TORONTO – The Ontario government is diving into the red ink due to the weakening economy. Finance Minister Peter Bethlenfalvy released his 2024 provincial budget on March 26 with which records a $9.8 billion deficit, nearly double what was projected in his fall economic update last September. The budget increases spending by Premier Doug Ford’s government by 7.9 per cent from 2023, totalling $214.5 billion. Since 2022, government spending has increased 17.2 per cent. Bethlenfalvy projected the provincial deficit to decrease to $4.6 billion in 2025-26, and post a “modest” surplus in 2026-27.
Higher interest rates and a slowing GDP, combined with increases to public sector wages, infrastructure spending and lower gas taxes contributed heavily to the deficit.
Provincial spending will increase with $2 billion over three years going to home and community care. Nearly $1 billion will go into a new Municipal Housing Infrastructure Fund and $825 million will go to repairing and expanding water/wastewater systems.
College and University tuition will be frozen for the next three years, with a $900 million sustainability fund for the 47 publicly-funded helping those institutions deal with any financial shortfalls.
Over $26 billion will be spent on capital projects ranging from roads and bridges to hospitals and municipal infrastructure.
A new $200 million Community Sport and Recreation Infrastructure Fund will pay for new or upgraded sports facilities in municipalities.
For retirees, the Guaranteed Annual Income System will be expanded and annual increases indexed to the inflation rate. Private income thresholds will be modernized and increased as well.
“In the face of global economic uncertainty and high interest rates that continue to put pressure on Ontario families, our government is taking a responsible approach by investing to rebuild Ontario’s economy without raising taxes,” Bethlenfalvy said in a statement on the release of the budget.
The province will extend its 5.7 cent per litre decrease in provincial gas tax and 5.3 cent per litre fuel tax decrease for another six months, leaving both rates at nine cents per litre.
Locally, no new money was in the budget specifically for South Dundas or SDG Counties. The budget also did not address the Association of Municipalities of Ontario’s recent call for a review of funding commitments to municipalities. The AMO recently said that between $3 billion and $4 billion in provincial commitments are paid for through municipal taxation.
“While AMO is disappointed that this commitment was not included in today’s Budget, there is no question that municipalities’ concerted action resulted in critical investments in areas like infrastructure and mental health and addictions that will make a meaningful difference to municipalities,” the AMO said in reaction to the budget.
Autism Ontario called the increased funding good news. “Especially if the funds are coupled with a plan to build professional capacity in the province to deliver core services, working with colleges, universities, and private businesses to reverse the exit of professionals from the autism field who are needed to deliver these essential services — particularly in more rural, northern, and Indigenous communities.”
Leader of the Opposition and NDP leader Marit Stiles called the budget a missed opportunity.
“People are looking for better health care and homes they can afford. Instead, they got an uninspired statement from a government that is out of touch and out of ideas,” she said.
Ontario Liberal leader Bonnie Crombie called the budget “uninspired” saying that it accomplished “so little for families struggling to find a family doctor, put their children in daycare, or afford skyrocketing rent increases.”
Ontario Chamber of Commerce President Daniel Tisch said the 2024 budget was a step in the right direction.
“At a time when Ontario faces declining productivity, we hope it sets the stage for bigger leaps forward,” Tisch said. “The government has been bold in attracting investments and committing to build infrastructure to create jobs – and we need similarly bold investments in our people, public institutions, and communities. That’s how we’ll rebuild business opportunity and business confidence.”
The province’s net debt-to-GDP will decrease to 39 per cent according to budget projections. The province has forecast to pay $13.9 billion in interest costs for its debt, a decrease from $14.4 billion projected in the 2023 budget.