Deficit down, spending up for Ford government

Published Nov 06, 2019 • 3 minute read

Ontario's Finance Minister Rod Phillips (right) is accompanied by Ontario Premier Doug Ford as he walks to Ontario's legislative chamber to deliver the fall Economic Statement on Nov. 6, 2019. (The Canadian Press)

The Doug Ford government has lowered its projected deficit for this fiscal year despite ramping up in-year spending by $1.3 billion.

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The 2019 budget in the spring projected a $10.3 billion deficit for 2019/20, but has reduced that figure to $9 billion, including a contingency fund.

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The government has not moved up its date to balance the books which had been set at 2023/24, after the next provincial election.

“Our plan to build Ontario together makes a conscious choice to balance the budget in 2023 so that we can provide the immediate financial relief that families and individuals need, so that we can also make needed investments in critical public services like health care and education,” Finance Minister Rod Phillips said Wednesday on the release of the 2019 Ontario Economic Outlook and Fiscal Review.

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The economic statement confirms the province’s net debt will hit $353.7 billion by the end of this year, the highest in the province’s history and the largest subnational debt in the world.

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The fall economic statement largely reiterated initiatives previously announced by the government.

However, legislation the government is introducing, and outlined in the fall economic statement, would create the preliminary legal groundwork for alcohol sales in corner stores.

A new small business tax break would provide a savings of up to $1,500 annually to more than 275,000 companies.

Julie Kwiecinski, of the Ontario Canadian Federation of Independent Business (CFIB), said the small business tax cut fulfills a government election promise.

“Businesses have affordability issues too whether it’s the hydro rates that just went up by inflation or, a huge pressing issue right now, the tight labour market,” she said.

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An aviation tax fuel cut for Northern Ontario would make it more affordable for citizens in remote areas to travel, the government says.

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The four biggest ticket items this year are health care at $64 billion, education at $30 billion, social services at $17 billion and debt interest at $13 billion.

The Ford government noted that Ontarians sent $12.9 billion more in tax dollars to Ottawa than what the province gets back to pay for services like health care.

Ford has joined his fellow premiers in calling for an annual increase in the Canada Health Transfer of 5.2%.

NDP Leader Andrea Horwath said the fall economic update just slows down the cuts the government announced in its last budget, it doesn’t stop them.

“Cuts aren’t ending,” she said.

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Key Changes since 2019 budget

Down: Reduction in small business corporate income tax rate to 3.2% from 3.5% on Jan. 1

Down: Drop in aviation fuel tax rate in Northern Ontario to 2.7 cents per litre, from 6.7 cents per litre

Up: $1.6B more in total revenues than projected in 2019 budget

Up: $936M in corporate tax revenues

Up: $525M in personal income tax revenues

Up: $90M in land transfer tax revenues

Up: $1.3B more in total spending than projected in 2019 budget

Up: $227M more for doctor care, end of prescription co-payment for long-term care residents

Up: $68M for hospital capacity

Up: $41M for public health units

Up: $26M for land ambulance

Up: $122M for municipal child-care programs

Up: $64M for elementary and secondary schools

Up: $310M for social assistance and child welfare programs

Up: $279M for autism supports

Up: $43M in youth justice services

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