staffing crisis, rising violence in classrooms, and significant cuts to special education programming across the province.”

Correction – March 26, 2024: This article has been updated from a previous version that said the province had allocated $900 million for the new medical school in Vaughan. In fact, the government is allocating $9 million for the school.