Ontario budget highlights:
- Ontario’s budget includes an unprecedented deficit of $38.5-billion this year, followed by $33.1-billion in 2021-22 and $28.2-billion in 2022-23;
- The government has put off its requirement for a plan to balance its books, says it will present a path to balance in a spring budget;
- To fight COVID-19, the budget includes $7.5-billion in new spending on the health sector over the next 3 years;
- The government will subsidize hydro rates for large and medium-sized business, cutting their power costs by 14 to 16 per cent;
- New seniors home tax credit for 25 per cent on renovations to help them stay in their homes;
- A commitment to develop an Ontario “staycation” 20-per-cent rebate on tourism expenses to encourage local travel in the province;
- No specific funds are dedicated to a new promise to fund an average four hours a day of direct care in long-term care homes over the next four years;
The Ontario government has released a budget that includes record spending and three years of massive deficits as the province wrestles with the health care and economic impacts of COVID-19.
Premier Doug Ford’s Progressive Conservative government will commit $187-billion in spending in 2020-21. Its deficit this year, at $38.5-billion – as previously projected in August – dwarfs any previous Ontario deficit, including those posted after the 2008 and 1990 recessions.
The budget, delivered by Finance Minister Rod Phillips on Thursday, pledges another $7.5-billion to fight COVID-19 – in hospitals, long-term care homes and in public-health units – over the next three years, which comes on top of $7.7-billion in health spending the government had already announced.
While repeating the Premier’s promise that the government will do “whatever it takes” to battle COVID-19, Mr. Phillips also warned that increased spending cannot go on indefinitely.
“As the people understand, the current level of government spending is neither sustainable, nor desirable, in the long run,” Mr. Phillips said. “But as a global pandemic continues around the world it is absolutely necessary today.”
The pandemic has pushed the government to abandon its plan to balance the books in 2023-24. The government intends to put off its legislated requirement to produce a path to eliminating the deficit until its next budget, in the spring, when economic forecasts may be clearer.
Opposition parties at Queen’s Park accused Mr. Ford of failing to do enough to help those hurting the most from the pandemic. They have said he is holding back billions earmarked for the fight against COVID-19, noting his government’s troubles with testing delays, its veto of smaller class sizes in schools, and the province’s at-capacity hospitals, which have complained that needed funding has not materialized.
Much of the government’s planned COVID-19 spending is contained in unallocated contingency funds. Mr. Phillips says this allows it to be deployed more quickly. According to the budget, out of more than $13-billion in contingency funds originally set aside for the pandemic in this way for 2020-21, the province has $2.6-billion left. He also said all $4-billion in federal funds handed to Ontario had been allocated.
The opposition also seized on the fact that the budget contains no spending projections at all for a key pledge unveiled by Mr. Ford earlier this week: a promise to phase in an average of four hours a day of direct care for long-term care residents.
Previous estimates say the promise would cost as much as $1.6-billion a year. More than 2,000 people have died in Ontario’s long-term care homes because of COVID-19. The government has already announced hundreds of millions in funding for long-term care this year, amid a crisis that forced it to bring in the military and the Red Cross to cope.
Mr. Ford said Thursday that his government is “totally committed” to the four-hour plan, but has to consult on the changes, which are to be phased in by 2024-25.
“Our government is sparing absolutely no expense in the fight against COVID-19,” Mr. Ford said of his budget.
NDP Leader Andrea Horwath charged that the budget does nothing to immediately fix the long-term care system, make class sizes smaller or provide direct financial help for businesses. She said the government should have pumped more money into testing and contact tracing, as well as hiring thousands more personal support workers for long-term care homes.
“People in Ontario are on the brink of a health and economic disaster. ... But Doug Ford’s budget doesn’t take any new actions to make everyday Ontarians safer or healthier,” Ms. Horwath said. "In fact, Mr. Ford is waving a white flag in the battle against COVID-19 and telling people, ‘You’re on your own.’ "
Liberal Leader Steven Del Duca called the budget a “betrayal” of seniors, children, women and racialized people, who are more vulnerable to the socio-economic impacts of COVID-19. He said the budget should have capped class sizes at 15 students and provided more resources to help seniors in long-term care homes immediately.
“He has been so slow off the mark that it’s absolutely inexcusable,” Mr. Del Duca said.
Laura Tamblyn-Watts, chief executive officer of CanAge, a national seniors advocacy organization, said she was surprised by the lack of details on the government’s promise to increase direct care in nursing homes.
She said the government has had months to recruit and train people to work in long-term care, as British Columbia has done, or issue a broad call for mass hiring as seen in Quebec.
“This government has dragged its feet,” Ms. Tamblyn-Watts said.
The province’s previously announced commitment to put up $300-million for businesses affected by government-ordered shutdowns is also in the budget. But small businesses criticized the plan, saying only those in the four areas recently subjected to stricter COVID-19 measures – Toronto, Ottawa, York and Peel Region – so far qualify for the aid.
The budget also contains a series of new tax-relief measures aimed at businesses.
Blaming the rising cost of energy on the preceding Liberal government’s green energy plan, Mr. Phillips’s budget pledges to subsidize commercial electricity bills, cutting their costs by 15 per cent to 16 per cent. The move would cost taxpayers $1.3-billion over three years.
Asked why the government had not acted on its 2018 campaign pledge to also reduce residential power rates by 12 per cent, Mr. Phillips said Thursday’s move would make Ontario businesses more competitive with those in other jurisdictions with cheaper power.
The budget would also allow municipalities to reduce property taxes for small businesses, many of which have struggled with skyrocketing rates in areas such as downtown Toronto, where property values shot up in recent years amid a condo boom. It would also reduce the business education tax, which varies unevenly across the province and has long been criticized as unfair.
The government foresees its record pandemic deficits subsiding slowly, sliding to $28.2-billion in 2023-24. However, while Ontario’s net debt will rise to $397-billion in 2020-21, the province will actually see its interest costs go down compared with last year, as rates remain at extraordinary lows.
Stark figures in the budget also show how the pandemic disproportionately affected women. Between February and May, 17.2 per cent of women in Ontario experienced a drop in employment, compared with 13.6 per cent of men. Fewer women have regained their jobs since September.
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Jeff Gray
Laura Stone