Ontario’s “Plan for the People “
Last week’s fall economic outlook was followed this week with Mr. Ford saying during his press conference on 20 November, “My friends, this review is our roadmap to fiscal recovery.” To deal with what the PCs now estimate is a $15 billion structural deficit they say they are already cutting the deficit by finding $3.2 billion in efficiencies in operations, including a hiring freeze across the public service except for front line and essential services.
Though government is promising to spend less, Mr. Ford says there’s also $2.7 billion less in revenue via tax relief to individuals, families and businesses apparently including a $1.5 billion revenue loss attributed to the cancellation of the province’s cap-and-trade program. It’s not clear if the cost of cancelling existing commitments and Liberal programs related to the cap-and-trade are included in the $2.7 billion revenue reduction.
- Ford says since taking office the deficit has been reduced by $500 million, which is the net effect of the cost cutting and revenue reductions he reported.
Fiscal responsibility is essential. CFFO advocated strongly for greater fiscal responsibility prior to the election and since then in our letters to Ministers but how it is achieved matters to us.
- Fortunately, the Ford government introduced new transparency measures so we should expect an assessment of the private and social costs compared to the benefits of their path to fiscal responsibility.
Mr. Ford also stated achievements include killing red tape by 25 per cent, stopping $308 million in planned tax hikes by the previous government and saving 7,900 small businesses in Ontario up to $40,000 a year. Highlights include:
- A “Low Income Individuals and Families Tax Credit” called LIFT, for those earning $30,000 or less, which means they will pay no provincial income taxes.
- Ford said that cancelling the cap and trade program, saves the average family $260 a year on fuel tax as long as Ontario avoids the federal carbon tax, however, would the promised federal rebate have the same effect?
- Rent controls continue on existing units with new units exempt so as to stimulate construction but will relatively poor incentives for upkeep and accelerated conversion to condominiums or short-term rentals reduce supply?
- Non-eligible dividend tax credits will be adjusted to raise the top marginal rate by 1.6% to 47.4%.
- The average Workplace Safety and Insurance Board (WSIB) Premium rate will decline by 29.8% for estimated savings to employers of $1.45 billion in 2019. Hopefully the fund will be sustainable with this change.
- Modernizing the province’s apprenticeship system will generate the skills in demand now.
- Broadband, digital services and cellular access will be expanded to unserved and under-served areas.
- A “Review of High Speed Rail” for SW Ontario is promised.
A significant announcement is the Minister’s Agriculture Task Force of leaders from across the agriculture and agri‐food sector that will meet regularly to provide the government with “an important perspective” on “key policies that impact the industry, such as trade, and provide expert input on crucial future decisions such as changes to the Ontario Food Terminal network. Industry input will ensure policies and programs foster economic growth and do not impose additional regulatory burden or costs on farmers or agri‐food businesses.”
A timeline to a balanced budget has not yet been provided but the commitment to focus on agricultural sector concerns should give us good reason to be optimistic.