Here’s what we already know about Thursday’s Ontario budget:
It will include lots for New Democrats
It may not be straight cutting and pasting, but most items on the third-party NDP’s wish list have found their way into the budget. These include an attempt to cut auto insurance premiums at which the Liberals initially scoffed, a youth employment fund and new spending on home care and social assistance.
The deficit has gone down faster than projected
Finance Minister Charles Sousa has already announced that the shortfall for 2012-13 came in at $9.8-billion rather than the projected $14.8-billion. The budget will forecast it going back up somewhat in 2013-14 – partly because it was driven down by one-off savings and also perhaps because the government has a tendency to set beatable targets.
Overall spending increases will stay capped at 1 per cent annually
In an interview this week, Premier Kathleen Wynne described maintaining this minimal level of program-spending growth as “really important to us.” With the two biggest expenditures, health and education, continuing to grow, that will mean less money for most other ministries, especially given the need to cover new NDP-friendly items.
Income-testing will be expanded
Last year’s budget began limiting access to the Ontario Drug Benefit. This year’s will signal plans to do likewise with the Clean Energy Benefit, a 10-per-cent hydro rebate currently available to all ratepayers. The government may take other steps as well to signal that help is going only to those who need it.
It will start choosing new transit revenue streams
A commitment to introduce tolls to high-occupancy-vehicle lanes will take a while to implement and represent only a small share of the $2-billion the government wants to raise annually to upgrade the Greater Toronto Area’s transportation infrastructure. Still, it comes before many had expected specific new streams to be chosen.
WHAT WE’RE STILL WAITING TO FIND OUT
What does the path to balanced budgets really look like?
Despite making better-than-expected progress reducing the deficit, the Liberals concede the tough part of getting out of the red by 2017-18 will be in the years to come, with more structural reforms needed. They have yet to shed much light on what those reforms will be, and the business community in particular will be looking for indications.
How much will corporate taxes change?
The Liberals might struggle to meet the NDP’s demand to put off introducting input tax credits for large companies, because that requires federal co-operation. But there have also been hints about narrowing eligibility for existing business tax credits and perhaps converting some to grants to make them less open-ended.
How much more for social assistance?
The budget is expected to meet the NDP’s demand to claw back less from people on welfare who find work. But that was far from the only recommendation in a government-commissioned report on social assistance about which Ms. Wynne has spoken enthusiastically. Will she also, for instance, raise benefits?
Will there be a Drummond update?
Bristling at perceptions that they let last year’s report on public spending gather dust, Liberals have mused about including a checklist showing progress on economist Don Drummond’s recommendations. Whether one is produced may depend on how many of those items the government can credibly say it has addressed after this year’s plan.
How will the opposition react?
This is only a partial mystery, since the Progressive Conservatives have already vowed to vote against the budget. All eyes will be on the New Democrats, who will have to decide whether to keep the minority government alive. NDP Leader Andrea Horwath probably will not give a quick verdict, but expect tea-leaf reading to begin immediately.