Ontario’s deficit will rise to $ 19.9 billion this year as the Ford government introduces new measures for the elderly, low-income workers and car travelers in a budget that hopes the province can return to balance over time in the next provincial elections in 2026.
The deficit for the fiscal year ended last month fell from approximately $ 33.1 billion in 2021 and $ 21.5 billion in the autumn economic report for 2021 to $ 13.5 billion.
The 2022 budget says the deficit will fall to $ 10.8 billion in 2023-2024, $ 6.1 billion in 2024-25, $ 5 billion in 2025-26 and only $ 700 million in 2026-2027, after the $ 1.5 billion reserve is removed.
The Independent Financial Accounting Authority suggested earlier this month that personal computers could balance the budget by 2023-24 without the new costs confirmed on Thursday.
The $ 198.6 billion budget on Thursday is the largest in Ontario’s history, surpassing Kathleen Wynne’s final budget for 2018. That budget will be $ 177 billion adjusted for inflation, according to the Bank of Canada.
Prime Minister Doug’s budget for election year includes a promise of tax breaks for low-income workers, a gas tax cut and how much his much-publicized end to vehicle registration sticker fees will cost.
The Ford government is betting heavily on infrastructure, with $ 10 billion in extra money to build and renovate hospitals over the next 10 years.
The funds will build new hospitals in Brampton and Mississauga and renovate other hospitals in Etobico and Scarborough, along with a number of other projects across the province.
MASTER CONSTRUCTION
There is also nearly $ 4 billion more to build highways in the province over the next decade, although provincial bureaucrats would not say how much will be devoted to the new Highway 413 or Bradford Bypass, projects that are expected to cost billions alone. themselves and have not yet been put up for auction.
Finance Minister Peter Bethlenfall defended the nearly $ 200 billion spending plan, which envisions the province remaining in deficit until the next election or later, saying he was addressing accessibility issues caused by high-generation high inflation rates.
“What you’ve seen is that we’re cutting costs on many fronts – a lower income tax for those earning $ 50,000 or less is part of our plan – we’ve given the license plate stickers – and the previous liberal government.” they just increased the fees every year – with the stickers on the license plates it’s like an immediate tax cut. “
Addressing the budget hawks, he said the new plan still eliminates the deficit two years earlier than envisaged in his last budget.
“Our debt-to-GDP ratio is down eight percent, and our commitment to balancing the budget will happen two years faster than we said last year,” he said.
But when asked four times whether he would actually accept Thursday’s budget if computers won the June 2 election, Bethlenfalvi was less clear.
“I will commit to the people of Ontario that this is our plan. This is the budget we are importing and we are going to get the people of Ontario to vote for this budget. And I have complete confidence in the people of Ontario that they will accept this budget.
NDP leader Andrea Horvat said he believes there is no guarantee that the RS will accept the current budget if they win the election.
“I am absolutely concerned about the bait and the switch. There must be a hidden budget somewhere – because the Minister of Finance refused to commit to the document he presented to you today, he was very uncomfortable. “
She called and said the budget was full of “tricks” and “misconceptions” and failed to acknowledge the seriousness of housing affordability and rising inflation.
Asked again by CP24 whether RS would commit to reintroducing exactly the same budget bill for adoption after the June 2nd elections, Bethlenfalvi said they would.
“Yes, this is the plan we will follow. “This is the plan to gain the trust of the people of Ontario,” he told CP24 live. “They have to pass this bill. This will be the budget we will reintroduce if we are re-elected. “
MONEY FOR SENIOR CARE
Brand new is the tax credit, aimed at weak elderly people who still live at home and receive home care from a nurse or companion.
The new home care tax credit will offer taxpayers 70 and older a loan of 25 percent of medical expenses up to $ 6,000, for a maximum loan of $ 1,500. Older people who earn $ 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 in terms of price is the government’s ongoing efforts to end vehicle sticker renewal fees and send $ 60-120 a year in vehicle discounts to all Ontario car owners.
But the budget document says the rebate will cost taxpayers $ 1.8 billion, $ 800 million more than was suggested by government sources when the promise was first published.
LOW INCOME TAX LOAN
The budget also details plans to extend the eligibility of Ford’s government’s low-income and low-income (LIFT) tax credit.
The new LIFT loan will include taxpayers who earn up to $ 50,000 individually or up to $ 82,500 per household and will provide up to $ 875 in tax breaks.
The extended threshold means that 700,000 additional taxpayers in Ontario will be eligible for credit.
It will cost taxpayers $ 400 million each year.
NDP financial critic Catherine Fife said the loan was just a few dollars from a taxpayer each year.
“It simply came to our notice then. It’s not easy to find your way around, and that’s a little bit, what we’re really talking about are just dollars in people’s pockets, one or two dollars. There is no significant recognition that people are hurting. “
In July comes a reduction in provincial taxes on gasoline by 11 cents per liter, which expires at the end of 2022.
The budget for 2022 predicts that this tax cut will cost the province $ 645 million in lost revenue this year.
The document also includes an additional $ 3.5 million for emergency preparedness and $ 96 million over three years to equip and train Ontario police to respond to future protests and blockades at land border crossings.
In general, the deficit is shrinking not due to spending cuts, but rising revenues.
Bureaucrats said the 2022 budget contained nearly $ 20 billion more revenue than last year, thanks in large part to the full opening of all sectors of the economy following the closure of the COVID-19 pandemic.
Many non-health sectors operate below projected spending targets.
Education is $ 1.3 billion in budget in 2021-2022, largely due to lower-than-expected enrollment. Social services and children received $ 632 million in the budget due to lower needs for child benefits in Ontario and fewer applications for social assistance than expected.
Liberal leader Stephen Del Duca characterized this lower amount of education as a reduction.
“As a father of two young daughters attending publicly funded schools, I am absolutely appalled that Ford’s Conservatives today confirmed that they have reduced $ 1.3 billion from our public education system and have chosen in the second year of COVID to “They are not spending the extra $ 2 billion that they have already budgeted to help tackle COVID in our schools,” he told CP24. “It’s deeply, deeply disappointing, but not shocking, because everyone knows that Doug Ford and his team are not interested in publicly funded education.
“Let’s talk about who Doug Ford has taken care of for the last four years. Everyone knows that about Doug Ford. These are his rich political donors, this is the richest of the richest and biggest corporations. “
The impact of rising interest rates has begun – with borrowing costs rising by $ 21 million from last year – a mistake in rounding off a budget of nearly $ 200 billion, but still significant.
The interest rate increase costs the province $ 7 million as a base point per year, which means that the 0.50 percent increase costs the province $ 350 million in additional interest costs.
In a faster-than-projected growth scenario, the province could be in the black by 2024-25 with a surplus of $ 2.4 billion.
Net debt is expected to rise to $ 395 billion this year, from $ 324 billion five years ago.
Ontario still plans $ 1.1 billion to test COVID-19 in 2022-23.
This is equivalent to approximately 64,000 PCR tests per day, using existing values of about $ 47 per test, a percentage of testing that the province has not reached for more than three months and will struggle to achieve under current eligibility rules.
Real estate continues to make a significant contribution to the government treasury, with land transfer tax revenue rising $ 212 million to nearly $ 5.7 billion in 2022.
Also, tightening the non-Ontario speculation tax, which now covers all of Ontario and includes groups such as foreign students and foreign workers who previously had layoffs, will earn the government $ 175 million this year and $ 235 million by 2024-2025. d.
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