The Top Line
This afternoon Ontario Finance Minister Peter Bethlenfalvy introduced his Fall Economic Statement – an economic update on the state of the province’s finances between budgets. This statement, entitled “Building Ontario For You” focuses on the improving economy as the province’s financial picture continues to rebound from the recent pandemic. It also clearly sets the table for an early election in 2025, should the Premier decide to go that route.
While the update was mostly a traditional fiscal and economic overview, it included targeted measures focused on consumers, small businesses, and infrastructure.
Minister Bethlenfalvy summarized several consumer-friendly provisions and key measures that had been previously announced and designed to win favour from the voters.
Highlighting the Statement is the government’s decision to send out a $200 “rebate” cheque to 15 million Ontarians early in 2025. The government says they are giving the taxpayers back their own money that has been unduly taken from them by government and will provide relief to those struggling. There is an implication that this is to offset the Federal Carbon Tax – a tax strongly opposed by Conservatives everywhere.
Also previously announced and included in today’s Statement are “learn and stay” tuition grants for 1,360 medical students and annual $5,000 tax credits for those doing in vitro fertilization (IVF) cycles in hospitals and community clinics. Additionally, the government will give another extension to the 5.7 cents per litre cut to the provincial gas tax until next summer. The government also continued it’s push to save people time and money while expanding road and transit projects; dealing with growing gridlock, including new restrictive bike lane regulations; cutting Red Tape and continuing to create jobs. Finally, the government is on target to balance the budget in 2026–27.
Fiscal Snapshot
In today’s Statement, the Ford government announced that Ontario’s economy continued to grow in the first half of 2024 with a 2024–25 total revenue outlook of $212.6 billion and a projected deficit of $6.6 billion — a deficit improvement of $3.2 billion from the 2024 Budget projection announced on March 26, 2024.
The government projects a deficit of $1.5 billion in 2025–26, followed by a surplus of $0.9 billion in 2026–27. Also in the Statement released today, Ontario’s net debt-to-GDP ratio for 2024–25 is projected to be 37.8 per cent. Over the medium term, the net debt-to-GDP ratio is forecast to be 37.9 per cent in 2025–26 and 37.5 per cent in 2026–27.
Ontario’s net debt-to-GDP ratio fell to a 12-year low last year, and Ontario’s plan keeps this ratio at the lowest level in more than a decade with Ontario having to pay $12.7 billion in interest costs in 2024–25. The government still has a huge debt, although about $1.2 billion lower than the 2024 Budget forecast.
The 2024–25 total expense outlook is $218.3 billion, $3.8 billion higher than the 2024 Budget. Program expense is projected to be $205.5 billion, $5.0 billion higher than the forecast in the 2024 Budget, primarily due to the announced taxpayer rebate to individuals and families, and a top-up of the Contingency Fund to provide flexibility to protect important public services.
Interest rates remain at high levels and are projected to continue weighing on economic growth in the near term. Ontario’s real GDP growth is projected to ease from 1.4 per cent in 2023 to 0.9 per cent in 2024. As interest rates continue to decline, real GDP growth is projected to increase to 1.7 per cent in 2025 and to 2.3 per cent in both 2026 and 2027.
Slow economic growth is projected to contribute to a moderation in employment growth to 1.4 per cent in 2024, followed by 1.5 per cent in 2025. Employment growth is projected to average 1.3 per cent between 2026 and 2027, with an increase of over 444,000 net new jobs compared to 2023.
This is a significant improvement compared to the 2024 Budget and reflects the government’s commitment to balancing the budget, reducing the deficit, and putting Ontario’s finances on a sustainable path.
Highlights
Highlights of the Statement include:
Job Creation and Economic Development
- Over 860,000 new jobs have been created since 2018.
- The government has made significant investments in electric vehicle (EV) and EV battery manufacturing, with over $44 billion in investments over the past four years.
- The government is allocating an additional $100 million to the Invest Ontario Fund, which is focused on securing strategic investments that create jobs and drive Ontario’s long-term economic growth and global competitiveness. This brings the total size of the fund to $700 million.
Infrastructure Investments
- Investing more than $191 billion over 10 years in infrastructure, including $27.8 billion for roads and highways and $68.2 billion for public transit over 10 years to build the largest public transit expansion in North America
- Major infrastructure projects include Highway 413, the Bradford Bypass, and the Ontario Line subway project which will, when completed, provide significant relief from crowding throughout the existing transit network,
- Launching the new $5 million Ontario Transit Investment Fund to address transit service gaps in unserved and underserved communities by continued support for high-speed internet infrastructure and other municipal infrastructure programs.
Energy Sector Initiatives
- Planning and licensing for three additional small modular reactors (SMRs) at the Darlington Nuclear Generating Station.
- Over $2.6 billion to refurbish 12 hydroelectric stations, including the Sir Adam Beck Complex at Niagara Falls.
- Launching the largest competitive energy procurement in Ontario’s history to secure at least 5,000 MW of electricity resources.
- Completion of the largest battery storage procurement in Canada’s history, securing nearly 2,700 MW of storage capacity.
- Support for Indigenous-led energy projects, including the Watay Power Transmission Project.
Cost of Living and Tax Relief
- A proposed one-time $200 taxpayer rebate for all adult Ontario tax filers and an additional $200 for each eligible child under 18.
- Extension of the temporary gas and fuel tax cuts to June 30, 2024, saving the average household $380 since July 1, 2022.
- Maintaining the tuition fee freeze at publicly funded colleges and universities, saving students an estimated $1,600 per year for university and $350 per year for college.
Support for Workers
- An additional $260 million in the Skills Development Fund to train workers for in-demand sectors.
- Expansion of the Ontario Youth Apprenticeship Program with a new stream called Focused Apprenticeship Skills Training (FAST) for students in Grades 11 and 12.
Health and Social Services
- Nearly $50 billion over the next decade in health infrastructure, including over $36 billion in capital grants to support more than 50 hospital projects.
- Expansion of the Ontario Learn and Stay Grant to include medical school students who commit to working as family doctors in underserved communities.
- An additional $150 million over two years to expand the Ontario Fertility Program, nearly tripling the number of individuals able to receive government-funded in vitro fertilization (IVF) cycles.
- Total health sector expenses are projected to be $86.0 billion in 2024–25.
Green Bonds and Sustainable Investments
- Issuance of multiple Green Bonds, including the largest 30-year Canadian dollar Green Bond.
- Allocation of funds to public transit, extreme weather-resistant infrastructure, and energy efficiency projects.
Housing
- Investing nearly $2 billion in housing-enabling infrastructure to help build more homes across Ontario – including $1.22 billion for the Housing-Enabling Water Systems Fund and $725 million for the Municipal Housing Infrastructure Program.
Opposition Reaction
Not surprisingly, the Opposition Parties were critical of today’s announcement:
Marit Stiles, Leader of the Official Opposition and Leader of the NDP
The people of Ontario are not getting what they paid for with Doug Ford, in response to the Fall Economic Statement.
“Today’s fiscal update was an opportunity for this government to make the right choices to ease the cost of living. Instead, all Ford has to offer are stale ideas and empty promises,” she said.
“Today’s fall economic statement barely mentions the cost of living, offers no new money for hospitals and schools, and exposes Ontario as a have-not province, receiving equalization payment to keep institutions afloat,” said MPP Catherine Fife, Ontario NDP Finance Critic. “Ontario deserves more than beer promises, bribes and a balance sheet that fails to meet the needs of Ontarians,” she said.
Bonnie Crombie, Leader of the Ontario Liberal Party
Premier Ford and his Conservatives are not in it for the people.
“Doug Ford is more focused on billion-dollar giveaways to wealthy insiders than he is on fixing health care. People are dying on waitlists and Doug Ford is spending billions on booze, foreign spas and the Greenbelt scandal,” she said. “Rent is up by 83%, foodbank use is at an all-time high, we owe more money per capita than ever before, and the Conservatives still have not made good on their promise to implement a middle-income tax cut,” said Stephanie Bowman, Ontario Liberal Finance Critic in response to the Fall Economic Statement.
What This Means to You
Minister Bethlenfalvy was clearly pleased as he introduced the Fall Economic Statement earlier today. Provincial revenues have increased substantially, allowing for an earlier balanced budget, a key plank in the Conservative platform.
Each taxpayer and their children will be given a $200 rebate early in the new year to provide relief and help Ontarians with their cost-of-living challenges. All Ontarians will get the relief regardless of their incomes.
The Minister claims that Ontario is now in a position to do more and will do more, highlighted by the individual tax rebate. He claims that the finances are better than they have been for decades as they slashed deficits resulting in a recent credit upgrade.
Borrowing costs have come down. While there are increases in health care, infrastructure and housing for example, there are very few new monies outlined in the Statement. Most of the content has been previously announced.
On November 14, 2024, the government will launch consultations for input to the 2025 Budget and to hear from Ontarians on the pressing issues of today – namely, making life more affordable, building more homes, schools, and creating good jobs for Ontario workers.
Ontario is scheduled to hold a provincial election on June 4, 2026. However, Premier Ford continues to keep things fluid for an earlier election call, possibly in the Spring,2025.
