Premier Doug Ford’s Progressive Conservatives are spending their way out of the pandemic-induced recession.
Finance Minister Rod Phillips tabled a record $ 187-billion budget on Thursday that earmarks an additional $ 7.5 billion in new funding to fight COVID-19, which has killed some 3,200 Ontarians since March.
That’s atop the $ 7.7 billion announced last spring, hiking health spending by $ 15.2 billion this year.
“Our government is sparing absolutely no expense in the fight against COVID-19,” Ford told reporters.
In the legislature, Phillips underscored that “your government will do whatever it takes to get you through this.”
There are no new tax increases in the fiscal blueprint, and there are breaks for seniors and most businesses.
The Tories plan to spend at least $ 45 billion over three years on dealing with COVID-19, which at its peak earlier this year had cost 1.2-million jobs in the province.
“As the people of Ontario understand, the current levels of government spending are neither sustainable or desirable in the long run,” said the treasurer, who hopes to lower overall spending to $ 183.4 billion in his next budget that will be introduced before March 31, and forecasts a $ 186.3-billion plan for 2022-23.
“But as the global pandemic continues around the world, they remain necessary today. We are not alone in facing these fiscal challenges. Every country, province and state is wrestling with them,”
With a record $ 38.5-billion deficit for 2020-21, Phillips acknowledged the economic uncertainty caused by COVID-19 and gave a range of scenarios for the future fiscal outlook.
The government is projecting a shortfall of $ 33.1 billion in the next fiscal year — although it could be as high as $ 35.6 billion and as low as $ 27.7 billion, depending upon how the economy rebounds.
For 2022-23, the deficit is expected to be $ 28.2 billion with a possibility of it dipping to $ 21.3 billion or soaring to $ 33.4 billion.
That means the Conservatives will enter the June 2022 election awash in red ink. A road map to eventually balancing the books is expected in next March’s budget.
Despite the revenue challenges, there are some tax cuts in this spending plan.
The Tories are reviving and enriching the previous Liberal government’s “healthy homes renovation tax credit,” which expired in 2016.
Renamed “the seniors’ home safety tax credit,” the bolstered measure allows eligible people to claim up to 25 per cent of up to $ 10,000 in renovation spending for things like wheelchair ramps, stair lifts and stability bars. The Liberal break allowed 15 per cent of costs to be claimed.
“It means an Ontario senior — or a family with a grandparent living in their home — would receive $ 2,500 back for a $ 10,000 renovation to make their home safer,” Phillips said of a measure that will cost the treasury $ 30 million.
The government hopes the move will help ease the strain on nursing homes.
There is also a break for some 200,000 businesses — 94 per cent of those in Ontario — by reducing the business education tax rate by about one-third to 0.88 per cent. That should save businesses $ 450 million annually.
“It means a small employer, like a hotel in London, could save $ 44,000 annually,” the treasurer noted.
On electricity rates for businesses, Phillips pledged to “wind down high-cost contracts” signed by the Liberal government by taking over the expense from ratepayers and putting it on the province’s tab — essentially meaning the burden will be shared by taxpayers.
That could mean projected hydro savings of 14 per cent for industrial users and 16 per cent for commercial employers, but will cost the treasury $ 1.3 billion for the first three years and should gradually decline after that until the last of the contracts expires in 2040.
Phillips reiterated what the Star revealed on Oct. 7, that work is underway to “permanently allow the sale of alcohol to be part of food takeout and delivery orders.”
That temporary change, in place since March 26 to help restaurants and bars struggling in the pandemic, had been due to expire at the end of the year.
“We will continue to look at changes that make the alcohol sector more modern,” the treasurer told reporters.
A Campaign Research survey for the Star in June found nearly three-quarters of Ontarians — 73 per cent — support the move with only 16 per cent opposing off-licence sales while 12 per cent had no opinion.
Thousands of restaurants and bars across Ontario have embraced the change, adopting a more European way of selling directly to the public.
Because the LCBO will continue to control all wine and spirits distribution, the treasury’s bottom line should not be adversely affected. The privately owned Beer Store supplies most bars with their suds.
Thursday’s budget was a contrast to last year’s $ 163.4-billion budget, infamous for the now-cancelled defective blue licence plates and since-reversed cuts to municipal public-health funding.
Ten weeks after that poorly received plan, which had a $ 10.3-billion deficit, was released in April 2019, Ford tapped Phillips to replace then-treasurer Vic Fedeli.
This year’s budget increases spending by 14.4 per cent from last year and is an 18 per cent hike from the final spending plan by former premier Kathleen Wynne’s Liberals in 2018.
Still, NDP Leader Andrea Horwath said the budget is too little too late because the Tories are “sitting on” billions of dollars in contingency funds that could be helping families now.
“Doug Ford … is waving a white flag in the fight against COVID-19,” she said, saying the plan “doesn’t take any new action.”
Horwath said it was “shocking” that the Tories are being so vague about new investments planned for long-term-care homes, the scene of two-thirds of Ontario’s COVID-19 deaths. It’s estimated that could cost $ 1.6 billion a year, but no such funds were accounted for in the budget.
“This is an urgent matter. It needs urgent action. There’s no action to urgently address this crisis. It’s shameful,” she said.
Liberal Leader Steven Del Duca said the blueprint was a “betrayal” of everyone from seniors worried about COVID-19 to students packed into crowded classrooms during the pandemic.
“It’s a betrayal of every single family who has been thrown into poverty,” said Del Duca, adding “Doug Ford is cheating Ontario” because he is not helping the most vulnerable in society, like women and people of colour.
Green Leader Mike Schreiner said the Tories should have used the budget to better help small businesses battered by the recession.
“This is a bare bones budget that fails to help now. It’s clear that … the premier’s economic recovery plan is about building back recklessly,” said Schreiner.
“Businesses need that direct support now.”
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