Ontario 2024 Spring Budget

by Maj (ret'd) CORNELIU. CHISU, CD, PMSC, FEC, CET, P. Eng. Former Member of Parliament Pickering-Scarborough East The 2024 Springbudget, titled “Building a Better Ontario” and released on March 26, 2024, builds on provincial promises made over the last year. It places a focus on infrastructure and healthcare spending while ensuring that taxpayers do not have to reach into their pocketbooksjust yet. Budget day is important for the government, but more so for the citizens that the government’s choices will affect. Cushioned in a lot of appropriate verbiage that we arenow usedto from the Ford government and Minister of Finance Peter Bethlenfalvy, the budgetlooks promising on the surface. "These investments and more are a signal to Ontarians of our commitment to keep building Ontario while retaining a prudent, targeted and a responsible approach to public finances," Bethlenfalvy said at a news conference. "We're not backing down from investing in what matters most and we are not going to increase costs on our people." Total budget spending has surpassed last year’s, making it the largest in the province’s history at about $214.5 billion. Close to $194.5 billion of that is for programming. With spending up for various projects, this is a real wish list of good intentions,however without any concrete anchor in reality. It is concerning that as a resultof this budget, forecasts for Ontario's deficit will more than triple from $3 billion last year to $9.8 billion in 2024-2025. This is the highest non-COVID budget deficit since former premier Kathleen Wynne's 2014 spending plan.The government justified the deficit increase as caused by slowing economic growth projections leading to lower tax revenues. Here we go again, experiencing the kind of overblown budget the architects of the current budget criticized so vehemently when it was a liberal budget. What remarkable memories eh? Last year's budget predicted Ontario would be back in the black with a modest surplus of $200 million by 2024-2025. Now, the expected return to balance has been pushed to 2026-2027 — the year of the next election — with a projected $500 million surplus.Do you believe in Santa Claus? So let’s take a look at the promises made in the budget. In total, the province is forecasting $205.7 billion in revenue in the coming fiscal year, and $214.5 billion in spending, up from $207.3 billion spent last year. Base spending on health care, the largest slice of the budget pie, will increase from $74.6 billion to $75.6 billion. This represents a below-inflation increase of only 1.3 per cent, amid an ongoing family doctor shortage and a growing population. To address the shortage of family doctors, the province will establish a medical school primarily focused on family medicine at York University in Toronto. With Ontario also suffering major nursing shortages, the government promises to invest an additional $128 million over three years to boost nursing student enrolment at universities and colleges. Key health spending initiatives include $564 million over three years to connect approximately 600,000 people to primary health care teams and a $155 million construction subsidy to fast-track the construction of long-term care homes. New money in the budget includes an additional $2 billion over three years for home and community care, a $200-million community sport and recreation infrastructure fund and more money for autism therapies. The government is also planning a big increase in spending to improve high-speed internet access across Ontario, with $1.3 billion allocated this year, up from $300 million in each of the previous few years. To help Ontarians cover increased costs, the province will extend the tax cut that reduces the gas tax by 5.7 cents per litre and diesel fuel tax by 5.3 cents per litre, until December. The cut, scheduled to expire on June 30, has saved households an annual average of $320 since it was introduced, the province estimates. More Ontarians will be eligible for subsidies that reduce their electricity bills, a move that will push the cost of that program above $7 billion. To support the province's housing plans, the government is investing more than $1.8 billion in two funds that will help municipalities build "housing-enabling" infrastructure, including roads, bridges, drinking water, waste-water and storm-water infrastructure. The province will also allow all single and upper-tier municipalities to impose a tax on vacant homes. Currently, only Toronto, Ottawa and Hamilton have that authority. A new policy framework will also encourage municipalities to set a higher tax rate on foreign-owned vacant homes. Municipalities will be allowed to lower their property tax rates on new purpose-built rental housing to encourage construction of those types of units. These moves are intended to speed up the construction of homes to meet the goal of building 1.5 million new homes by 2031.However, figures in the budget show the province is way behind schedule.There were 89,300 housing starts in Ontario in 2023, with 87,900 projected for 2024, 92,000 for 2025 and 94,400 for 2026, when at least 150,000 per year are needed to achieve the province's goal. The budget advances existing spending plans for highways and roads, without new cost breakdowns for the government’s flagship projects like Highway 413 or the Bradford Bypass. About $37.6 billion will be spent on the education sector and $40 billion will be put into “other programs” …and let’s not forget that Interest on debt takes up about $13.9 billion of provincial spending. This quick overview of the budget clearly indicates that the Ontario government needs to provide better information to the public on service improvements and when capital construction projects will be completed. This year’s budget leaves many questions unanswered,consistingas it does, of general statements on improvements needed and broad comments on what is being planned. On a detailed level, it is impossible to decipher how taxpayer money is being spent relative to prior years. It does not say what that planned spending will accomplish in the short, medium and long term, nor whether that will meet the public’s needs. The budget indicates that “Ontario’s Plan to Build” includes the most ambitious capital plan in the province’s history, with $190.2 billion over the next decade to support growing business, families and newcomers. However, additional information on expected in-service dates and projected costs for each major project over a certain threshold would provide more useful information. How will the government address identified public service gaps, program waiting lists, health service wait times, school class sizes, deferred capital maintenance expenditures, etc.? Rather than practical solutions, this budget has focused on the discussion of revenues, expenses, capital investments, economic indicators and general plans presented in charts and narrative form. This must change to put the emphasis on how precious taxpayer dollars are spent, and what results will be achieved, for which the government will take responsibility. This element is completely missing from the current budget. So now, let us see if we can expect something better from the upcoming federal budget. Keep your fingers crossed!