Provincial Budget Highlights

Nov 6, 2020 | COCA News, Economy News

Ontario Budget Highlights 

Ontario’s Minister of Finance, Rod Phillips, delivered his first budget, the Ford government’s second, on the afternoon of Thursday November 5th.  The budget document titled “Protect, Support, Recover – Ontario’s Action Plan” (https://budget.ontario.ca/2020/index.html ) is a three-year road map.  Highlights include: 

  • A forecast deficit of $38.5 billion for 2020-21 

  • The deficit for 2021-22 is forecast to be $33.1 billion and the shortfall for 2022-23 is pegged to be $28.2 billion 

  • GDP is forecast to decline by 6.5% in 2020

  • Because of looming uncertainties resulting from the pandemic, a range of growth forecasts are presented; GDP growth is predicted to come in between 3.3% and 7.5% in 2021 and between 1.0% and 3.5% in 2022    

  • In two years’ time, the province’s debt to GDP ratio will climb to 50% 

  • Government spending will hit a record $187 billion

  • $15 billion will be added to COVID–related support funding for a total of $45 billion over 3 years 

  • $30 million has been allocated for a new Seniors Home Safety Tax Credit that allows seniors and their families to access a 25% tax credit for the cost of home accessibility improvements that allow the seniors to continue to live in their homes  

  • $380 million has been allocated to parents to offset childcare and learning-at-home expenses – $200 per child up to age 12 and $250 per special needs dependant child up to age 21   

  • $150 million in tax spending has been allocated to incent Ontarians to vacation in their home province  

  • $4 billion has been allocated for the COVID-19 contingency fund and $1 billion for the “Support for People and Jobs” fund 

  •  An additional allocation of $2.5 billion more for the hospital sector this year to help fight the pandemic 

  • $1.3 billion has been allocated to subsidizing electricity costs for industrial and commercial electricity users  

  • An additional $680 million has been allocated over the next four years to expand access to broadband in the province’s rural areas  

  • $180 million has been allocated over three years to help retrain workers who lost jobs due to the pandemic, especially those in the service industries. 

  • The Employer Health Tax exemption threshold which had been increased to $1 million of payroll to provide employers with relief during the pandemic, has been made permanent at a cost of $360 million

  • The rate of the Business Education Tax will be standardized to help 94 per cent of Ontario businesses save on property tax. 

  • Planned tax increases on beer and wine will be delayed until 2022 

  • The government plans to change how property taxes are assessed for some small businesses and industrial facilities   

Here are a few things the budget did not do: 

  • The budget was short on additional public infrastructure investment to create jobs, inject money into the economy immediately and ramp up economic growth 

  • The budget did not propose amending the Workplace Safety and Insurance Act to amend the calculation of the maximum insurable earnings ceiling for 2021; the maximum insurable earnings ceiling increased by almost 8% for 2021 due to an aberration in the legislated calculation and is estimated to cost the construction industry an additional $50 million that the fully funded WSIB doesn’t need 

  • The budget did not propose to amend the WSIA to end the 72-month lock-in provision 

  • The budget did not present a path to balance