Ontario tabled a budget Thursday that focused heavily on infrastructure spending but instead of new taxes or service cuts the document outlined a plan to sell key Crown assets in order to help pay for their path.
The budget, which includes $131.9 billion in expenditures, held few new funding surprises, no projected cuts and no new major tax announcements.
For highlights of the budget, click here.
Ontario’s Finance Minister Charles Sousa called the budget a “thoughtful” approach that aims to avoid the “slash and burn” path to a balanced budget.
The government’s goal is to balance the budget by 2017/18. Today, the deficit stands at $10.9 billion but that figure is supposed to drop to $8.5 billion by the end of this fiscal year and then drop again by nearly half next year.
Selling off 60 per cent of shares to Hydro One plus key real estate assets such as the head offices of LCBO and OPG are expect to net the government $5.7 billion which will immediately be put back into the coffers to help fund their infrastructure spending spree.
The government also says the economy will be boosted (2.7 per cent this year alone) by a low Canadian dollar, a rebounding economy south of the border and lower oil prices.
But Sousa said the government is being cautious about projected savings.
"It’s a balanced path to a balanced budget," he told reporters Thursday afternoon, before tabling the budget in legislature. "It's about controlling our spending and being very pragmatic in the things we do.”
When asked why he didn’t raise taxes to help generate revenue, Sousa pointed to changes the government has made to the beer industry and is making to tax credits given to Ontario’s film and TV industry.
As previously announced, a case of 24 beers is expected to go up by 25 cents a year for the next four years. On Thursday, the government announced it would be reducing some tax credits and eliminating others alltogether for the film and TV industry.
“Part of growth of revenue is growth of economy and we’ll want to do that as well,” the minister said. “We recognize what we want to go after and ensure we are maximizing our existing tax base. We want to look at leveling the playing field while making sure everyone pays their fair share.”
The Progressive Conservatives and NDP were both quick to dismiss the budget as a “shell game.”
Vic Fedeli, the PC’s finance critic, said the government’s lack of new funding commitments and their plan to sell off assets suggests the Liberals lack a business plan.
“They’re taking what they previously announced and using it to lower the deficit,” he said.
"This is a shell game the government is playing but it’s time they stop using credit card and start using their debit card. There is no new money here.”
NDP Leader Andrea Horwath criticized the government’s plan to sell off Hydro One, saying it poses a threat to Ontarians who are struggling financially.
"The sale of Hydro One is the wrong thing to do. It’s bad for Ontarians. It means higher rates for families that are already paying the most in the country,” she said. “Ontarians did not vote for a platform for cuts and privatization.”
The PCs and NDP are not expected to support the budget but the Liberals have a majority government, making it unlikely the budget won’t pass.
