Ontario tables balanced budget for first time in a decade
The Ontario Liberals’ have tabled their final budget before next June’s election, and for the first time in nine years it’s a balanced budget. In his budget speech at Queens’ Park, Finance Minister Charles Sousa announced that not only will the province’s budget be balanced this year, it will continue to not slip into deficit for 2018 and 2019 as well.
The province has been in deficit for the last decade or so because of the slow drain of manufacturing and service sector jobs as a result of the 2008 financial crisis. But a robust housing sector has changed the province’s financial tide, swelling government coffers through billions in tax revenue.
For the fiscal year ending March 31st, Ontario saw a $1.9 billion deficit, down from the hefty $4.3 billion that was projected in the 2016 budget. The province’s GDP grew 2.7 per cent in 2016, a full half percentage point more than forecast in last year’s budget.
Last year, the province unveiled a costly hydro rebate program, after coming under fire for privatizing Toronto Hydro, a fiasco that led to soaring electricity prices and plunging ratings for Premier Kathleen Wynne. This budget is indeed a political one, a last-ditch attempt for Wynne and company to salvage the Liberals’ abysmal popularity among Ontarians.
Over $7 billion will be pumped into Ontario’s healthcare sector, notorious for long wait times especially in emergency room departments across the province. The funding will be allocated over three years and will increase the operating budgets for hospitals.
In a surprise move, the government announced that every Ontario resident under 24, will now be eligible for free prescription drugs, under an expanded pharmacare program. Right now, if you’re not covered under an employment drug plan, you have to pay out of pocket in the event you’re prescribed drugs that are not available over the counter. Birth control pills, for instance, are not available over the counter in Ontario and have to be prescribed by a family physician. There’s potential for some savings here.
If you’re a smoker however, you’re going to have dish up more cash for cigarettes, as tobacco taxes will jump by $10 per carton over the next three years, starting with an immediate $2 hike per cigarette carton.
Finance Minister Charles Sousa has allocated a whopping $200 million to create 24,000 new child care spaces across the province, 16,000 of which will heavily subsidized. In Toronto at least, families can pay up to $2000 per child, per month for child care, a number that takes a huge financial toll on families earning below the city’s median income of $75,270. By contrast, families in Quebec spend roughly $200 per child on child care, because of heavy government subsidies.
The provincial government’s five-year plan seeks to double the number of spaces for children under 4, so that 40 percent of infants, toddlers and preschoolers have access to licensed child care. The lack of child care centers has long been one of the biggest irritants for families across the province, but especially in Toronto’s condo-heavy downtown core which is experiencing a baby boom of sorts. Ontario will spend up to $3 billion over the next five years to create these new spaces by 2021.
Jobs & Student loans
Sousa also claimed that nearly 700,000 net new jobs have been created since the recession, most of them well-paid, private sector jobs. Data from Statistics Canada however, shows that while the private sector has indeed been the primary generator of jobs, many of these jobs have been part-time. As of March 2017, almost 25 percent or 1.3 million of all private and public sector jobs in Ontario were part time.
To mitigate the growing risks of the sharing economy that is contributing heavily to the rise in part-time jobs, the government announced a plan to pump a hefty 190 million into a program that will help expand co-op and interning opportunities for students, during their 4-year undergraduate degree or 3-year diploma.
In another move seemingly to gain the millennial vote, you won’t have to repay your OSAP (Ontario Student Assistance Program) loan until you secure a job that gives you at least $35,000 in annual income. Previously, students were compelled to start paying back their OSAP loans six months upon graduation, unless they immediately went on to pursue a second degree.
Even more money has been allocated in today’s budget to appease angry voters whose electricity rates have more than doubled since Wynne came into power. Approximately $1.4 billion will be funnelled into additional hydro subsidies, directed at homeowners who still continue to face rising electricity costs. Previously, Wynne’s government had announced a 25 percent reduction in hydro bills starting this summer. From now on, Sousa promised, electricity rates will only increase at the rate of inflation, nothing more.