“Without healthy people, you can’t have a healthy economy,” Minister Bethlenfalvy says of his first budget as Ontario Finance Minister. Today, Minister Bethlenfalvy presented Ontario’s Action Plan: Protecting People’s Health and Our Economy, a decidedly spend budget from the Ford government. Bethlenfalvy and Ford share the approach of U.S. President Biden – vaccinate and stimulate.
Analysis and Overview
In its second budget and third fiscal update since the start of the pandemic, Ontario’s 2021 budget aims to address the emergency health and economic development priorities facing the province. In his first budget as Finance Minister, Peter Bethlenfalvy also presents a path to more sustainable finances in a post-pandemic world, and does so while making record investments in hospitals and long-term care.
With a recognition that we are still in an emergency situation, and that more funding will no doubt be coming from the federal government when they table a budget next month, Ontario’s budget commits to achieve balance by the end of the decade, and slowly reels back $51 billion in emergency expenditures over the next two fiscal cycles – all while increasing base program funding at or above 3% per year over the next four fiscal years.
While the document sees GDP and employment reaching pre-COVID levels in early 2022, the document aims to provide support for parents ($1.8 billion for a third round of payments to support parents with the COVID child benefit), small businesses (total support of $3.4 billion to support 120,000 small business with a second round of the Ontario Small business support grant), hard-hit sectors ($400 million over the next three years in new initiatives to support tourism, hospitality and culture businesses), and a meaningful jolt to expand broadband infrastructure across the province with $2.8 billion in new dollars, bringing the government’s total broadband commitment to $4 billion.
With these investments, the Ford Government is targeting key constituencies and regions that have been especially impacted, and presents a balanced approach to getting to the end of this pandemic.
Healthy Spending
As expected, the primary focus of the budget is centred around defeating COVID-19 and better protecting our must vulnerable in hospitals and long-term care facilities. The province is currently in Phase 2 (of 3) of the Vaccine Distribution place, which will see approximately nine million Ontarians vaccinated by July 2021. While the end is near(ish), the Minister of Finance committed to shoring up our provincial healthcare capacity by earmarking:
- $3.7 billion to a comprehensive COVID testing strategy;
- $1 billion to support the rollout and distribution of the COVID vaccinations;
- $1.8 billion to address the surgical backlogs that have built up over the past year, building off the 3,100 additional hospital beds created since the beginning of Covid-19 and the opening of the Cortellucci Vaughan Hospital in February 2021;
- $650 million (on top of the previously invested $1.4 billion) for long-term care homes resulting in 20,161 new beds, and 15,918 upgraded beds across the province;
- $2 million to attract new PSW’s and nurses to work at long-term care facilities; and
- $121 million to accelerate the training of 9,000 PSW’s.
The Minister of Finance also endeavoured to tackle our looming mental health crisis, promising more funding for needed services and support. The budget includes:
- $3.8 billion for mental health and addiction support; and
- $12.5 million to the Ontario Provincial Police (OPP) over three years for enhanced mental health services and training and an additional $8.4 million over three years for OPP crisis call program will come online for individuals experiencing a mental health crisis.
Economic Jolt
The cornerstone of this budget is to stimulate the economy to encourage growth and eventual deficit reduction. With that in mind, the Ford government will spend $23.3 billion to stimulate the economy and create new jobs. This includes a commitment of:
- $980 million for the “Ontario COVID-19 Child Benefit”, as the Ford government continue to make direct payments to parents;
- Creating 30,000 new childcare spaces, 10,000 of which will be in new schools;
- $40 million into improving technology for teachers and students, and an additional $21.4 million into the new Virtual Learning Strategy for postsecondary education institutions;
- $1.7 billion will be invested in the second round of Ontario’s Small Business Support Grant payments;
- $976 million through the Canada Emergency Commercial Rent Assistance in partnership with the federal government;
- $260 million directed to the Ontario Jobs Training Tax Credit; and
- $614.3 million to targeted employment and training support programs.
Critical to the growth of Ontario economy is investments in infrastructure. The Premier sees these investments as essential commitments delivered to loyal Ford Nation ridings and swing ridings in both the GTA and rural Ontario. In the lead up to the 2022 election, expect politicians from across the PC Party’s target ridings doing photo ops to re-announce the budget’s commitment to:
- $2.8 billion in broadband infrastructure;
- $28.5 billion for GTA transit; and
- $21 billion in highway expansion and rehabilitation.
Of note, the budget also proposes to reduce the small business Corporate Income Tax rate and lowers high Business Education Tax rates to promote job creation. Restaurants will receive specific relief measures based on revenue loss due to health restrictions.
Honourable Mentions
There is much to analyze in the coming weeks from Minister Bethlenfalvy’s 210-page budget. Here are some notable additions:
- The creation of a task force led by the Minister of Finance to ensure inclusive economic growth, and address barriers women face, especially after COVID-19;
- The development of iGaming, a legal internet gaming market to open the market and create a new revenue source;
- $117.3 million in targeted employment and training for women, racialized individuals, indigenous peoples, youth and people with disabilities;
- $100 million in new Ontario Tourism and Hospitality Small Business Support Grant;
- Free entry to provincial parks Mondays through Thursdays this summer;
- $150 million in funding for a tax credit aimed at encouraging residents to explore Ontario; and
- $10 million for wineries, and cideries, and $1.2 million to support wineries and agri-tourism who have suffered disproportionately due to the lockdown.
All Opposed
Not everyone loves the approach. Leader of the Opposition Andrea Horwath tweeted, “If this were my budget, I would urgently invest in [long-term care], our students and schools, a new Brampton hospital, and the emergency room Peel Memorial needs. Ford didn’t do that.” Ontario Liberal Leader Steven Del Duca plans to “fight like hell”, to keep the province focused on “what matters”: kids in classrooms, fighting for quality care for our parents, grandparents and those who support them, and supporting part-time service workers through policies like paid sick leave.
For help navigating Queen’s Park or to discuss this Perspective , contact Karl Baldauf. To receive McMillan Vantage’s bi-weekly COVID-19 updates, please contact info@mcmillanvantage.com.
