Ontario doubles deficit to $20B, boosting hospitals in COVID-19 fight

CP24.com
March 26, 2020
Chris Herhalt

The Ford government is going deep in the red to support hospitals and people during the COVID-19 pandemic, doubling the deficit to more than $20 billion in 2020-2021.

Not dubbed an official budget but instead “Ontario’s Action Plan 2020: Responding to COVID-19,” the document includes $3.3 billion for hospitals, public health units and laboratories, and a combined $4.8 billion in assorted reserves and contingencies --the largest reserve fund ever set aside by Ontario.

The healthcare funding includes direct transfers to increase hospital budgets across Ontario, enabling them to add at least 1,500 critical and acute care beds.

It also includes new money to purchase personal protective equipment and ventilators, and $160 million more for laboratories conducting COVID-19 testing and local public health units managing, isolating and contact tracing confirmed patients.

The money will also open up new OHIP fee codes for doctors to help patients by phone and virtually, as well as even more lines and staff at Telehealth Ontario.

The Ford government also says $1 billion of the $3.3 billion it is adding to the healthcare sector will be held as a contingency in case the province fails to flatten the curve and case growth continues to accelerate.

Ontario Finance Minister Rod Phillips said Wednesday the new measures are necessary to deal with the “extraordinary threat” to the health and economy of the province.

“It demands an extraordinary response from all levels of government and civil society because we’re all in this together,” Phillips said.

They’re also giving long-term care homes $243 million to increase screening and safety protocols and ensure adequate staffing and secure more equipment.

On the economic front, the Ford government is preparing to give parents a one-time cash payment of $200 for every child they have under the age of 12. The payment rises to $250 for each child with special needs.

Provincial officials told reporters the payments will cost Ontario $340 million and parents will be able to apply for them on a special online portal starting on April 6.

They’re also doubling payments to low-income seniors through the Guaranteed Annual Income System. For the next six months, an elderly couple will see their maximum monthly payments rise to $332.

OSAP loan repayments have also been suspended until Sept. 30.

Finally, the province is deferring a variety of the taxes, fees and premiums it collects for the next five months.

They’re deferring payment of “most provincially administered taxes,” without penalties or interest for the next six months.

They’re also allowing businesses to defer paying WSIB premiums for the next six months.

And they are allowing cities to defer remittance of education property taxes due June 30 to Sept. 30, so they can in turn defer more taxes owed by businesses and residents in their municipalities.

Ontario’s deficit will rise from $9 billion last year to $20.5 billion in 2020-2021, with the assumption that real GDP growth in Ontario will fall to zero for the year, and unemployment will rise by roughly one per cent to peak sometime in the year at 6.6 per cent.

With interest costs, Ford plans to spend $174.3 billion in 2020-2021.

The plan released Wednesday assumes that personal and corporate income taxes will fall a combined total of only $500 million this year, which may be a lofty assumption given the fact that at least several hundred thousand of the roughly 900,000 Canadians who have already lost their jobs due to the COVID-19 pandemic reside in Ontario.

The plan also assumes sales tax revenue will remain constant through the year.

Revenue generated by Ontario Lottery and Gaming Corporation is slated to fall by $1.6 billion this year, from $2.4 billion to $800 million due to the ongoing closure of all casinos as part of Ontario’s emergency social distancing measures.

The healthcare sector understandably sees a large budget increase of 4.8 per cent, other ministries are still being curtailed to help pay for the surge.

Small cuts are being made to municipal affairs and housing, tourism culture and sport, the ministry of attorney general and economic development of less than 10 per cent each.