Winter budget looms for Ontario

Premier Kathleen Wynne’s Liberals are aiming to introduce the provincial spending plan before the March break, the Star has learned.

Thestar.com
Jan. 23, 2016
By Robert Benzie

Global warming will give Ontarians their first winter budget in years.

Premier Kathleen Wynne’s Liberals are aiming to introduce the provincial spending plan before the March break, the Star has learned.

Because Ontario budgets are traditionally delivered on a Thursday, that means Finance Minister Charles Sousa could deliver his fiscal blueprint on March 4 or March 11.

That means the earliest budget at Queen’s Park in generations, falling before the March 14-18 break for students. Last year’s was introduced on April 23.

While it would come weeks before federal Finance Minister Bill Morneau is expected to unveil the first budget‎ of Prime Minister Justin Trudeau’s government, the provincial Liberals have a different deadline.

Wynne’s government is partnering with Quebec and California to expand North America’s largest carbon-pricing market, which should reduce the greenhouse gas emissions that contribute to climate change.

Because of the complexity of that “cap-and-trade” system, there are processes that Ontario must go through in order to be a part of the carbon auction in the 2016-17 fiscal year.

That means Sousa must table his budget before spring in order to make the necessary legislative and regulatory changes.

The government has previously said that putting a price on carbon will bring in $300 million this year and $1.3 billion in 2017-18 with all the new revenue earmarked for combating climate change.

At a Queen’s Park meeting Friday with Alberta Premier Rachel Notley, Wynne emphasized that protecting the environment is crucial.

“We’ve got economic imperatives, we’ve got environmental imperatives,” the Ontario premier told reporters.

“Those are shared. There’s not one environment for Saskatchewan and one environment for Quebec, and one environment for Nova Scotia,” she said.

“The environment affects every single one of us - likewise with the economy. If we want to be strong as a country then we’ve got to find a way to tackle these very challenging problems.”

Under a cap-and-trade system, industries have greenhouse gas limits - or caps - and those coming in under theirs can sell or trade credits.

That creates an economic incentive to pollute less and, over time, an industry’s overall cap will be lowered in order to reduce emissions.

This in turn is expected to promote the use of greener energy sources, though consumers will have to pay more to burn fossil fuels like gasoline.

Aside from climate change, Sousa’s March budget will also finally tackle the thorny problem of expanding wine sales to grocery stores.

While beer began being sold in the first Ontario supermarkets last month, trade concerns and other complications have delayed the expansion of wine on grocers’ shelves.

Wynne’s government expects to uncork a solution that will help the thriving domestic wine industry and benefit consumers by the time Sousa announces his budget.

The treasurer, saddled with a $7.5-billion deficit this year, will reiterate his commitment to balancing the books in 2017-18 - in time for the next provincial election.

Ontario budget in 2015-16: $131.9-billion

Deficit for 2015-16: $7.5 billion

Projected deficit for 2016-17: $4.5 billion

Annual revenues from pricing carbon (as of 2017-18): $1.3 billion.

Cap-and-trade aims at reducing greenhouse gas emissions to 15 per cent below 1990 levels by 2020 (and 80 per cent below 1990 levels by 2050.)