Ontario Conservatives’ pre-election budget laden with big ticket items

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Ontario’s Progressive Conservatives are straying from the path of balance with an election budget laden with billions of dollars in investments in hospitals, highways and public transit.

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The document, which is expected to serve as a Conservative platform in a campaign set to begin next week, says the party projects Ontario will be $19.9 billion in the red this year – a bigger deficit. than that of the province in the first pandemic year. The Progressive Conservatives don’t expect to balance until 2027-2028.

This is despite Ontario’s Financial Accountability Office recently saying the province is on track to balance the budget by next year.

Finance Minister Peter Bethlenfalvy defended the deficit and the huge $198.6 billion budget, saying now was the time to invest and rebuild.

“Sparing no expense during the pandemic was the right thing to do,” he said.

“Rebuilding Ontario’s economy today is the right thing to do in a fiscally responsible way, which we have demonstrated in this budget.

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In the pre-pandemic life of this government, it focused on tightening the purse strings – with the “search for efficiency” a key refrain of the 2018 campaign – and it came under heavy criticism in 2019 when the This year’s budget resulted in sweeping cuts to programs that were not revealed until after the tabling. of the document.

The government had also succeeded in reducing a large deficit necessitated by COVID-19-related spending in the first year of the pandemic, reducing it from $16.4 billion in 2020-21 to $13.5 billion. dollars in 2021-22. These amounts are also well below initial projections.

But now the Conservatives plan to push the province further into deficit, with program spending rising an average of 5.1% over the next three years, higher than the 4.2% average of the past 10 years. years. It is fueled largely by large infrastructure funding commitments.

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The government has pledged $158.8 billion over 10 years for projects such as hospitals, highways and public transit, including $20 billion this year alone.

In the weeks leading up to the budget, the government announced more than $2 billion in funding for various hospital projects and a plan to spend $1 billion over three years on home care.

Proposed highway projects announced in the budget include a new double bridge over the Welland Canal on the Queen Elizabeth Way, the widening of Highway 401 in eastern Ontario from Pickering and Oshawa, the widening of Highway 17 from Arnprior to Renfrew and reconstruction of a section of Highway 101 in Northern Ontario.

The document contains little that is new, especially compared to the party’s 2018 platform which promised lower electricity bills, lower income tax, lower gasoline prices and money for a beer – although all of this was not accomplished.

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A budget section on “cutting costs” is largely based on previously announced measures, including reducing the gas tax by 5.7 cents per liter for six months starting July 1, which is expected to cost 645 million, striking a deal with the federal government to provide $10 a day child care services on average by 2025, and eliminating and reimbursing license plate renewal fees through March 2020, at a cost of $1.8 billion.

Two new affordability measures are a proposed Ontario Elderly Home Care Tax Credit that will provide recipients with up to 25% of eligible medical expenses up to a maximum of $1,500, and an enhancement to the Ontario Low-Income Individuals and Families Tax Credit.

The Conservatives are proposing to increase the amount of the low-income tax credit from a maximum of $850 to $875 and allow more people to qualify. Currently, the benefit is being phased out at a rate of 10% for individual income above $30,000 up to $38,000 and the government is proposing to reduce this phase-out rate to 5%, which would allow people earning up to to $50,000 to qualify.

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An estimated 1.1 million low-income workers would benefit on average from additional tax relief of $300 for 2022, with the measure expected to cost an additional $320 million.

The Conservatives are also proposing to extend film and television tax credits to online productions.

NDP Leader Andrea Horwath said she was skeptical of big spending promises.

“Doug Ford is going to start cutting again at the end of this election if we give him the chance,” she said.

Liberal Leader Steven Del Duca said Ontarians would find the budget disappointing.

“This document completely lacks the kind of ambition that I know Ontarians have for our province and want to see for the future of our province,” he said.

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Green Party Leader Mike Schreiner said it’s a “sprawl-friendly, climate-busting budget” that will undermine the protected Greenbelt by running highways through it.

Bethlenfalvy touted a previously announced plan to invest in mining critical minerals in the north to supply materials for electric vehicle batteries made in the southern part of the province.

“It’s our green plan,” he said.


BUDGET HIGHLIGHTS

$198.6 billion in spending, including billions earmarked for infrastructure this year and over the next decade.

$158.8 billion promised over 10 years for highways, public transit and hospitals. Infrastructure spending this year alone is $20 billion.

Hospital infrastructure projects are expected to receive more than $40 billion over the next decade, including approximately $27 billion in capital funding.

$25.1 billion over 10 years pledged to repair, expand and create highways, roads and bridges in various parts of the province.

Several provincial agencies could leave the Toronto area in a move the government says would save real estate costs and create jobs in other areas. (The government this week announced plans to move the headquarters of the Workplace Safety and Insurance Board to London.)

The Ontario Public Service will also explore a hybrid work model for employees and is piloting co-working spaces in London and three other cities.

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