The Top Line
This afternoon Ontario Finance Minister Peter Bethlenfalvy introduced his Fall Economic Outlook. Entitled ‘Ontario’s Plan to Build: A Progress Update,’ a clear focus of the Minister is to ensure Ontario weathers the economic turmoil expected due to inflation and the continued slowdown of the provincial economy.
While the update was mostly a traditional fiscal and economic overview, it included targeted measures focused on consumers, small businesses and people with disabilities. These reflect what the government feels are the priorities of the people of Ontario as expressed in the June election, which returned a large majority government for Premier Ford’s Conservatives.
Fiscal Snapshot
Ontario’s real GDP is projected to rise 2.6% in 2022, 0.5% in 2023, 1.6% in 2024 and 2.1% in 2025, indicating that the Government expects the economy to slow significantly.
The government is projecting a $12.9 billion deficit in 2022–23, nearly $7 billion lower than the outlook published in the 2022 Budget. Over the medium term, the Government projects declining deficits of $8.1 billion in 2023–24 and $0.7 billion in 2024–25. Including 2022–23, this represents a cumulative improvement of $18.1 billion in the deficit outlook and a cumulative $26.1 billion reduction in borrowing needs compared to the 2022 Budget.
Highlights
Highlights of today’s update include:
- $185 million in income tax relief for small businesses over the next three years, benefiting about 5,500 small businesses through the proposed extension of the phase-out of the small business tax rate.
- $675 million in income tax relief over three years by temporarily allowing eligible businesses to immediately expense up to $1.5 million per year for certain capital investments. The Province sees this as encouraging business investment across sectors.
- As announced ahead of the Economic Outlook, the Province will extend the cuts to the gas and fuel tax rates so that the rate of tax on gasoline and fuel (diesel) will remain at 9 cents per litre until December 31, 2023.
- An additional $40 million in 2022-2023, including $30 million in new funding, for the latest round of the Skills Development Fund to support priority infrastructure projects and youth employment and training.
- Launching a voluntary Clean Energy Credit registry to boost competitiveness and attract jobs.
- Introducing amendments to the Securities Act to provide rule-making authority to the Ontario Securities Commission to enable digital access to documents, also known as Access Equals Delivery. The Province views this measure as providing a more convenient, cost‐efficient, timely and environmentally responsible approach to communicating information.
- The Government will incentivize film and television production by proposing to expand eligible expenditures for the Ontario Production Services Tax Credit to include location fees.
- The Government will double the Guaranteed Annual Income System payment for low-income seniors for one year, beginning in January. This will increase the maximum monthly payment for single seniors to $166 and $332 for couples.
At the end of the update, the Government invited submissions for its 2023 Budget.
Opposition Reaction
Not surprisingly, the Opposition Parties were critical of the update.
It’s hard to fathom the health care crisis getting even worse. We have seen cancelled surgeries, ER closures, long waits in pain, and now not enough pediatric ICU beds for kids sick enough to require intensive care. It’s disturbing that none of this has moved Doug Ford to make the investments needed to shore up our public hospitals.
Catherine Fife, Finance Critic, Ontario NDP
Instead of doing what is needed to help Ontarians during difficult economic times, Doug Ford and the Minister of Finance are continuing to park billions of dollars in historically high contingency funds, short-changing our public services and families who are struggling to keep up with the soaring cost of living.
Stephanie Bowman, Finance Critic, Ontario Liberal Party
One look at Ford’s Fall Economic Statement and you could conclude that everything’s just great in the province. But that’s far from reality. The PC’s austerity mindset is causing nothing but pain and hardship for the people of Ontario.
Mike Schreiner, Leader, Green Party of Ontario
What This Means to You
While Minister Bethlenfalvy never mentioned the word recession in his update, he is clearly preparing for an economic slowdown and is seeking to buttress the Province against the economic tide. As the Minister begins consultations on his next Budget, focusing advocacy efforts on how policy objectives align with the government’s priorities to attract investment and create jobs will be necessary.
