Budget 2023: Building a Strong Ontario
The Ontario Government released their second budget of their four year mandate titled Building a Strong Ontario, Budget 2023. This year's fiscal plan strikes a noticeable change from the last several budgets that steered the Government through the COVID-19 pandemic. While Ontario saw record levels of spending and deficits over the past three years that helped provide support to Ontarians when they needed it most, Budget 2023 is a much more constrained plan than its 2022 counterpart which was the centerpiece of the Progressive Conservative election platform.
The most noticeable part of Budget 2023 may well be what was missing - references to pandemic spending of years gone by. Instead the Ontario Government has laid out a fiscal plan for the years ahead, anticipating uncertain economic times while making investments in services, infrastructure and Ontario’s workforce of the future.
Budget 2023 is broken down into two major thematic buckets, with underlying breakdowns for each:
- Building Ontario’s Economy for Today and Tomorrow
- Building Highways, Transit, and Infrastructure Projects
Working for you
- Working for Workers
- Keeping Your Costs Down
- Better Services for You
- Protecting You and Your Family
As we’ve come to expect, the Ontario Government spent the last few weeks teasing out announcements that were expected to be fully detailed in the budget. The province had telegraphed much of their plans leading up to yesterday, whether it was securing record investments in Ontario’s automotive industry, increased funding for training Ontario’s future workforce, or the plan to introduce the new Ontario Made Manufacturing Investment Tax Credit. The only real surprise, if any, in this year's budget was the economic forecast that showed Ontario’s accelerated path to a balanced budget as a result of soaring revenues and assisted by increased federal transfers that were successfully negotiated by Premier Ford .
Ontario's Fiscal Situation
After unprecedented spending in response to the pandemic over the last three years, Minister Bethlenfalvy tabled a budget that is designed to steer the province back to balance. This year's budget saw Ontario’s deficit come in much lower than was anticipated out of last year’s fiscal plan, with the province expecting a deficit for 2023/24 of $1.3 Billion, down from the forecasted $12.3 Billion in Budget 2022.
Starting next year, the province is projecting a modest surplus of $200 million, meaning Ontario is on track to balance the budget three years ahead of what was projected in last year’s Fall Economic Statement. The government is projecting a further surplus of $4.4 billion in 2025/26.
It comes as no surprise that one of the key pillars of Budget 2023 is the Government’s ongoing plan to invest in Building Ontario, a commitment to continue to grow the economy while also investing in record infrastructure expenditures. The Ford Government after all won a landslide victory last June on a mandate to “Get it Done” when it came to key policy proposals like building new highways and hospitals. Budget 2023 builds off that commitment by delivering on the most ambitious capital plan in Ontario’s history, with planned infrastructure spending of more than $184 billion over 10 years. This includes new highway projects like Highway 413 and the Bradford Bypass, in addition to improvements to other highways such as widening the 401 in Durham Region. There are also record investments in public transit through GO Transit expansion and subway developments like the Ontario Line in Toronto.
The Government also highlighted its ambitious plan for Building Ontario’s Economy for Today and Tomorrow. The Budget confirmed the Government’s intention to launch the new Ontario Made Manufacturing Investment Tax Credit, which would provide a 10 percent refundable Corporate Income Tax credit. Budget 2023 also lauded the work the Government continues to undertake in attracting over $16 billion in investments by global automakers and suppliers of EV batteries and battery materials - a key pillar in Premier Ford’s re-election promises last summer.
Working for You
In contrast to the Government’s investment in the economy of tomorrow, and the infrastructure necessary to support that economy, Ontario has also made record investments in Ontario’s workforce and the services that support Ontarians. The Government continues to build on its Working for Workers theme by announcing in the Budget that they are providing $224 million in 2023–24 for a new capital stream of the Skills Development Fund to leverage private-sector expertise and expand training centres. The Government also announced that they are enhancing the Ontario Immigrant Nominee Program with an additional $25 million over three years to attract more skilled workers. In addition, the government is expanding access to dual credit opportunities in health care-related courses for an additional 1,400 secondary students.
Budget 2023 is also investing $14.7 million over two years, starting in 2024–25, to launch a new collaborative Doctor of Veterinary Medicine program with the University of Guelph and Lakehead University.
As the Province deals with the inflationary economic pressures facing Ontarians, Budget 2023 has extended the current gas tax and fuel tax rate cuts for an additional year, keeping the rates at 9 cents per litre until December 31, 2023. The government has also temporarily doubled the Guaranteed Annual Income System (GAINS) payments for 2023 to help approximately 200,000 eligible low income seniors.
Budget 2023 also had a strong focus on continued investments in health care, primarily focusing on their theme of care that is most convenient for Ontarians. The Government announced that they are expanding pharmacists scope of practice to allow pharmacists to prescribe medication for more common ailments than their program had previously allowed. The government also announced that they are accelerating home care investments to bring funding in 2023–24 up to $569 million, including nearly $300 million to support contract rate increases to stabilize the home and community care workforce.
Budget 2023 was a notable shift in both tone and policy from the fiscal plans that had preceded it from the Ford administration over the past 5 years. While the pandemic had forced the Ontario Government to have a laser focused approach on dealing with the economic and public health realities of COVID-19, this year's budget was a preview of what may be upon the horizon. With the global economy approaching troubled waters, the province is taking a tempered approach to the uncertainties of tomorrow. The Government’s plans to bank contingencies while also investing in infrastructure and health care signal an understanding that we need to be as cautious as we are ambitious in the years ahead.
Although direct spending due to the COVID-19 pandemic may be over, investments into key health care infrastructure to improve Ontario's capacity were a major theme in the Minister’s speech with massive investments into hospitals, long term care, home care, and mental health. Additionally the province plans to address the health care human resources crisis with new training programs and increased immigration targets.
Recognizing that these uncertain economic times are impacting families, the government highlighted their affordability efforts from last year's elimination of the vehicle registration tax, to this year's extension of the gas tax freeze. The Government also announced that they are moving towards a single transit fare when riders are using two transit systems in the greater golden horseshoe.
The government also provided updates on many of the key election promises that were imperative to their return to power a year ago with an increased majority. Whether it’s record investments in capital infrastructure such as building new hospitals, long term care homes, and schools or increased investment in homecare, Budget 2023 delivers on the investments the Ford government promised in their 2022 re-election campaign. The budget also provides a pathway back to fiscal prudence with a measured approach to return the province back to a surplus as promised in Ford’s 2018 election victory.
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