Fall Economic Statement 2021: Build Ontario
Today the Ontario Government released their 2021 Ontario Economic and Fiscal Review, entitled Build Ontario. The Fall Economic Statement outlaid the provinces expenditures to date in battling the COVID-19 pandemic, while for the first time laying out the Government’s comprehensive plan for economic recovery. This is without a doubt a clear strategic signal of the Government’s priorities heading into next year’s election.
The overriding theme of this fall’s mini-budget? A plan to build Ontario.
“This is our plan for jobs. Our plan for opportunities. Our plan to Build Ontario,” said Minister of Finance Peter Bethlenfalvy in his speech to the Fall Economic Outlook. “It’s a plan that dreams big. But then lays out a clear path to take us there.”
The Fall Economic Statement is divided into three major priorities:
- Protecting our Progress
- Building Ontario
- Working for Workers
Ontario's Fiscal Situation
Despite eye-popping projections for deficit spending in this spring’s Budget tabled by Minister Bethlenfalvy, today’s Fall Economic Statement is projecting a deficit of $21.5 billion, which is $11.6 billion lower than the outlook published earlier this year. The Minister insists that this reduction in deficit is not tied to a decrease in spending, but rather a sharp increase in Ontario’s strong economic growth as we rebound from the lows of the pandemic.
Over the medium term, the government projects steadily declining deficits of $19.6 billion in 2022–23 and $12.9 billion in 2023–24, an improvement of $8.1 billion and $7.2 billion, respectively, relative to the outlook presented in the 2021 Budget.
Protecting our Progress
As the Government begins to turn the corner nearing the end of the COVID-19 pandemic, the priorities announced today are symbolic of that. While the Government has still acknowledged the monies spent on the pandemic today, the Fall Economic Statement outlines a litany of spending proposals to protect our health care system more so for the long term, rather than the reactionary nature we’ve been accustomed to over the past 20 months.
The government is providing hospitals with over $1.8 billion in 2021–22 to support 3,100 new and additional beds, reduce surgical and diagnostic imaging backlogs and to help hospitals keep pace with patient needs and increase access to high‐quality care. Meanwhile the Government announced it is investing $342 million, beginning in 2021–22, to add over 5,000 new and upskilled registered nurses and registered practical nurses as well as 8,000 personal support workers. The Government also announced that it will be investing an additional $548.5 million over three years to expand home and community care. This funding would support up to 28,000 post-acute surgical patients and 21,000 patients with complex health conditions every year.
The Fall Economic Statement also provided announcements on the Government’s recent pledge to invest an additional $3.7 billion, beginning in 2024–25, to build an additional 10,000 net new long-term care beds and upgrade 12,000 existing beds. The Government also reaffirmed its recent commitment to invest an additional $72.3 million over three years to increase enforcement capacity including doubling the number of inspectors across the province by 2022–23.
The Government continues to pledge more than $1.6 billion in resources to protect schools against COVID‑19. Most importantly, Ontario has allocated over $600 million to improve ventilation and filtration in schools, including installing over 70,000 standalone high-efficiency particulate air (HEPA) filters and other ventilation devices.
While the Government today outlined a long list of spending commitments for economic recovery built off key infrastructure investments, the marquee announcement continues to be the Government’s plan to invest $2.6 billion in funding for 2021–22 in support of the Ontario Highways Program, prioritizing investments in the new planned Highway 413 and the Bradford Bypass.
The Government’s Fall Economic Statement also highlights their plan to tap into the potential of the Ring of Fire in Northern Ontario - with a commitment to both reopen and amend the Far North Act while also committing over $1 billion to build the necessary road network to make regions economic potential.
As part of the Government’s plan to build Ontario, the Government is investing $30.2 billion over the next 10 years to build, expand and enhance hospitals, while also making progress in its $28.5 billion infrastructure plan with the all-new Ontario Line, the three-stop Scarborough Subway Extension, the Yonge North Subway Extension connecting to York Region, and the Eglinton Crosstown West Extension.
Working for Workers
The Fall Economic Statement’s third priority, Working for Workers, were mostly re-announcements of many of the significant policies the Government had teased out in the weeks leading up to today. The Government confirmed it’s plan to increase the general minimum wage to $15 per hour effective January 1, 2022. This also includes eliminating the special minimum wage rate for liquor servers bringing them in line with general minimum wage. The minimum wage rates for students, homeworkers, hunting and fishing guides and wilderness guides would be increased proportionately to the increase in the general minimum wage (4.5%)
The Government also announced that it has secured investment commitments of $5.6 billion from major auto manufacturers for electric vehicle supply chain capacity. The Government is also creating a new provincewide two-year $40 million Advanced Manufacturing and Innovation Competitiveness stream, which is part of the Regional Development Program.
The Fall Economic Statement included further details about the much anticipated Ontario Staycation Tax Credit for 2022. To help the tourism and hospitality sectors recover and encourage Ontario families to explore the province, the tax credit will provide an estimated $270 million to support over one and a half million families to further discover Ontario.
In further support for Ontario workers, the Government announced its plan to strengthen Ontario’s agri-food supply chain, by investing up to $25 million over three years in a new Strategic Agri-Food Processing fund to support projects that will enhance processing capacity and food security.
Today’s Fall Economic Statement was the Ford Government’s seventh fiscal update since the beginning of the COVID-19 pandemic, a span of only 20 months to date. While there is no question the first six fiscal updates were in direct response to the Government’s handling of the pandemic, today’s fiscal outlook was a clear indication of the Government’s plan for the future as they look towards next year’s election.
Ontarians need to look no further than the title of the document itself, Build Ontario, to see the similarities in messaging and priorities with the Ontario PC Party’s recent ad blitz which focuses on the Tories as being the only party saying “yes” to building Ontario. That was a consistent theme throughout Minister Bethlenfalvy’s speech in the Legislature today, and no doubt a theme we will hear consistently from now until June of next year.
Most notable of today’s fiscal outlook was the ongoing shift the governing Tories have signalled over the past weeks of protecting and standing up for workers. The typically pro-business government shocked many this past week when flanked by the two of Ontario’s largest union leaders, the Government announced an increase to Ontario’s minimum wage despite cutting the planned increase just a few years ago. There is no doubt this will be a continued focus of the Government over the next six months as they kick into election mode. The Government’s shift to focusing on these issues facing blue collar workers should no doubt raise concerns for the opposition parties, as many of these voters were seen as a key element of Doug Ford’s winning voter coalition en route to his 2018 majority victory.
2022 Budget Consultations
With today’s tabling of the 2021 Ontario Economic and Fiscal Review, the Ministry of Finance has officially opened up it’s consultation period for the 2022 Ontario Budget. Upstream looks forward to working with you in putting together your pre-budget submission and assisting you with the budget consultation process. If you haven’t already been in touch with Upstream regarding your pre-budget strategy, you can click here to set-up a consultation.