Less than a week before the provincial election is called, the Ontario government has tabled an election-themed budget. Since it won’t have time to pass at Queen’s Park before the government dissolves next week, the budget will likely serve as an election platform for the Progressive Conservative Party.
Ontario Finance Minister Peter Bethlenfalvy of Montreal expects the province to achieve a balanced budget in 2027-2028. In April, Ontario’s Financial Accountability Office (FAO) predicted this would be achieved in 2023-24. The government forecasts a deficit of $19.9 billion in 2022-2023, and $12.3 billion in 2023-2024.
The province projects tax revenues of $126 billion in 2022-23. These will increase to $157 billion in 2027-2028, when the province reaches a balanced budget. Revenue growth “does not assume future tax increases,” the document reads.
A plan for infrastructure
In a series of election-related press conferences over the past few months, Premier Doug Ford announced several measures that are reflected in the budget. This is the case, among others, of major investments in the hospital system in Brampton, Ottawa and Toronto, where the Ford government will invest more than $1 billion in the Unity Health network. Some of these investments were also included in the economic statement.
The budget calls for total infrastructure spending of more than $158 million, up $10 billion from the fall economic statement. Just over 10% of these investments will be made in 2022-2023. Ontario will invest $25 billion in building and repairing provincial highways, 10 per cent more than was forecast in the fall economic statement.
These investments will notably be used to widen Highway 401 east of Toronto and to build a new twin bridge over the Welland Canal. The government is also planning to build Highway 413, a road axis that will bypass the northwestern crown of the Toronto suburbs, in particular to combat traffic jams. But the budget does not quantify the investments needed for the road project.
All opposition parties in Queen’s Park oppose the construction of the highway. This, they say, will not solve congestion problems in the Greater Toronto Area and poses an environmental risk since the route crosses part of the Greenbelt, an area on the outskirts of Toronto that protects agricultural land, communities, forests.
Taxpayer bonuses
Doug Ford will reduce taxes for taxpayers, we learn in the budget, in the form of an increase in the ceiling required to obtain the tax credit for low-income workers. This is a non-refundable credit to reduce or eliminate taxpayers’ income tax. Since 2019, only taxpayers making less than $38,500 per year could benefit from it. The cap now increases to $50,000, while the relief increases by $25 to $875.
The government will also introduce an Ontario Home Care Tax Credit for seniors age 70. The tax credit may cover up to 25% of home medical expenses, up to $6,000, ie a maximum credit of $1,500. Those eligible include care provided by a nurse, dental care and renovations to improve the senior’s journeys to their home.
In recent weeks, the government has also announced that it plans to cut the gas tax for six years starting July 1, one month after polling day. The tax will increase from 14.7 cents per liter to 9.0 cents per litre. Due to fewer road users during the pandemic, gas tax revenues reached $1.8 billion in 2019, down about 30% from the fiscal year previous.
The budget also confirms the elimination of fees associated with the renewal of license plates, through the annual purchase of a sticker at a cost of $120. In an interview with the CTV News network, Peter Weltman, the director of the BRF, said that the elimination of the fees associated with the vignette represents cuts of $6.7 billion over five years in the province’s revenues.
This story is supported by the Local Journalism Initiative, funded by the Government of Canada.