Ontario’s deficit will rise this year to $19.9 billion, with the Ford government enacting new measures for seniors, low-income workers and motorists in a budget that is hopeful the province can get back in balance in the timing of the next provincial elections in 2026. .
The deficit for the fiscal year that ended last month shrank from an estimated $33.1 billion in 2021 and $21.5 billion in the Fall 2021 Economic Statement to $13.5 billion.
The 2022 budget says the deficit will fall to $10.8 billion in 2023-24, $6.1 billion in 2024-25, $5 billion in 2025-26, and just $700 million in 2026-2027 once a $1.5 reserve is removed. billion.
The independent Office of Financial Responsibility He suggested earlier this month, PCs could balance the budget for 2023-24 with no new spending confirmed on Thursday.
Thursday’s $198.6 billion budget is the largest in Ontario history, surpassing Kathleen Wynne’s final budget in 2018. That budget would equate to $177 billion adjusted for inflation, according to the Bank of Canada.
Prime Minister Doug Ford’s election-year budget includes a promise of tax relief for low-income workers, a gas tax cut and reveals how much his much-touted end to license plate sticker fees will cost.
The Ford government is betting big on infrastructure, with $10 billion in additional money to build and refurbish hospitals over the next 10 years.
The funds will build new hospitals in Brampton and Mississauga, and rebuild other hospitals in Etobicoke and Scarborough, along with a host of other projects across the province.
ROAD CONSTRUCTION
There’s also nearly $4 billion more for highway construction in the province over the next decade, though provincial bureaucrats didn’t say how much of that will go toward the new 413 freeway or the Bradford Bypass, projects expected to cost billions. by themselves and which have not yet been put out to tender.
Finance Minister Peter Bethlenfalvy defended the size of the nearly $200 billion spending plan, which sees the province remain in deficit until the next election or later, saying it addresses affordability issues caused by high levels of inflation that occur once in a generation.
“What you’ve seen is that we cut costs on many fronts: A lower income tax for those making $50,000 or less is part of our plan, we’ve given license plate stickers, and the previous Liberal government he just raised the fees every year, with the license plate stickers, that’s like an immediate tax cut.”
Addressing budget hawks, he said the new plan still eliminates the deficit two years earlier than projected in his latest budget.
“Our debt to GDP (ratio) is down eight percent and our commitment to balance the budget is going to happen two years faster than we said last year,” he said.
But when asked four separate times whether he would actually approve Thursday’s budget if the PCs win the June 2 election, Bethlenfalvy was less clear.
“What I will commit to the people of Ontario is that this is our plan. This is the budget that we are presenting and we will have the people of Ontario vote on that budget. And I have every confidence that the people of Ontario will pass this budget.”
NDP leader Andrea Horwath said she felt there was no guarantee the PCs would pass the budget in its current form if they won the election.
“I am absolutely concerned about a bait and switch. There must be a hidden budget somewhere, because the finance minister refused to commit to the document that he presented to them today, he felt very uncomfortable”.
He called and said the budget was full of “gimmicks” and “waste,” and failed to acknowledge the seriousness of housing unaffordability and rising inflation.
Asked again by CP24 if the PCs would commit to reintroducing the exact same budget bill for passage after the June 2 election, Bethlenfalvy said they would.
“Yes, this is the plan we are going to execute on. This is the plan for us to get the trust of the people of Ontario,” he told CP24 live on air. “They get to pass this bill. This will be the budget we will reintroduce if we are re-elected.”
MONEY FOR ELDERLY CARE
Brand new is a tax credit targeted at frail seniors who are still living at home and receiving home care from a nurse or aide.
The new home care tax credit will offer taxpayers age 70 and older a credit of 25 percent of medical costs up to $6,000, for a maximum credit of $1,500. Seniors earning $65,000 a year or more are not eligible.
It is expected to cost $110 million in 2022 and help up to 200,000 seniors.
Ford’s biggest promise, by cost, is the government’s ongoing effort to end vehicle license sticker renewal fees and send rebates of $60-120 per year per vehicle to all Ontario car owners.
But the budget document says the refund will cost taxpayers $1.8 billion, $800 million more than government sources suggested when the pledge was first made public.
LOW INCOME TAX CREDIT
The budget also details plans to expand eligibility for the Ford government’s Low Income Individuals and Households Tax Credit (LIFT).
The new LIFT credit will include taxpayers earning up to $50,000 individually or up to $82,500 for a household, and will provide up to $875 in tax relief.
The expanded threshold means an additional 700,000 Ontario taxpayers will qualify for the credit.
It will cost taxpayers $400 million each year.
The NDP’s financial critic, Catherine Fife, said the credit amounts to only a few “dollars” per taxpayer each year.
“There has not been a great acceptance. It’s not easy to navigate and this is small, what we’re really talking about is dollars in people’s pockets, a dollar or two. There is no substantive acknowledgment that people are suffering.”
Also coming in July is an 11-cent-per-liter cut in provincial gasoline taxes, which expires at the end of 2022.
The 2022 budget projects that this tax cut will cost the province $645 million in lost revenue this year.
Also in the document is an additional $3.5 million for emergency preparedness measures and $96 million over three years to equip and train Ontario police services to respond to future protests and blockades at land border crossings.
In general, the deficit is shrinking not because of cost reductions, but because of increased revenues.
Bureaucrats said the 2022 budget contains almost $20 billion more in revenue compared to last year, due in large part to the full reopening of all sectors of the economy after shutdowns during the COVID-19 pandemic.
Many sectors outside of health care are running below projected spending targets.
Education is $1.3 billion under budget in 2021-22, largely due to lower-than-expected enrollment. Social services and children were $632 million under budget due to lower need for Ontario’s child benefit and fewer than expected welfare claims.
Liberal leader Steven Del Duca characterized this lower amount for education as a cut.
“As a parent who has two young daughters who attend publicly funded schools, I am absolutely appalled that today Ford Conservatives confirmed they cut $1.3 billion from our public education system and chose in the second year of COVID not to spend An additional $2 billion that they had already budgeted to help deal with COVID in our schools,” he told CP24. “It’s deeply, very disappointing, but not shocking because everyone knows that Doug Ford and his team don’t care about publicly funded education.”
“Let’s talk about who Doug Ford has served over the last four years. Everyone knows this about Doug Ford. They are the rich political donors to him, they are the richest of the richest and the biggest corporations.”
The impact of rising interest rates has begun, with borrowing costs up $21 million from last year, a rounding error on a nearly $200 billion budget, but significant nonetheless. .
Interest rate increases cost the province $7 million per basis point, per year, which means that a 0.50 percent increase costs the province $350 million in additional interest costs.
Under a faster-than-projected growth scenario, the province could be in the black by 2024-25, with a $2.4 billion surplus.
Net debt will rise to $395 billion this year, up from $324 billion five years ago.
Ontario still has a $1.1 billion budget for COVID-19 testing in 2022-23.
This equates to approximately 64,000 PCR tests per day using existing cost figures of approximately $47 per test, a testing rate the province has not reached in more than three months and would struggle to achieve under current eligibility rules. .
Real estate continues to contribute heavily to government coffers, with land transfer tax revenue rising $212 million to nearly $5.7 billion in 2022.
In addition, the tightening of the non-resident speculation tax, which now covers all of Ontario and includes groups such as students and foreign workers who previously had an exemption, will net the government $175 million this year and $235 million for 2024-2025.
Reference-www.cp24.com