Ontario boosts spending on health care and education, revises deficit projection downward

Ontario Finance Minister Rod Phillips says his Progressive Conservative government will spend $1.3-billion more than planned on health-care, education and social services, while still shrinking the province’s deficit faster than projected thanks largely to a strong economy.

In the Ontario government’s fall economic statement, tabled in the legislature on Wednesday, Mr. Phillips said the province’s projected deficit for 2019-20 would be $9-billion.

That’s $1.3-billion lower than the $10.3-billion predicted in April’s budget, a result credited to restrained spending in many areas, increased revenue from corporate and personal income taxes and lower interest costs on the province’s massive debt.

But the 2019-20 deficit is still up from the previous year’s figure of $7.4-billion, a number that was itself much lower than Premier Doug Ford’s repeated assertions that the previous Liberal government left him a $15-billion fiscal hole.

The new $1.3-billion spending came after months of controversy over government cuts – to, among other things, public health, ambulance services and child care – that multiple polls suggested harmed Mr. Ford’s popularity.

The spending total includes the government’s moves in recent months to soften or reverse some of those cuts, as well as some new money. It also also includes hundreds of millions more for autism treatment, promised after botched changes to that program sparked protests.

Mr. Phillips told reporters the government had listened to the concerns raised about its first budget in April: “You can expect that this is a government that is going to listen and continue to listen and make sure that we make adjustments as we go along.”

An added $404-million for health care comes as the government struggles to keep its promise of ending hospital overcrowding and “hallway health care.” Education will see $186-million in new cash, as the government faces teachers unions in tense labour talks, where it has offered to water down its plan to increase class sizes.

The statement also includes a grab bag of other measures. It would make a small cut to small business taxes, saving some up to $1,500 a year – something the Ontario Chamber of Commerce welcomed but said does not go far enough.

It includes new “enabling” legislation the government says will prepare for the eventual liberalization of the province’s alcohol regime, while talks continue with the beer industry over allowing competition to its Beer Store quasi-monopoly.

And it says Ontario is proposing to allow licensed cannabis producers to open retail stores on their production sites, as well as sell online or over the phone for pickup. It also calls for selling the naming rights to the Metro Toronto Convention Centre and GO Train stations.

Mr. Phillips says the government remains on track to balance the books in 2023 as promised – after the next provincial election – despite warning signs of a slowing U.S. economy and U.S. trade tensions with China.

Last year, the Ford government struck a different tone in its first fall economic update, announcing the cutting of standalone watchdog offices for children, the environment and francophone rights, and cancelling funding for a new francophone university.

NDP Leader Andrea Horwath disputed the government’s new deficit figure, and argued the government was still cutting important services.

“I don’t think there’s a new era of the Ford government," Ms. Horwath told reporters. "... All the government did today is say that the deep, deep cuts that they announced in the spring, are going to be delayed a little bit.”

Our Morning Update and Evening Update newsletters are written by Globe editors, giving you a concise summary of the day’s most important headlines. Sign up today.