Budget: Ontario plans to eliminate its deficit as early as next year
Ontario Finance Minister Peter Bethlenfalvy predicts the province will emerge from the red as early as next year.
No tax cuts for individuals or checks for parents to help them cope with inflation: the Doug Ford's government is instead emphasizing deficit elimination in its 2023 budget tabled Thursday, in addition to investments for businesses.
The province forecasts a deficit of $1.3 billion for 2023-2024 and a surplus of 200 million for 2024-2025.View larger
Doug Ford's government plans to return to a balanced budget as early as next year.
Most of the measures contained in the budget of 204.7 billion had already been announced.
However, it says:
- The government will expand the Guaranteed Annual Income System to include an additional 100,000 needy seniors.
- Pharmacists will be able to prescribe medications for more conditions, including acne, mouth ulcers and pregnancy-related nausea.
- 10% tax credit (up to $2M /year) to help manufacturers renew their machinery
- An additional $3 million for junior mining exploration companies
- Pharmacists will be able to prescribe drugs for half a dozen more ailments
- Enhancement of the Guaranteed Annual Income Plan and indexation of benefits
- $72 million for the expansion of interventions surgeries in private clinics
- Maintenance of the gas tax reduction (-5.7 cents/l), but only until December 31
- 300,000 cut $ from the budget of the Ministry of Francophone Affairs
Finance Minister Peter Bethlenfalvy denies not helping families in the face of the rising cost of living.
“We understand the challenges many people face, but we didn't wait for this budget to take action.
— Peter Bethlenfalvy, Ontario Minister of Finance
Among other things, he cites the reduction in the provincial gasoline tax last year and the increase in the minimum wage, in addition to the indexation of the benefits of the Guaranteed Annual Income Plan contained in the budget.
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Annual spending tops $200 billion mark for the first time in the history of corporate budgets 'Ontario.
This is the first time in Ontario history that spending has surpassed the $200 billion mark.
Infrastructure spending over the next decade, whether whether for hospitals, highways or schools, exceeds the forecasts of the 2022 budget by almost 25 billion.
However, for political scientist Geneviève Tellier of the University of Ottawa, the big winners of the 2023 budget are businesses, which receive $8 billion in aid. In return, there are no checks or tax cuts for families, she notes.
“There nothing, nothing, nothing [for ordinary Ontarians].
— Geneviève Tellier, political scientist
Ms. Tellier points out that the government of François Legault in Quebec announced tax cuts in its budget earlier this week and that Doug Ford had issued checks to families during the pandemic.
Freshly re-elected last summer, Premier Ford has no obligation to offer candy to voters, explains Ms. Tellier. He is faithful, according to her, to his political thought which has always been to help the economy so that, in return, the workers benefit from it.
In order to come out of the red three years earlier than planned, the Progressive Conservatives are cutting spending from a dozen departments – including Labour, Immigration, Municipal Affairs and Housing, Tourism and Francophone Affairs – and limiting them to approximately 4% annual increase in spending by 2026 on health and education, including.
Government also benefits from a $20.6 billion jump in revenue compared to the forecasts of the last budget, among other things because of inflation, higher revenue from corporate and personal taxes and an increase in federal transfers.View larger
Ontario anticipates lower GDP and higher inflation over the medium term.
Province expects GDP growth to slow and inflation to rise by 2026.
The Progressive Conservatives are setting aside $1 billion in reserves for this year, in addition to a $3.9 billion contingency fund. The Ford government is keeping a reserve fund of $2 billion for next year and $4 billion for 2025-2026, saying it wants to maintain a prudent and flexible fiscal plan that can respond to high economic uncertainty.
For political scientist Geneviève Tellier, this is excessive caution, while grocery bills and the cost of housing, in particular, are very high.
The government attributes the decline in the Francophone Affairs budget this year to the disappearance of one-time funding provided last year for a program aimed at organizations designated as bilingual.
At the heart of the 2023 budget, a new corporate tax credit for the purchase of machinery and equipment and tax relief for SMEs.
- Thanks to this new tax credit announced on Wednesday, businesses will be able to be reimbursed 10% of their expenses for equipment, up to a maximum of 2 million per year.
- The measure should cost 780 million over three years.
The goal, according to the government, is “to help Ontario manufacturers reduce costs, innovate and become more competitive” .
The province is also reducing the tax burden of thousands of SMEs.
- From now on, companies whose turnover does not exceed 50 million, rather than 10 to 15 million currently, will be eligible for the 3.2% tax rate reserved for small businesses.
- According to the Ford government, approximately 5,500 SMEs will share $265 million in additional tax relief from 2022-2023 to 2025-2026.
Premier Ford has promised to build 1, 5 million homes over the next decade to meet the current shortage.
However, in Budget 2023, the Province is only projecting about 80,000 housing starts per year in 2023, 2024 and 2025.
The Province explains that these private sector estimates do not do not take into account the measures the province could take to accelerate housing construction.
“We will not back down, our ambition to build more of housing in the province remains.
— Peter Bethlenfalvy, Ontario Minister of Finance
The budget does not provide additional financial assistance for municipalities who have decried feared revenue losses due to lower fees for developers, a measure requested by the province to promote housing construction.
NDP Leader Marit Stiles accuses the Ford government of “missing the mark” in the current difficult economic environment for many Ontarians.< /p>
“People can't keep up with the rising cost of groceries, housing and gas. »
— Marit Stiles, New Democrat Leader
Official Opposition Leader, New Democrat Marit Stiles, says the budget is “out of touch with reality.”
Stiles says the government should have invested more in the public health care system, in affordable housing and in education, in particular.
She also denounces Premier Ford's decision to end the paid sick leave program established during the pandemic.
How much will the controversial construction project for the new Highway 413 northwest of Toronto cost? For the second year in a row, the budget does not contain details on this subject.
During construction, Highway 413 is expected to support up to 3,500 jobs each year while the Annual real GDP generated could reach $350 million, the government says in the budget.
The 2023 budget also does not specify the location of the new provincial park promised by the Ford government in last year's budget.
The province says the project is being finalized. This new park will provide year-round facilities and recreational activities, including swimming, hiking and cross-country skiing, and will add 250 campgrounds to the Ontario Parks system, the budget reads.
< p class="e-p">The cost of the project also remains unknown.