Ontario’s Progressive Conservative government released the 2022 budget on Thursday, detailing its spending plans if re-elected to another term in June. Much of the budget rehashes commitments the government made in recent months, including a planned 50-cent increase to the minimum wage in October.
Titled Ontario’s Plan to Build, the budget introduced by Finance Minister Peter Bethlenfalvy focuses on driving economic recovery from the COVID-19 pandemic by investing in the construction of highways, transit infrastructure and hospitals. Here are the highlights.
The government’s deficit is projected to spike to $19.9-billion in 2022-23, up $6.4-billion from the most recent fiscal year, but a $1-billion reserve fund could bring those numbers down. The increase is the result of growth in spending of more than 5 per cent over the next three years.
But with revenue expected to rise by 4 per cent a year, the deficit would decline gradually starting in 2023, with the books balanced by 2027-28, two years earlier than forecast in the previous budget.
The proposed timeline to balance the budget is longer than the 2023-24 forecast made by the Financial Accountability Office earlier this month.
The net debt-to-GDP ratio is expected to increase slightly, by less than 1 per cent to 41.4 per cent this fiscal year.
The government is proposing to introduce and expand tax credits, but the budget doesn’t act on Premier Doug Ford’s 2018 election campaign promise to cut income taxes by 20 per cent. Instead, the Low-income Individuals and Families Tax (LIFT) credit is being expanded to support residents making an annual income up to $50,000. Eligibility was previously capped at $38,500.
This is expected to cost $320-million a year and support an additional 700,000 people, with an average tax savings of $430.
Also being proposed is a new tax credit to help seniors 70 and older pay for medical expenses. Under the new Ontario Seniors Care at Home Tax Credit, eligible recipients would receive up to 25 per cent of their medical expenses for a maximum credit of $1,500.
Building roads and transportation infrastructure are a key priority in the government’s capital plan, with the word “highway” mentioned 151 times, and “congestion” and “gridlock” appearing 25 times between them.
In case people miss the point, the cover of the 268-page document shows a 16-lane highway with traffic flowing freely. The government reiterated in the budget its plans to build or expand highways – at a cost of $25.1-billion over 10 years. This includes an added investment of $4-billion from what was earmarked last year.
Cost details weren’t provided for individual projects such as Highway 413 and the Bradford Bypass, two contentious planned routes that the government is expected to make cornerstones of its campaign for re-election.
Other commuter-focused projects given the green light include starting work on widening Highway 401 between Oshawa and Port Hope and the QEW Garden City Skyway rehabilitation project, including a new bridge over the Welland Canal connecting St. Catharines to Niagara-on-the-Lake.
The government plans to boost spending on health care infrastructure by $10-billion over the next 10 years, adding to the $30-billion previously budgeted. These spending measures are intended to address problems the pandemic has exposed by increasing hospital capacity with 3,000 additional beds across the province.
In an effort to retain nurses, the province would also spend $764-million over two years to provide nurses with a $5,000 retention bonus.
For residents needing health care at home, the province is also providing $1-billion to expand the home-care system.
This year’s budget doubled down on some previously announced policy initiatives aimed at easing the labour shortage and boosting the pay of low-income workers, but did little to significantly and immediately address the impact of high inflation on them.
On the labour front, the budget focused on pumping money – more than $1-billion annually – into a range of provincially run agencies and programs geared toward retraining workers, getting more people interested in the skilled trades and addressing the skills gap.
For instance, the government will invest an additional $114.4-million over three years in its Skills Trades Strategy program, which, among other things, provides financial support for those who enroll in apprenticeship programs at local colleges.
The budget also promises more funding – $268.5-million over three years – to revamp Employment Ontario, an agency that matches workers with employers, and guides workers to specific retraining programs.
The government also said it would allocate $5-million to the Better Jobs Ontario training program. It targets people who are on social assistance, self-employed, newcomers and gig workers, and gives them $28,000 in financial aid for tuition and other associated costs to enroll in college, university or vocational training programs.
The budget highlights a new-found emphasis by Mr. Ford’s government on building or attracting industry related to clean-energy transition. That includes a critical minerals strategy, released in March, with a focus on electric-vehicle components and a commitment of $29-million in exploration and innovation funding, atop larger sums promised for related infrastructure.
Similarly, it notes the launch earlier this month of a strategy to make low-carbon hydrogen, including an electricity rate cut for a major production facility in Niagara Falls.
It also includes many hundreds of millions of dollars in subsidies, alongside the federal government, to land electric-vehicle manufacturing commitments from major automakers.
The budget also mentions the idea of creating Ontario’s first provincial park in 40 years, but doesn’t include any details on cost or potential locations.
The Ontario government says it will launch a pilot project with school boards to expedite construction of schools. As previously announced, the government’s budget included $14-billion in capital grants for schools over the next 10 years, which includes $1.4-billion in 2022-23 to address the repairs backlog. Experts have said that is not nearly enough. The Toronto District School Board’s repairs backlog alone, for example, is around $3.7-billion.
With reports from Oliver Moore, Carly Weeks, Adam Radwanski, Vanmala Subramaniam and Caroline Alphonso
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