Doug Ford’s Pre-Election Budget Bets on Big Infrastructure Spending, While Running Deficits | CBC News

Central themes of the $198.6 billion fiscal plan include improving and expanding critical infrastructure, rebuilding the economy in the wake of COVID-19, helping families with rising cost of living, and ensuring the province is prepared for any wave of pandemic.

You can read the full budget document at the end of this story.

The budget was presented in Queen’s Park by Finance Minister Peter Bethlenfalvy, who called it “Prime Minister Ford’s vision for Ontario”.

“We have to rebuild this economy. We have to grow those jobs,” he told reporters.

Asked if the PCs would present an identical budget if they were re-elected on June 2, Bethlenfalvy did not explicitly commit to doing so, but said it is the party’s campaign platform and it is up to voters whether they accept it.

“We’re going to go through the elections, we’re going to listen to the people of Ontario,” he said.

As Bethlenfalvy delivered his budget speech to the Legislature, Ford’s communications director sought to set the record straight on social media.

“This is the budget [Ford] it will be reintroduced if he is re-elected. Full stop,” Ivana Yelich tweeted.

The deficit is expected to increase this year

The budget includes significantly revised deficit projections, with the government forecasting a possible path back to balance by 2027/2028, two years earlier than estimated in the 2021 budget.

The Treasury Ministry said the province ran a $13.5 billion deficit in the fiscal year just ended, more than $19 billion short of the outlook for 2021. While the pandemic has injected considerable uncertainty into the province’s fiscal outlook , the Ford government has consistently overestimated annual deficits during its tenure at Queen’s Park.

The government projects that the deficit will rise to $19.9 billion by 2022/2023 before falling to $12.3 billion in 2023/2024 and $7.6 billion by 2025. Those forecasts are based on a “medium growth scenario”. “, with actual results depending on the economic condition of Ontario in coming years.

PCs say they would plan to spend about 9 percent more this year than they did during the height of the COVID-19 pandemic, and would also run a larger deficit. Spending in key sectors is set to rise, on average, about 5 percent a year over the next three years.

Ontario’s financial watchdog said earlier this month that the province could potentially have reached fiscal balance by 2023/2024, with a surplus by 2025, but the PC government chose to increase spending in some key areas.

While the PCs were elected on the promise of reining in government spending, Bethlenfalvy said COVID-19 “exposed some of the underinvestment” from previous governments.

“I think we’ve found the right balance of investing in Ontario, building things, getting good jobs, supporting workers and rebuilding this economy in the context of a fiscally responsible plan,” he said.

$158.8 billion capital spending plan

The centerpiece of that promised spending is $158.8 billion for core infrastructure projects to be spent over the next decade, with a goal of spending $20 billion of that total this year and next.

The breakdown includes:

• $25.1 billion for highways, including the controversial Highway 413, the Bradford Bypass, a new twin bridge over the Welland Canal, and early work to widen Highway 401 beginning in Pickering and moving east through eastern Ontario. The budget did not include any specific costs for individual projects.
• $61.1 billion for public transportation projectsincluding major subway construction in Toronto and expanded service on the GO Transit network.
• $40 billion for hospitals and health care facilities, including $27 billion in capital grants. Ford and his ministers have made a slew of hospital-related funding announcements in recent weeks, including multiple projects in Toronto, Ottawa, Windsor, Brampton and Muskoka.
• $21 billion for the schools, with $14 billion earmarked for capital grants. Education Minister Stephen Lecce said this month that $500 million would be spent on 37 school projects in 2022/2023. Ontario’s school repair backlog was estimated in September at approximately $16.8 billion.

The government called the proposed spending “one of the most ambitious capital plans in the history of the province.”

For comparison, in their 2018 pre-election budget, the Ontario Liberals promised a 10-year capital plan of $182 billion, including $79 billion for mass transit and $16 billion for schools.

Targeted tax cuts for seniors, low-income workers

With affordability and the rising cost of living expected to define the campaign themes, the PC budget includes several measures aimed specifically at voters’ pocketbooks.

While most of the proposed relief has already been announced, including the elimination of license renewal fees and the reduction of the provincial gas tax by 5.3 cents per liter for six months beginning July 1, there are two notable tax breaks proposed.

The first is a promised enhancement to the Low Income Individuals and Families Tax Credit (LIFT) so that more workers are eligible to receive at least a partial refund on their income tax.

The current tax credit is only available to individuals earning up to $38,500 or families earning up to $68,500 annually, up to a maximum of $850 per person.

The enhanced credit would expand eligibility to individuals earning up to $50,000 or families with a combined income of $82,500 and offer a refund of up to $875. The rate at which the refund is phased out after a certain income threshold would also be lowered, from 10 percent to 5 percent.

The proposed changes would mean an additional 700,000 workers could benefit from the non-refundable tax credit, the government said, bringing the total to about 1.7 million Ontarians.

Finance Ministry officials said the current program costs around $400 million per year, with the upgrade adding an additional $320 million to that.

A second commitment in the budget is the Ontario Seniors Care at Home tax credit, which the government says would help with medical costs for some residents age 70 and older for things like walkers, hearing aids, in-home oxygen and attendant care.

The refundable credit would cover up to 25 percent of eligible seniors’ medical expenses, up to a maximum of $1,500 a year. Seniors with incomes of $35,000 or less could claim the full credit, with the amount gradually reduced for those with incomes above that threshold.

The PCs said they would provide an estimated $110 million in support to about 200,000 low- and moderate-income seniors at an average of about $550 per family each year.

In her response to the budget, NDP Leader Andrea Horwath said the PCs’ proposed affordability measures fall far short of what Ontarians need.

“After everything we’ve been through, people need and deserve hope and support,” he said.

“What he has made clear today is that this government is completely out of touch with the people of Ontario. What he has made clear today is that we need change and we need it now,” Horwath said.

One measure notably absent from this pre-election budget: a 2018 promise from Ford of a 20 percent middle-class income tax cut. At that time, the PCs said that he would be ready for the third year of his term.

Liberal Leader Steven Del Duca said Ontarians will find the budget disappointing.

“This document completely lacks the kind of ambition that I know the people of Ontario have for our province and want to see the future of our province,” he said.

Short on climate change commitments

Meanwhile, the pre-election budget also touts government investments to overhaul Ontario’s manufacturing capacity, including its Critical Minerals Strategy released in March and efforts to increase electric vehicle production in the province.

In his speech, Bethlenfalvy said the province’s plan to produce electric vehicles is in part about achieving climate goals “without imposing a carbon tax.”

The budget document itself only mentions the term “climate change” once.

Earlier this month, the province quietly revised its strategy to meet Ontario’s 2030 carbon emission reduction targets. The new path does not include any reduction from increased adoption of electric vehicles, which accounted for nearly 15 percent of the projected cuts to emissions in the government’s 2018 “Made in Ontario Plan for the Environment.”

In a statement, Green Party leader Mike Schreiner called the PC platform an “expansive 1950s-era budget that is setting us back and setting up Ontario as an expensive, unhealthy province that will pave the future of our sons”.

“We are in a climate emergency and a cost of living crisis. But Doug Ford wants to pump a staggering $25 billion into more roads and expansion that will pollute the air, make living even more expensive, pave farmland that feed us and destroy the nature that protects us from floods,” he continued.

The government also promises the creation of a new provincial park, although the budget document does not provide details on where it will be located or how much it will cost.

Thursday’s budget was initially supposed to be released by March 31, but the government controversially changed its own law to delay its release. Officials said it was because they needed time to fully understand the fiscal consequences of pandemic-related spending.