Ontario Finance Minister Peter Bethlenfalvy unveiled the 2024-25 provincial budget on Tuesday, citing a worsening of the province’s fiscal situation and higher deficits next year due to slow economic growth, low inflation and high interest rates.
Despite this, the province said that it will not increase the tax or fees paid to the residents until it committed itself to continue with its plan to build more infrastructure and use it for needs such as health and hospitals. The budget also introduces new spending in areas including crime, car insurance rates and recreation.
Here’s what you need to know about the Ontario government’s latest funding plan:
The deficit is increasing, but it is still a balancing act
Ontario estimates that next year’s deficit will nearly double what was predicted on the back of rising economic growth to $9.8-billion from a previous estimate of $5.3-billion. Last year, the government had forecast a balanced budget for 2024-25.
Still, the latest budget shows the deficit will drop to $4.6-billion by 2025-26 and a surplus of more than $500-million by 2026-27, when Ontarians will vote in the next provincial election. The government says the deficit is due to slow growth, the need to invest more in infrastructure, and the previously announced extension of state fuel tax cuts. Also, the province had to come up with billions of rands to pay public sector workers after the government lost a legal challenge over a law that tried to freeze wages.
Municipalities and infrastructure
A major focus of the 2024 budget is to support Ontarios 444 municipalities, including a previously announced $1 billion new municipal program to facilitate housing and an additional $625 million fund for water projects.
These measures were aimed at addressing the complaints of municipalities that their ability to build houses is hindered by the lack of road and pipeline services.
Health care
Ontario plans to spend billions more on health care, including $2 billion over three years to expand access to home care and increase compensation for support workers and nurses; and about $1-billion more for hospitals by 2024-25.
The budget also provides an additional $546-million over three years, starting next year, to connect 600,000 people with primary care groups; $124-million over three years for an addiction recovery fund that includes treatment beds and mobile crisis response teams; and another $152 million to provide stable housing for people with mental health conditions and addictions. And the government said it will create a new medical school in Vaughan, Ont., affiliated with York University, that will focus on training family doctors.
Bill 124 retroactive
Ontario is spending billions on paying public sector workers, including health and education workers, whose compensation was increased by Bill 124.
The law limits wage increases for public sector workers by one percent a year for three years, but unions successfully challenged the law in court.
The Ontario Court of Appeal issued a ruling last month that upheld an earlier ruling that found the law unconstitutional, prompting the government to announce it will overturn the law rather than appeal the decision.
Even as the court case continued, the public employee unions were awarded a settlement. Mr. Bethlenfalvy said the total amount of additional compensation owed to date is approximately $6-billion.
Auto insurance
The government says it will press ahead with reforms to the motor insurance industry to provide drivers with more affordable options and improve access to benefits.
While compulsory accident insurance benefits will continue to apply to medical, rehabilitation and care benefits for the severely injured, the budget promises that all other benefits will be optional. The government says this will give drivers the chance to lower premiums with a wider range of coverage options.
Mr. Bethlenfalvy told reporters that the plan does not include specific numbers about price increases or decreases, but said the policy focuses on choice and ease of use and aims to promote competition. Opposition New Democrats, however, warned that drivers would be left at greater risk if they were given the option to opt out of cover.
The police
The government is pledging $46-million over three years to improve police mobility and response times in the Greater Toronto Area, including the purchase of four police helicopters. Helicopters are expected to be used by the Ontario Provincial Police but the government has not yet decided whether other police officers will use them in their provinces.
Sports and recreation
The province is launching a $200 million Community Sports Infrastructure Fund that will be used for sports and recreation facilities. This funding, spread over three years, will focus on building new facilities, such as hockey rinks and community centers, and will be given to municipalities based on requests for specific projects.
#Ontario #Budget #Billions #health #care #rising #deficit #auto #insurance #highlights
Image Source : www.theglobeandmail.com