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Ontario Finance Minister Peter Bethlenfalvy arrives in the Ontario Legislature in Toronto with Premier Doug Ford to deliver the Provincial Budget on Wednesday March 24, 2021.

Frank Gunn/The Canadian Press

Ontario will spend billions more fighting the health and economic effects of the COVID-19 pandemic and is projecting deficits into the last half of this decade, pushing up debt levels to unprecedented heights.

The province’s second pandemic budget forecasts a $33.1-billion deficit in 2021-22, falling from the record $38.5-billion worth of red ink caused largely by expenditures to combat COVID-19 in 2020-2021.

But with an economic rebound expected as vaccinations roll out, Ontario will throttle back its extraordinary spending on the pandemic over the next two years. The province says its deficits will shrink to $27.7-billion in 2022-23 and $20.2-billion the following year.

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Ontario Budget 2021: Six things you need to know

Finance Minister Peter Bethlenfalvy unveiled a budgetary blueprint on Wednesday that also outlines his government’s approach to fixing its finances as the pandemic recedes – an approach he insists will not include new taxes or funding cuts.

“Our recovery will be built on a strong foundation for growth, not cuts or tax hikes,” Mr. Bethlenfalvy said. “Hope is on the horizon. It’s months, not years, away.”

However, the budget’s projections also show spending increases on education and other programs, outside health care, either flattening or slowing to rates below inflation – prompting the opposition NDP and teachers unions to warn that cuts are coming.

Ontario's deficit

Medium-term outlook, in billions of dollars

$10

PROJECTION

0

$-8.7

-10

-20.2

-20

-27.7

-30

-33.1

-38.5

-40

2019-

2020

2020-

2021

2021-

2022

2022-

2023

2023-

2024

THE GLOBE AND MAIL, SOURCE:

ONTARIO MINISTRY OF FINANCE

Ontario's deficit

Medium-term outlook, in billions of dollars

$10

PROJECTION

0

$-8.7

-10

-20.2

-20

-27.7

-30

-33.1

-38.5

-40

2019-

2020

2020-

2021

2021-

2022

2022-

2023

2023-

2024

THE GLOBE AND MAIL, SOURCE: ONTARIO MINISTRY OF FINANCE

Ontario's deficit

Medium-term outlook, in billions of dollars

$10

PROJECTION

0

$-8.7

-10

-20.2

-20

-27.7

-30

-33.1

-38.5

-40

2019-

2020

2020-

2021

2021-

2022

2022-

2023

2023-

2024

THE GLOBE AND MAIL, SOURCE: ONTARIO MINISTRY OF FINANCE

Total spending in the coming year is still projected to be much higher than prepandemic levels, at more than $186-billion. So is the province’s net debt, which will hit $439.84-billion this year – equal to 47.1 per cent of the province’s gross domestic product – and shoot past $500-billion in 2023-24. Ontario has long had the largest subnational debt in the world.

The budget document does not predict a balanced budget – a prepandemic promise by the Progressive Conservative government – until 2027 at the earliest. And it leaves little doubt that COVID-19, and its effects on the health system and the economy, are going to overshadow the province for a long time.

NDP Leader Andrea Horwath said the government “missed the memo” that the pandemic is not yet over, saying that the budget document doesn’t mention a third wave of the virus.

“Just when people needed help the most, the budget fails to make the investments that people needed,” she said.

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Ontario's spending by sector

Medium-term outlook, in billions of dollars

Health

Children's and Social Services

Education

Postsecondary education

$80

PROJECTION

60

40

20

0

2019-

2020

2020-

2021

2021-

2022

2022-

2023

2023-

2024

THE GLOBE AND MAIL, SOURCE:

ONTARIO MINISTRY OF FINANCE

Ontario's spending by sector

Medium-term outlook, in billions of dollars

Health

Children's and Social Services

Education

Postsecondary education

$80

PROJECTION

60

40

20

0

2019-

2020

2020-

2021

2021-

2022

2022-

2023

2023-

2024

THE GLOBE AND MAIL, SOURCE: ONTARIO MINISTRY OF FINANCE

Ontario's spending by sector

Medium-term outlook, in billions of dollars

Health

Children's and Social Services

Education

Postsecondary education

$80

PROJECTION

60

40

20

0

2019-

2020

2020-

2021

2021-

2022

2022-

2023

2023-

2024

THE GLOBE AND MAIL, SOURCE: ONTARIO MINISTRY OF FINANCE

She accused the government of cutting spending by $4.8-billion next year, although that takes into account what the government says is its one-time COVID-19 spending. Ms. Horwath said an NDP budget would have increased long-term care funding sooner, hired more teachers and education workers and included paid sick days, as well as time off for people to get vaccinated.

The government is committing $1-billion over two years for its vaccine rollout, including $135-million already spent on the rollout’s bumpy beginnings.

The budget pledges to spend $2.3-billion this year alone on contact tracing and to expand testing that, it says, will include more rapid testing in schools, congregate settings, workplaces and high-priority communities.

It also confirms the province’s previously announced plans to spend another $1.2-billion for new and expanded hospitals. The Ontario Hospital Association said the funding was historic and “vital to stabilizing the hospital sector for the duration of the pandemic and preparing for COVID-19 recovery.”

The budget reiterates plans for hundreds of millions of dollars to build new long-term care beds and install air conditioning and other improvements in existing long-term care homes, where more than 3,700 people have died in the pandemic. And for the first time, it has put a dollar figure on its pledge to offer an average of four hours of direct care to residents in long-term care: $4.9-billion over four years for the hiring of 27,000 nurses and personal support workers.

The Ontario Long Term Care Association, which represents more than 70 per cent of nursing homes in the province, said the budget contains “the most significant investments in decades in Ontario’s long-term care sector.”

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While the government has extended a temporary pay bump until the end of June for 147,000 people working on the front lines in long-term care, the budget made no promise to make it permanent, saying only that it will be reviewed. Meanwhile, the government said it will give thousands in grants to attract more personal support workers and nurses to work in retirement homes.

Total program spending

In billions of dollars

Program expense excluding

COVID-19 time-limited funding

COVID-19 time-limited funding

$200

6.7

2.8

20.1

169.7

171.1

166.3

150

157.7

$152.3

100

50

0

2019-

2020

2020-

2021

2021-

2022

2022-

2023

2023-

2024

Note: Figures do not include the government’s

interest payment on debt.

THE GLOBE AND MAIL, SOURCE: ONTARIO TREASURY

BOARD SECRETARIAT; ONTARIO MINISTRY

OF FINANCE

Total program spending

In billions of dollars

Program expense excluding

COVID-19 time-limited funding

COVID-19 time-limited funding

$200

6.7

2.8

20.1

169.7

171.1

166.3

150

157.7

$152.3

100

50

0

2019-

2020

2020-

2021

2021-

2022

2022-

2023

2023-

2024

Note: Figures do not include the government’s

interest payment on debt.

THE GLOBE AND MAIL, SOURCE: ONTARIO TREASURY BOARD

SECRETARIAT; ONTARIO MINISTRY OF FINANCE

Turning off the taps, gradually

How much Ontario is spending on COVID-19 – and everything else, in billions of dollars

Program expense excluding

COVID-19 time-limited funding

COVID-19 time-limited funding

$200

6.7

2.8

20.1

169.7

171.1

166.3

150

157.7

$152.3

100

50

0

2019-20

2020-21

2021-22

2022-23

2023-24

Note: Figures do not include the government’s interest payment on debt.

THE GLOBE AND MAIL, SOURCE: ONTARIO TREASURY BOARD SECRETARIAT;

ONTARIO MINISTRY OF FINANCE

Sue VanderBent, CEO of Home Care Ontario, an industry association, said the government chose to “neglect” home care in the budget. Higher wages in long-term care, she said, are causing an exodus from the home-care sector: “As a result of our diminished capacity to support patients to heal at home, hospitals will face increased hallway health care, overcrowding and difficulty discharging patients.”

Facing criticism from small businesses hit by COVID-19 restrictions, the government is extending an existing grant program, offering $10,000 to $20,000 to about 120,000 affected businesses, for a total added cost of $1.7-billion. The government also pledged an additional $400-million for the hard-hit tourism industry.

Parents will be eligible for a third round of the government’s direct child payments, with the cheques now doubled to $400 for children up to those in Grade 12, with $500 for children under 21 who have special needs. Parents who have previously applied for the payments will automatically receive one, no matter their income levels. The measure will cost an estimated $1.8-billion.

The government also proposes a 20-per-cent top-up of its tax credit for child-care expenses to help families earning under $150,000. The program, at a cost of $75-million, would increase support from $1,250 to $1,500 on average per family, the government said.

Commenting on the budget, Liberal Leader Steven Del Duca took the government to task for not investing more in public education and sick pay for front-line workers.

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“Today’s budget shows that Doug Ford has decided the pandemic is already behind him, abandoning every Ontario family still in crisis,” Mr. Del Duca said.

Acknowledging that the pandemic has disproportionately harmed women and produced a “she-cession,” Mr. Bethlanfalvy said his government would create a task force to address women’s economic barriers. In an unusual move, he also thanked Ms. Horwath in his budget speech in the legislature, “for holding our government to account.” Last month, the Premier was accused of sexism for likening Ms. Horwath’s queries in Question Period to “nails on a chalkboard.”

The budget leaves out any mention of the contentious proposed Highway 413, which the PC government has previously said it would fast-track. The project has since run into opposition from environmentalists, opposition parties and municipalities. The proposed highway would curl north of Toronto from the west, carving through protected Greenbelt lands.

Ontario plans to spend billions to fight the COVID-19 pandemic, help small businesses and support families. The province has unveiled a $186.1-billion budget that also shows a $33.1 billion deficit, which the government says will take until 2029 to eliminate. The Canadian Press

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