LILLEY: Ontario budget not fixing Ontario's fundamental flaws

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The bad news is that Ontario’s deficit is about to more than double – the good news is, it could have been much worse.

In a budget designed to respond to the impact of Donald Trump’s tariffs and the economic uncertainty that abounds, there was a real fear the Ford government would engage in rampant, uncontrolled spending.

In the end, the province is expecting to see revenues fall in some areas, costs go up in others, and the deficit to come in at $12.6 billion or $14.6 billion if you include the $2 billion reserve fund they have baked in.

Standing in the legislature, Finance Minister Peter Bethlenfalvy hammered home the threat of the tariffs and the need to build a strong Ontario and Canadian economy.

“We have a vision, we have a mandate, we have a plan, we have the people, and together, we will build a stronger Ontario,” Bethlenfalvy said.

There are some good points to the budget, some vision to build for the future that Ontario needs, but it doesn’t feel like anyone wants to publicly acknowledge the problems we are facing.

In terms of overall spending, the 2025 provincial budget sees total program spending increase from $212.4 billion for the last fiscal year, which ended in March, to a proposed spend of $216.3 billion. That’s an increase of $3.9 billion on programs spending or a 1.8% increase in spending.

That’s far less than would be expected during an apparent crisis and that’s good.

The government increases health spending by 2% from $89.3 billion to $91.1 billion, an increase that doesn’t keep up with inflation, but since coming to office, the Ford government has increased health spending by about 35%.

Education spending is up 6.7% from $38.4 billion to $41.1 billion, another spending increase that is above inflation but will still be called a cut by the opposition.

The post-secondary education sector sees a $1.2 billion cut this year, while the justice system at social services are essentially flat, spending the same amount as last year.

The government is predicting an increase of $1.5 billion in personal income taxes, a slight boost in sales taxes but a nearly $2 billion drop in corporate income taxes. They are also predicting a more than $1 billion drop in income from government businesses including a drop in sales at the LCBO.

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There is lots of talk in the budget document and from the Ford government at the legislature about being resilient in the face of the Trump tariffs, of standing up for and buying Ontario products, and of having the best economy in the G7. It’s great rhetoric but it’s not based in reality because Ontario’s economy – like all of Canada’s – is struggling right now and it goes much deeper than Trump and his tariffs.

I’ll give full credit to Ford for his forward-looking ideas of building the infrastructure Ontario will need in the future from transit to highways, even the seemingly wild idea of putting a tunnel under Hwy. 401. Those are projects that won’t come to fruition until he’s out of office and that means he won’t get credit for it, but we need someone looking decades down the road.

We also need someone looking at the here and now.

The latest Statistics Canada report shows Ontario’s unemployment rate is 7.8%, the second worst in the country and well above the national rate of 6.9%. A year ago, Ontario’s unemployment rate was 6.8% and two years ago it was 4.9%, better than the national average.

Youth unemployment for those aged 15-24 stands at a staggering 15.8%.

Ontario’s GDP per capita sits at $53,000 USD behind West Virginia and only ahead of the State of Mississippi when compared to American jurisdictions.

There are fundamental weaknesses in Ontario’s economy and most of the problems have nothing to do with Donald Trump and his tariffs. These are the issues we need to be fixing; they are issues that the Ford government is not properly addressing in this budget.

blilley@postmedia.com