BUDGET BULLETIN

ONTARIO LEGISLATIVE HIGHLIGHTS

March 28, 2018


OH, GOODIES

Liberals earmark $20 billion to woo back support


“Balancing the budget is not an end in itself.  It is a means to an end.”

  • Finance Minister Charles Sousa, delivering the 2018-19 Ontario Budget, titled A Plan for Care and Opportunity.

As you may have heard, Ontario has a general election in June. As you may have also heard, polling numbers show dire prospects for Liberal re-election. Put those two elements together, and the result is a provincial Budget crammed with diapers-to-Depends enticements, beckoning voters to rekindle their moribund romance with Premier Kathleen Wynne’s LIBs.

In total, the spending bonanza totals $20.3 billion over three years. Name a demographic – parents, children, students, seniors, the North, First Nations, social assistance recipients, people with developmental disabilities, former Sears employees – and there’s new money on tap.

It’s not quite something for everyone – fiscal conservatives in particular will look no further than the $6.7 billion deficit, followed by six more years of red ink, to give the whole thing the thumbs down. But the Liberals, it seems, have pretty much abandoned hope of getting those votes anyway.

Many of the key components were announced in a pre-Budget blitz over the last week – free pre-school child care, increased hospital budgets, free drugs for seniors, more than $2 billion for mental health services and $300 million for special education. All feature prominently in Sousa’s speech, along with a few new wrinkles, including a drug and dental plan for those without workplace benefits, $750 a year for seniors living independently, and the Ontario Training Bank to streamline skills development.

Early in the speech, Sousa recounts how the province’s books are balanced for the fiscal year that ends this week – in fact, there’s a $600 million surplus. But from there it’s all spending, and Sousa isn’t shy about setting out who this Budget is aimed at. “Women. Students. Seniors. And those who are in precarious work – toiling away in the gig economy,” he intones. “The benefits of a growing economy must be shared by them, too.”

For those sheepish about deficit financing, Sousa offers that debt servicing costs currently consume about eight cents of every dollar of revenue – compared to 15.5 cents per dollar in 2000 – crowing, “that’s the lowest it has been in 25 years.” The aforementioned fiscal conservatives will surely roll their eyes at such rationalizations, but again Sousa makes it clear this Bud’s not for them.

Budget = Ballots

Given the timing, the Budget has to be viewed through an election campaign filter. All Budgets are as much political as they are fiscal, but this one is especially so, essentially doubling as the Liberals’ re-election platform.

Heading into June’s election, the Budget puts the Liberal strategy in sharp relief: Outflank the NDP on the left, appealing almost exclusively to progressives. NDP Leader Andrea Horwath then has to decide whether to adopt a “me too” stance or try to differentiate herself, either by tracking toward the political centre (a strategy that failed miserably in 2014 and enraged the party’s socialist factions) or going even further left, risking alienating moderate voters. Either way, she must have been doing a slow burn reading today’s Budget, which was clearly crafted to woo the very constituency she wants to court.

As for the Tories, this Budget practically dares PC Leader Doug Ford to oppose the feel-good measures. If, as the Liberals have calculated, voters really want these new benefits, Ford faces the challenge of being the one who says no.

In 71 days, we’ll find out whether voters buy what the Liberals are spending.

 In a Nutshell – The Highlights:

Economy / Jobs

  • $6.7 billion deficit for 2018-19, with books not to be balanced until 2024-25 – past the next election cycle.
  • Projected annual economic growth of 1.9% until 2021.
  • $934 million over three years for the Good Jobs and Growth Plan, including expanding trade opportunities and infrastructure improvements.
  • 50% increase in funding for the Northern Ontario Heritage Fund Corporation.
  • $500 million over three years to expand broadband in rural and northern communities.

Families

  • Seniors’ Healthy Home Program, providing up to $750 annually for households led by seniors over age 75.
  • Free prescription medication for seniors 65+ starting in August 2019, by eliminating the annual deductible and co-payments.
  • Ontario Drug and Dental Program, starting in summer 2019, reimbursing 80% of prescription drug and dental expenses for those without workplace or government benefits, up to $400 annually per individual, $600 per couple and $50 for each child in a family.
  • Free licensed child care for children from age 2-and-a-half until they start kindergarten, beginning in 2020, saving families an average of $17,000 per child.
  • $534 million to build 10,000 more pre-school care spaces in schools and 4,000 in other public buildings.
  • Double child care capacity in First Nation communities, creating 4,500 new on-reserve spaces.

Health Care

  • Hospital budgets increased by $822 million (4.6%), plus $19 billion over 10 years for more than 40 major hospital projects.
  • An additional $2.1 billion over four years to improve access to and delivery of mental health and addiction services, part of a total investment of $17 billion – “the largest in Ontario’s history.”
  • $300 million investment in long-term care over three years, plus $23 million to increase the number of personal support workers.
  • $650 million more over three years for home care and community care to increase nursing and therapy visits.

Education

  • $250 million more over three years to tackle the waitlist for assessments and improve special education services.
  • $120 million more over three years to hire more than 450 new guidance counsellors in high schools.
  • $3 billion to renew and modernize college and university campuses.
  • Establish the Ontario Training Bank to bring employers, employees and training institutions together to develop skills programs tailored to the local economy.

Social Services

  • 3% increase in social assistance for each of the next three years.
  • $1.8 billion over three years to expand services for people with developmental disabilities.
  • Make an amendment to increase the guaranteed monthly payment of the Pension Benefit Guarantee by 50% (to $1,500) retroactive to May 19, 2017 – so that former Sears Canada employees get this support.
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