The Government Relations firm Enterprise Canada has provided a detailed analysis of yesterday’s provincial Budget. Following is an overview of the key highlights.
Against the still uncertain backdrop of the COVID-19 pandemic, Finance Minister Rod Phillips today delivered Ontario’s Action Plan: Protect, Support, Recover. As in the spring, the government has had to scale back its ambitions for a true multi-year fiscal plan in favor of a tailored ‘mini-budget’ strategy focused on crisis response.
While it remains less than a full budget, it is more comprehensive and detailed than the emergency update released in the spring and builds specific COVID-19 economic recovery initiatives into the government’s fiscal plan.
Phillips confirmed that the government’s projected deficit remains $38.5 billion for the current fiscal year. The deficit is projected to shrink to $33.1 billion in 2021-22 and to $28.2 billion in 2022-23.
Phillips further revealed that the projected deficits include a dedicated “pandemic contingency fund” to provide the government with fiscal flexibility to respond to future unforeseen events. The contingency fund will begin at $4 billion next year, before dropping to $2 billion in each of the following years.
Ontario’s total COVID-19 Response has grown to $45 billion, which includes funding provided by the federal government under the Safe Restart framework.
New investments in the budget are built around three core pillars:
• Protect: Allocating $15.2 billion to protect people from the COVID-19 virus.
• Support: Providing $13.5 billion to support families, workers and employers at greatest risk during the second wave.
• Recover: Investing $4.8 billion to remove barriers to growth, create jobs and recover.
Specific initiatives include:
• An additional package of $571 million to Ontario hospitals.
• $540 million in targeted investments for long-term care homes.
• $181 million to support new employment services and training programs for workers in the hardest hit sectors.
• A $100 million Community Building Fund designed to help tourism, cultural and sports organizations that are in financial duress due to the pandemic.
• A 20 per cent tax credit for Ontario residents who spend on eligible Ontario-based tourism expenses, once public health officials say it is safe to travel.
• Making permanent the expansion of alcohol retail as part of food takeout and delivery orders.
• $680 million to continue the expansion of broadband Internet to rural areas.
• A one-time payment to parents of $200 per child under the age of 12 with an additional $250 per dependent under the age of 21 with special needs.
• A 25% tax credit for home renovations that improve safety or accessibility for seniors.
• Moving the cost of the previous government’s hydro contracts off of the rates of industrial and commercial employers, reducing hydro bills by 14% and 16% respectively.
More analysis can be found here.