Analysis | Doug Ford presents a budget written in red ink

By eliminating several sources of revenue, the Ontario premier has become the main architect of his deficit of almost $10 billion for 2024-2025.

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Doug Ford forecasts a deficit of nearly $10 billion for 2024-2025.

• Mathieu Simard (View profile)Mathieu Simard

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For months, the Ford government has been on a diet. He deprives himself of substantial income, in the name of the fight against inflation. The Prime Minister repeats that he wants to help Ontarians who are struggling to make ends meet, buried under increasingly high bills. However, its boost to the population is not without consequences for public finances.

Reduced provincial gas tax: minus $1.2 billion annually in provincial coffers. Elimination of license plate sticker fees: minus $1 billion each year. End of provincial tolls: minus $68 million by 2027. Rebates on electricity bills: an expense that now reaches $7 billion.

All combined, these gifts to citizens would wipe out a good portion of the projected deficit.

But the government defends its choices; many Ontarians are struggling. We need to lend them a hand.

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Still, the deficit of nearly $10 billion seems rather dizzying for a Conservative government, brought to power in 2018 to clean up the province's finances. Did he get lost along the way?

Faced with the astonishment aroused by the size of the deficit, the Minister of Finance nevertheless appears reassuring. The situation is temporary, recalls Peter Bethlenfalvy.

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Finance Minister Peter Bethlenfalvy is applauded by his colleagues in the House during the tabling of his budget on Tuesday .

Obviously, the province is not immune to the vagaries of the global economy. Inflationary pressures have an impact on its budget, but the government still has some control over its revenues. A control that he did not want to exercise.

Is it necessary to save all motorists, including those who drive luxury cars, 5.7 cents per liter? Should it help millionaires light their homes? The question is legitimate.

Another decision with serious consequences for the Ontario government: its controversial Bill 124, which was to limit salary increases for public sector workers.

With the civil servants' victory in court, the government began to compensate them. Retroactive payments which will total $6 billion and which also contribute to the projected deficit for 2024-2025.

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Licensed practical nurses and other hospital employees demonstrated in front of the Legislative Assembly on February 22, 2022 to demand the repeal of the law on the quasi-freeze of salaries in the public sector.

If Bill 124 had never existed, Ontario would probably have spent more in recent years on the compensation of its public servants. It goes without saying. But the government could have foreseen, budgeted, planned these salary increases, rather than having to pay them retroactively, in bulk.

All these decisions lead us to an unprecedented deficit for Doug Ford's government. In fact, we have to go back to 2014 and the Kathleen Wynne Liberals to find a larger deficit (except for the pandemic).

Like it or not, Doug Ford has made his choices: he refuses to tighten his belt and reiterates the importance of infrastructure investments. Economic prosperity cannot wait, to use the words of the Minister of Finance. Construction of new roads, metro lines and telecommunications towers will all move forward.

The government's current plan calls for a return to balance in 2026-2027, just in time for the next election campaign. Now, how can we return to surpluses without new taxes or tax increases? The task will not be simple.

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