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Ontario Budget Analysis

The Ford government presented its first Ontario budget today along with a plan to tackle the province’s reported $13.5 billion deficit — a key election campaign promise. The deep cuts typically seen when confronting a large deficit did not materialize to the extent some expected (or feared). 
 
Plans for Ontario’s health and education sectors have dominated recent headlines. Today’s budget committed modest investments into health care and announced a plan to consolidate more than 20 regional health agencies into one, and intermediate and high school class sizes are set to increase. 
 
Additionally, with the aim to save Ontarians money, the government will introduce sweeping auto insurance reforms and a childcare tax credit for low- to moderate-income families. 
 
THE NUMBERS
• The government plans to balance the budget in five years—notably not during this mandate— carrying an $11.7 billion deficit this fiscal year, falling to $10.3 billion by next year, to $3.5 billion in 2022-23 and with a surplus of $300 million in 2023-24.  
• No new taxes for individuals or businesses.
• Growth in program spending will be restricted to 1% per year. This will not be easy to achieve.
 
OPEN FOR BUSINESS
The new licence plate slogan may be “A Place to Grow,” but the Ford government is hoisting high its “Open for Business” flag in this budget. The government will:
• Provide $3.8 billion in provincial corporate income tax relief over six years through faster write-offs of capital investments under the Ontario Job Creation Investment Incentive. During the campaign, the Tories had pledged to cut the corporate tax rate from 11.5% to 10.5%.
• Maintain minimum wage at $14 per hour, reduce WSIB premiums, cancel cap-and-trade and offer corporate income tax relief to save Ontario businesses approximately $5.0 billion in 2019.
 
SEEING RED
The Ford government has repeatedly vowed to reduce “red tape,” and that was a theme of Budget 2019. Building on its Making Ontario Open for Business Act and its Restoring Ontario’s Competitiveness Act, which “remove obstacles to investment, growth, and job creation in over a dozen sectors”, the government says it will:
• Cut red tape by 25% by 2020. Once fully implemented, these changes are expected to provide Ontario businesses with over $400 million in ongoing savings on their compliance costs.
• Adopt a digital-first strategy to make more services available online for businesses and individuals.
• Streamline payment, licensing, certification and other government processes for farmers and agri-food businesses and the pension and insurance sectors.
• Launch the “Putting Drivers First” program to increase the range of plans available to drivers make the claims process easier to navigate, also creating more competition between insurance providers.
 
LONGER LEASH, TIGHTER REINS
With significant attention on alcohol, cannabis and gambling, the Ford government is pledging to treat Ontarians “like adults.” However, program spending will be tightly restricted in order to tackle the hefty deficit.
 
The government will:
• Introduce legislation permitting tailgating at sporting events, allowing municipalities to permit alcohol consumption in public places, permit licensed establishments to serve alcohol earlier, advertise “happy hour” specials and free alcohol in casinos, and—as previously promised—allow corner and big box stores to sell beer and wine.
• Lift the cap of 25 cannabis retail stores for the entire province and, in the meantime, develop a pre-approval plan to begin processing applications.
• Several ministries face budgetary reductions, most notably:
     o Indigenous Affairs
     o Environment, Conservation and Parks
     o Children, Community and Social Services
     o Training, Colleges and Universities.
 
With the commitments to cut the growth in program spending, eliminate red tape and balance the budget over time, businesses and organization with a policy idea that will help the government meet those goals will find a government open to innovative solutions that meet their objectives.
 
OPPOSITION REACTION
Andrea Horwath, leader of the Ontario NDP, labelled the budget as one of “outright cruelty,” and accused the Ford government of “dragging” Ontarians in “the wrong direction.”
 
John Fraser, interim leader of the Ontario Liberal Party, denounced the budget for not protecting what matters most to Ontario families, and criticized the Ford government for dismantling government services that families depend on. 
 
Mike Schreiner, leader of the Ontario Greens, attacked the budget for mentioning “booze” and “gambling” 63 times, while mentioning “climate change” only 15 times and “poverty” zero times.
 


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