The Ford government tabled the most expensive budget in Ontario’s history on Tuesday, with a $214.5-billion spending package that runs a deeper-than-expected deficit this year amid economic uncertainty ahead.
The annual financial blueprint includes a few new programs, laying out Ontairo’s potentially tough economic future. The plan sees economic growth grind to a near-stop in the province and deficits continue until the eve of the next election.
The handful of new announcements in the plan include a new medical school in Vaughan to train family doctors, half a billion dollars to connect people with primary care and four new helicopters for Ontario police forces.
Ontario Finance Minister Peter Bethlenfalvy said the deficits projected would be “temporary,” promising the results of his government’s spending would not be.
“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.
“As we invest in key public services and infrastructure, including new roads, highways and the largest public transit expansion in North America, we refuse to offload the costs onto hardworking Ontario families or municipalities at a time when they’re counting on us to keep costs down.”
Marit Stiles, Ontario NDP Leader, said in a statement that the budget was an “uninspired statement” from a government she said is “out of touch and out of ideas.”
“If you’re looking for change, Ford’s budget is not for you,” said Stiles.
Ontario Liberal Leader Bonnie Crombie called the budget “uninspired” and “unambitious,” saying it did “little for families struggling” in the province.
Ontario Green Party Leader Mike Schreiner said the budget fails to invest in climate change and affordable housing.
The 2024 budget projects a whopping $9.8-billion deficit this year, despite the government promising it would post a surplus of $200 million in its last budget, released just a year ago.
The deficit picture remains overwhelmingly in the red for the next several years, until the 2026-27 financial year.
The estimates have plummeted since last year, with even a faster growth scenario — the province’s rosiest projection — resulting in a $6.1-billion deficit in 2024 and the worst-case scenario leading to a $13.3-billion redline.
The finance minister says the deficit projection takes into account nearly all private sector forecasts, which show “slower growth in 2024,” something the province blames on high inflation, high interest rates and rapid population growth.
Economic growth in the province is predicted to slow to a crawl in the budget document.
The economy grew by an estimated 1.2 per cent in 2023 and will drop to just 0.3 per cent growth in 2024. The budget predicts that, by the election in 2026, Ontario’s economy will be growing at a rate of 2.2 per cent.
The province’s balance sheet shows how a slowing economy could impact tax revenues flowing up to Queen’s Park. Tax revenue is expected to grow by just $1.4 billion from 2023, a far cry from the $12-billion revenue increase projected for 2025.
Despite a better picture for 2025, the Ford government is still planning to run a massive deficit next year as well. Instead of the $4.4-billion surplus it once expected for 2025, the government now projects a $4.6-billion deficit.
Ontario says it plans to balance the books in 2026, just ahead of the next provincial election, projecting a $500-million surplus.
The Ford government does hope to save some money on debt, with interest slightly lower than last year’s forecasts. The 2024 budget puts the cost of interest on debt at $12.8 billion, compared with an estimate of $14.1 billion last year.
Housing and municipalities
Amid the economic doom and gloom, there is a glimmer of hope for the government.
Both new home construction and the resale market are predicted to broadly improve in the budget, with housing starts up significantly, according to private sector forecasts.
The budget projects a total of 274,000 housing starts over the next three years, compared with 245,000 forecast in the 2023 budget — an increase of 12 per cent.
The government’s expectations, based on private sector projections, show 87,900 housing starts in 2024, 90,000 starts in 2025 and 94,000 housing starts in 2026.
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While the numbers represent an improvement, they would still see Ontario fall well short of its goal. Over the years Ontario is projected to build 274,000 new homes; the province’s housing goals are set at 300,000.
The Ford government has pinned many of its housing crisis solutions to a plan to build 1.5 million homes by 2031.
Other municipal and housing-related changes in the budget include a new $200-million fund for cities to apply for sports and recreation infrastructure funding and an expansion of the vacant home tax, along with a tightening of its rules.
The Ford government is spending more than half a billion dollars to help hundreds of thousands of residents find a family doctor, which, health-care advocates say, is key to reducing the burden on overloaded emergency rooms.
Ontario’s Ministry of Health has been focused on creating more primary care teams composed of doctors, nurse practitioners, registered nurses, physiotherapists, social workers and dietitians as a one-stop shop for health care.
Over the next three years, the government plans to spend an extra $546 million to help 600,000 people connect to primary care, according to the province’s fiscal plan, which was tabled on Tuesday in the Ontario legislature.
The funding will be sprinkled in cities across the province and into new or existing health-care teams putting more people in touch with a family doctor.
Spending on health care, the single largest category of Ontario’s spending, is set to increase only marginally in the next year, according to the budget. The document shows it will go from $84.5 billion in 2023-24 to $85 billion in the 2024-2025 year.
The province also says it is spending $50 billion over the next decade on roughly 50 new hospital projects, changes it says will add 3,000 new beds to the provincial network. Among the projects are a new hospital in Moosonee and a new 17-storey hospital tower in Toronto. Both have already been announced.
Spending on hospital infrastructure in the 2024-2025 year is also set to creep up slightly from $3.34 billion last year to $3.58 billion in 2024. Other health infrastructure spending will drop from $640 million to $303 million, the budget shows.
The government is planning to improve long-term recruitment in the health-care sector by setting aside roughly $9 million to create a new medical school in Vaughan in partnership with York University. The proposed new medical school would be specifically focused on training family doctors, the budget explained.
In long-term care, the province says its Accelerated Build Pilot Program has led to four new long-term care homes on hospital-owned lands in Ajax, Mississauga and Toronto. Those homes have resulted in a total of 1,272 new beds across the four sites.
Beginning this year, Ontario will also spend $46 million over three years to fund 59 behavioural specialized unit beds created in 2023 and another net new 200 still to be brought online.
Lisa Levin, the CEO of AdvantAge Ontario, said the 2024 budget included welcome investments for the long-term care sector.
“Today’s budget includes important investments aimed directly at the priority needs of long-term care homes, including staffing, resident care and getting more homes built and redeveloped to serve our aging population,” she said in a statement.
Long-term care is facing significant financial pressures. We are very pleased that government has recognized those needs and responded to them in this budget. This is good news for Ontario seniors.”
The budget includes a range of references to — but few details on — the government’s signature highway and transit projects.
The Ford government and the premier himself have boasted their credentials on construction since taking office, with the latest string of budgets all titled in reference to their plans.
The latest budget document bears the title “Building a Better Ontario,” with Bethlenfalvy buying construction boots to celebrate its completion.
Details on those building projects in Ontario and how much they will cost, however, are sparse.
The budget, for example, does not include a cost for Highway 413 or the Bradford Bypass.
The road, set to run between Milton and Vaughan, has been frozen since 2021 but is the subject of a recent deal between Ontario and the federal government that could allow construction to begin again. The budget says the route is still in the middle of its Stage 2 Environmental Assessment and does not provide a timeline for either construction or completion.
The document says the Bradford Bypass — also without a defined cost — is in the early works stage of construction.
The 2024 budget document does confirm that “planning and design” is underway for two extensions to the Hazel McCallion LRT in both Mississauga and Brampton. The extensions were announced earlier this year for the unfinished line, with Ontario Premier Doug Ford saying they would cost “a couple of billion.”
One extension will see a loop from the route wrap itself around Mississauga’s downtown, while a second part of the line will extend north from Steeles Avenue into Brampton.
The 2024 budget does not include a specific cost for the extensions but does show a $3-billion increase in infrastructure spending on transit, with the extensions and changes to the Milton Line the main new projects announced by the government.
For drivers, the Ford government is boasting a continuation of the gas tax cut it introduced in mid-2022, with the province collecting just nine cents per litre until the end of the year.
Changes are on the horizon for how auto insurance can be administered in Ontario, with the government working to allow drivers with other coverage to opt out of parts of their plan.
Money is also being introduced to expand police enforcement over auto thefts, including plans for a new public awareness campaign and four new police helicopters.
The budget also reveals that the costs for universities and colleges are set to fall slightly thanks to a cap on international students, although the hit to revenue is expected to be far greater.
The government recently announced $1.3 billion partly to help colleges and universities handle the drop in their revenue from international students, well below the $2.5 billion recommended by an expert panel.
The budget, however, shows a decrease in base funding for colleges and universities, something the government attributes to the drop in costs associated with more students.
The province is expecting post-secondary institutions to be able to save money by hiring fewer instructors and organizing fewer in-person class experiences like labs when the number of international students falls by as much as 50 per cent.
“Ontario understands the importance of stabilizing the post-secondary education sector to ensure the continued delivery of high-quality education experiences for students,” the budget states.
Bethlenfalvy said he would not “allow colleges to fail” but did not say if new rescue packages were coming for the post-secondary sector.
For schools, the province is budgeting $30 million over three years to equip schools with security cameras, lighting and vape detectors.
The government has separately announced an increase of $120 million to double its spending on the Ontario Autism Program.
Higher costs in some sectors — including education, health and justice — come because the province has started to pay out large settlements for Bill 124, its now-repealed wage restraint legislation.
While Ford has already confirmed the province has spent $6 billion in Bill 124 remedies so far, the province has been reluctant to share the detailed breakdown of costs.
The government’s 2024 budget lays out the increased spending in the 2023-24 fiscal year:
- Health: $1.58 billion in increased spending primarily due to compensation and Bill 124 remedy settlements.
- Education: $1.88 in increased spending mainly due to compensation, Bill 124 remedy settlements and arbitration awards.
- Children, Community and Social Services: $44 million higher due, in part, to Bill 124 settlements.
- Justice: $638 million higher largely due to compensation costs and Bill 124 remedies.
Ministry of Finance officials said Bill 124 won’t have ongoing costs since most were one-time payments.
To pay for the increased costs, the Ford government said it drew $2.8 billion from the provincial contingency fund in the final quarter of the last fiscal year.
MOBILE CLINICS, RESPONSE TEAMS FOR MENTAL HEALTH, ADDICTIONS SUPPORT
Three mobile mental health clinics for remote, rural and underserved communities are part of the budget’s mental health investments.
The budget cites $124 million over three years for the Addictions Recovery Fund, which includes support for three police-partnered mobile crisis teams and the maintenance of 383 addictions treatment beds for adults who need intensive support.
In all, the budget says the government is investing an additional $396 million over three years as part of its mental health and addictions strategy.
ADVANCED COMPUTING AND AI
Ontario is putting an additional $18 million over the next three years into the province’s advanced research computing facilities.
The government says the money will help ensure the systems meet the storage and computational demands for research into technologies such as artificial intelligence.
The budget also earmarks $47.4 million for a refresh of supercomputers at the University of Toronto and at the University of Waterloo.
— with files from The Canadian Press
