Fri. Apr 12th, 2024

Despite a huge deficit, the Ford government extends the 5.7 cents/liter gas rebate and will buy four helicopters for the police.

 Ontario: The deficit triples to 9.8 billion for 2024-2025

Ontario's 2024 Budget, presented by Finance Minister Peter Bethlenfalvy (left) and Premier Doug Ford, plans a return to budgetary balance only in 2026-2027.

  • Michel Bolduc (View profile)Michel Bolduc

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Ontario was expected to come out of the red next year. In its annual budget tabled Tuesday, Doug Ford's government puts the deficit for the financial year that is ending at $3 billion and forecasts a shortfall of $9.8 billion for 2024-2025.

< p class="StyledBodyHtmlParagraph-sc-48221190-4 hnvfyV">Excluding the pandemic, this is the highest projected deficit in ten years. At the time, the Liberals were in power and the Conservatives accused them of spending lavishly.

Despite an economic downturn on the horizon, the Ford government is staying the course with its 10-year plan to invest tens of billions in infrastructure and public transit.

The government is even creating a new $1 billion program for cities and housing, in addition to extending the reduction in the gas tax at an annual cost of $1.2 billion.

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A return to balanced budget is only planned for 2026-2027.

We have a plan to get out of the red. It is delayed because of the economic context. […] Quebec has a deficit of 11 billion.

A quote from Peter Bethlenfalvy, Ontario Minister of Finance

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Ontario must only return to a balanced budget in 2026-2027.

The leader of the official opposition, New Democrat Marit Stiles, says the $214.5 billion budget is full of “half measures.”

This is a fiscally irresponsible budget.

A quote from Marit Stiles, leader of the NDP

< p class="StyledBodyHtmlParagraph-sc-48221190-4 hnvfyV">Families are being “left behind,” the liberals add. Never have we spent so much to accomplish so little.

[Doug Ford] deliberately refuses to fund health, education and other public services on which we depend, says Liberal Leader Bonnie Crombie in a press release.

Last week, Premier Doug Ford said Ontario was an economic powerhouse.

In the budget, however, the government revises its growth projections downward.

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Ontario's economy will grow less quickly than expected, admits Ford government.

Projected growth for Ontario's real GDP, for example, falls from 1.3% to 0.3% for 2024 and from 2.5% to 1.9% for 2025.

In addition, the province anticipates a drop in sales tax revenue next year compared to this year.

2022-2023 (actual figures) 2023-2024 (provisional figures)< /th>

2024-2025 (projection ) 2025-2026 (projection) 2026-2027 (projection)
Personal income tax 44.2 50 .6 51.9 55.1 58.3
Corporate tax 27.8 24,2 24.9 26, 3 28
Sales tax 36,1 39.8 38.8 40.6 42.7

Source: Ontario Budget, 2024

Geneviève Tellier, professor of political science at the University of Ottawa, describes the deficit forecast for 2024-2025 as considerable, which is all the more surprising from a Conservative government.

< p class="StyledBodyHtmlParagraph-sc-48221190-4 hnvfyV">If there is a deficit, it is by force of circumstances, she says. The economy is not doing as well as we thought in Ontario and income is not there. That explains why the deficit is almost $10 billion.

This is not a budget that says to Ontarians: ' x27;The government is here for you.'' It's really an economic development project that involves infrastructure.

A quote from Geneviève Tellier, political scientist, University of Ottawa

Another reason explaining the increase in Ontario's deficit is the defeat in court of the Ford government in the case of the three-year quasi-salary freeze imposed by the province in 2019 on public sector employees (Bill 124). The Ontario Court of Appeal ruled the law unconstitutional earlier this year.

Union members received catch-up money. The 2024 budget provides for adjustments totaling 6 billion.

Colleges and universities were calling for provincial assistance to cope with the cap imposed by Ottawa on foreign students.

However, there is no rescue plan in the budget for these institutions, apart from $10 million in aid for small, rural and northern colleges and universities.

In fact, spending on postsecondary education is down $116 million this year compared to the third quarter forecast. concrete, there is nothing for you in the budget, says political scientist Geneviève Tellier.

Teachers unions accuse the Ford government of underfunding schools. The Ontario Secondary School Teachers' Federation (OSSTF) points out that the 2.7% increase in education spending is below inflation and does not take into account the increase in the number of #x27;students.

They say it's an increase, but it's a cut, according to OSSTF.

The Ford government increases its forecasts for housing starts compared to projections in the last budget.

The province is now forecasting 87,900 housing starts in 2024, almost 9,000 more than expected. This number is expected to rise to 94,400 in 2026, according to the budget.

In theory, Ontario should build 125,000 to 175,000 new homes per year, in order to reach its goal of having 1.5 million new homes by 2031. However, the government counts new beds in long-term care centers as housing, stating that it is a home for the seniors who live there.

Motorists emerge winners again this year in the Ford government's budget.

In addition to maintaining free registration stickers and extending the gas rebate, the province is promising more affordable options for auto insurance.

Motorists will be able to waive a portion of their coverage if their work insurance, for example, already covers them in this chapter, indicates the government.

On the other hand, coverage for compensation linked to medical expenses in the event of an accident, in particular, will continue to be compulsory.

The budget does not specify what the average savings for drivers will be.

Observers anticipate a forest fire season this summer even worse than last year.

However, the government is budgeting 135 million in 2024-2025 for fighting wildfires, compared to 216 million this year.

  • Michel Bolduc (View profile)Michel BolducFollow

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