'Disappointing' Ontario is looking at same deficit number as last November: BMO's Porter
TORONTO - Ontario has laid out a $186 billion spending plan aimed at fighting COVID-19, helping small businesses, and supporting families.
The budget issued by the Progressive Conservative government on Wednesday projects a deficit of $33.1 billion for the year, with the province saying it will take until 2029 to balance the books.
The spending plan contains $6.7 billion for pandemic-related measures, including $1 billion for the vaccine effort, and an additional $2.3 billion for testing and contact tracing this year.
Hospitals and long-term care are receiving money aimed directly at easing pandemic pressures while overall heath funding is being hiked to $69.8 billion, up from $66.7 billion the previous year.
Finance Minister Peter Bethlenfalvy said much of the budget underscores the work required to push through the pandemic.
“Hope is on the horizon,” he said as he delivered the budget in the legislature.
“Until we reach those shores, we will maintain our relentless focus on protecting people's health and our economy.”
Hospitals will see an additional $1.8 billion and long-term care will receive $650 million this year to address demands placed on both sectors by the pandemic, the budget indicated.
Bethlenfalvy said the hospital funding, which was previously announced, will help address COVID-19 expenses and a backlog of surgeries.
The funds for long-term care will be used to prevent the spread of COVID-19 in nursing homes, increase staffing and buy personal protective equipment.
The province also put a price tag on its plan to have nursing home residents receive an average of four hours of direct care every day, saying it will cost $4.9 billion over the next four years.
That plan was first introduced in the government's November 2020 budget but its cost was not detailed. The government said the funds will help recruit 27,000 personal support workers to help achieve the new standard.
The budget also contains funds to help small businesses and families address pandemic-related costs.
The government said it will offer a second round of grants to hard-hit small businesses and create a new job training tax credit.
The grant program, first introduced in January, provides between $10,000 to $20,000 to help small businesses affected by provincial lockdowns.
The government estimates the program will cost $3.4 billion and help an estimated 120,000 small businesses.
The budget also introduces a new Ontario Jobs Training Tax Credit to help retrain people who have lost their jobs during the pandemic.
The program - which will cost $260 million - will provide up to $2,000 per person to pay for half of their eligible training expenses.
Families with children can expect a third round of payments through the Ontario COVID-19 Child Benefit, with the amount doubling to $400 per child and $500 for each child with special needs.
Ontario will also spend an additional $2.8 billion to bring broadband access to more people across the province by 2025. The funding will help expand broadband service to 700,000 additional homes, the budget indicated.
NDP Leader Andrea Horwath said the budget failed to make the urgent investments people need to get through the pandemic, noting a lack of funding for paid sick days, paid time off to get vaccinated or plans to hire more education workers.
She also said the government hadn't spent enough on businesses supports, job creation and long-term care.
“This budget doesn't even mention the third wave, let alone help people through it,” she said.
The budget charts a long path to balance, with the books not expected to enter the black until a hypothetical third term under the Progressive Conservatives.
The document projects Ontario will run a deficit of $26.2 billion next year and $18.7 billion in 2023-2024, with the shortfalls ending in 2029-2030 with a $900 million surplus.
When asked about the years of deficits that lay ahead, Bethlenfalvy said he had no regrets over the government's pandemic spending.
“I'd do it over again, protecting the health and well-being of the people of Ontario,” he said. “This is what responsible governments do.”
This fiscal year, the government's balance sheet will be helped by a rebound in revenues as the economy is projected to gain strength, the budget indicates.
Total tax revenue is expected to rise to $104.8 billion, up from $99.1 billion in 2020-2021.
The government is also projecting additional revenues from some of its business enterprises, like the Ontario Cannabis Store and the Ontario Lottery and Gaming Corporation.
The province said it's projecting cannabis revenues to jump from $70 million last year, to $170 million in 2021-2022.
Government revenues from OLG dropped to $300 million last year - attributed to factors including the pandemic closure of many casinos - but are projected to increase to $1.2 billion this year. That is still down by over a billion dollars from revenues received in 2019-2020.