Ontario deficit rising by $5 billion; new major GTA highways and ‘staycation’ tax credit pledged
Published Thursday, November 4, 2021 1:01PM EDT
Last Updated Saturday, November 6, 2021 5:19PM EDT
The Ford government is ramping up spending ahead of the June 2022 general election, with the deficit actually projected to rise by $5 billion this year, with spending planned for health-care, two new GTA highways and a tax credit for people to vacation in Ontario.
But if you were hoping for any cut to the high cost of gasoline in the province, something Premier Doug Ford suggested he might do when asked earlier this week, you’ll have to keep waiting.
The Fall Economic Statement tabled on Thursday includes a 2021-2022 deficit of $21.5 billion, up $5.1 billion from the end of the 2020-2021 fiscal year.
The 2021-22 deficit figure is more than $11 billion below what was projected in the 2021 budget.
Thursday's statement also projects deficits of $19.6 billion in 2022-23 and $12.9 billion in 2023-24.
Overall, spending is increasing by about $3 billion more than what was in the 2021-22 budget, in part due to spending on a raft of new measures in health-care, home-care, retirement homes, and initial work to build Highway 413 and the Bradford Bypass.
The Highway 413 project would link the Highway 401 and 407 junction to Highway 400, while the Bradford Bypass would offer an east-west link between Highway 400 and Highway 404.
While neither project has passed the design stage, the Fall Economic Statement earmarks up $1.6 billion for the projects within a larger fund dedicated to the upkeep of all highways.
Officials would not quantify how much money of the $1.6 billion is going to either project, saying they have not yet been put out to tender.
Finance Minister Peter Bethlenfalvy told reporters they needed to start building the two highways to address gridlock in the GTA.
“You can’t cycle and walk in parts of the 905 so we have to keep building highways,” he said.
The Highway 413 project has been a political football, with the previous Wynne government cancelling it.
Liberal Leader Steven Del Duca, who was transport minister under Wynne, said the government is downplaying how costly the highway will be and overstating its benefits.
“There is no timeline and there is no costing and there is no clarity on whether or not this highway will be tolled,” he said. “This project will take at least 10 years to complete and may cost up to $10 billion.”
Catherine Fife, finance critic for the NDP, said the highways were purely to win votes in the GTA.
“This government is making some very poor choices that are focused solely on their own political ambition.”
Also earmarked is $270 million for a first of its kind “Ontario Staycation Tax Credit.”
Under this program, people who take a trip anywhere in Ontario in 2022 will be able to claim up to 20 per cent of the cost of a trip, up to $1,000 for an individual or $2,000 for a family.
They are also extending a tax credit aimed at keeping seniors in their homes with retrofits, as well as a COVID-designed credit for job retraining for 2022, at a combined cost of $80 million.
Spending in health-care is rising by $541 million over the next three years to increase the availability of nurses and personal support workers for home-care.
The province is also spending $922 million to continue wage increases for personal support workers through 2022.
Fare-starved municipal transit agencies are also getting $345 million in help.
There is also $10 million extra to help First Nations conduct surveys for unmarked graves around former residential schools and obtain death registration records for free for the next three years.
Opposition parties criticized the government for not including any real help to address rising living costs in Ontario, fuelled by once-in-a generation level hikes in inflation.
“There is so much that’s not in this fall economic statement considering what then needs of Ontarians are - just shows how out of touch this government is,” NDP leader Andrea Horwath said.
Bethlenfalvy replied that the government has “done a lot to address affordability,” pointing to the minimum wage increase to $15 taking effect in January 2022.
He declined to comment when asked if the government would announce a gas tax cut or an income tax cut, both things they promised while campaigning in 2018.
“Today’s not the day I will be talking about personal income tax,” he said.
He characterized the Fall Economic Statement as a signal that the government’s focus was moving away from COVID-19 measures and more to stimulating the economy.
“We’re starting to come out of the pandemic and we’re not going to give up some of the hard fought gains - but we’re very clearly signalling that economic recovery is at hand.”
Even so, there is $4.6 billion set aside in reserve and specific COVID-19 contingency funds should the situation worsen again.
In education and childcare, school boards are getting millions more to support COVID-19 measures and learning catch-up in schools, but overall base funding for education appears to be going down from what was pledged in the 2021 budget.
An additional $760 million in “COVID time-limited” funding was added for education, bringing the government’s total spending to $31.56 billion.
The Canadian Federation of Independent Business (CFIB) responded to the latest statement saying the government should have continued to offer grants to small businesses impacted by lockdowns.
"We are disappointed that the government chose not to provide further financial support to Ontario small businesses," Ryan Mallough said. "The last broad grant program ended April 7, the day before the third government-mandated lockdown that lasted up to 200 days for some sectors."
The Fall Economic Statement document also hints at why the Ford government is not yet ready to cut gas taxes as the premier pledged this week.
Gas tax revenue has been hammered due to the pandemic, with many workers not commuting at all.
Gas tax revenues are down $629 million from what was projected in March 2021.
The opposition also asked Ford government ministers throughout the day what the status of negotiations with the federal government over a new childcare funding deal that could eventually lead to $10 per day childcare.
Officials said the province continues to negotiate with the federal government on childcare and that an agreement has not yet been reached.