Liberals crank up Ontario budget spending on seniors and families as election looms
Finance Minister Charles Sousa — who finally balanced the books last year when he promised surpluses for the foreseeable future — said Wednesday that Queen’s Park will run a $6.7 billion deficit in 2018-19.

TheStar.com
March 28, 2018
Robert Benzie

Ontario’s Liberal government is borrowing billions to bankroll new pre-election budget spending aimed at seniors and young families.

Finance Minister Charles Sousa — who finally balanced the books last year when he promised surpluses for the foreseeable future — said Wednesday that Queen’s Park will run a $6.7-billion deficit in 2018-19.

“We slayed the deficit … but make no mistake … balancing the budget is not an end in itself. It is a means to an end and the end is a stronger Ontario,” Sousa told the Legislature as he defended a return to shortfalls.

Sousa’s record $158.5-billion budget — with a new $2.2-billion program of free child care for preschoolers, dental benefits for those without coverage, and $750 annually for seniors to pay for house maintenance — was tabled six weeks before the official launch of the June 7 election.

“We must work to ensure that opportunity reaches everyone — women, students, seniors — and those who are in precarious work, toiling away in the gig economy,” the treasurer said, signalling “fairness, caring, and opportunity” is the Liberals’ re-election mantra.

“Good public and social policy must also be sound economic policy, and that is what makes it sustainable,” said Sousa, who does not forecast the books to be back in black until 2024-25.

By that time, Ontario’s net debt — already the largest of any subnational jurisdiction in the world at $325 billion — is expected to be $400 billion.

Public opinion polls have suggested the Liberals, who have held power since October 2003, are on borrowed time and rookie Progressive Conservative Leader Doug Ford is poised to win power.

Ford, who has vowed to slash 4 per cent in government spending by making unspecified cuts, panned the budget as Premier Kathleen Wynne “trying to buy your vote” with the public’s money.

“I’m surprised that the finance minister and the premier aren’t up here saying, ‘We’re giving away free cars, we’re going to pay your mortgage — you get a free car, you get a free car, you get a free car.’ That’s next on their agenda,” he said.

But Ford repeatedly declined to say what services or programs he would chop, though he joked that he would reduce the CBC’s public funding if he could.

“Just imagine what Kathleen Wynne will do if she’s every re-elected. God help us,” said Ford, who was elected March 10 to replace Patrick Brown.

When pressed, Ford said the Tories would unveil an election platform in the coming weeks.

“Our goal is always to have a balanced budget. There’s hundreds and hundreds of programs throughout this province, and every single program will be reviewed.”

NDP Leader Andrea Horwath, who has watched the Liberals adopt New Democratic pledges like pharmacare and subsidized dental care, rejected suggestions Wynne’s Liberals were outflanking her party on the left.

“I do not support any of these programs in this budget. It’s a meagre amount,” said Horwath, attacking Ford for having “no plan whatsoever” and being “about sound bites and not substance.”

“He’s not talking about change for the better. Mr. Ford has a lot of platitudes. Maybe that’s because he prints a lot of bumper stickers in his other life,” she said, referring to the Ford family’s label business.

“Change for the sake of change will drag our province backwards. I dare say that’s what Mr. Ford is doing for his party.”

In the legislature, Sousa told the Liberals are “making a choice.”

“We are committing to more support for social and developmental services, more supports for mental health and health-care programs and more supports for students,” the minister said.

“We are choosing to put our strengthened fiscal position to work to address the priorities of the people of Ontario and, as a result, we project a deficit of $6.7 billion next year — less than 1 per cent of GDP,” he said.

Insisting the Liberals have “a clear plan to track back to balance,” Sousa claimed the governing party is striking the political middle ground between the Tories and the New Democrats.

“Some will argue for more cuts. Others will call for more spending,” he said.

The treasurer pointed out that servicing the debt will cost 8 cents on every dollar this year — compared to a peak of 15.5 cents in 2000-01 when the Conservatives were last in office and interest rates were higher. Still, that figure is projected to climb again to 8.5 cents by 2020-21.

Ontario’s net debt to gross domestic product rate, which peaked at 39.3 per cent in 2014-15, will be 37.6 per cent this year and is expected to rise to 38.9 per cent in 2022-23.

Sousa was extremely conservative on the revenue estimates for Ontario’s new cannabis monopoly that will be up and running after the federal government legalizes recreational marijuana this summer.

The government forecasts start-up costs will mean the Ontario Cannabis Retail Corporation — a subsidiary of the Liquor Control Board of Ontario — will lose $40 million this year. With retail branding as Ontario Cannabis Stores, the chain will make $35 million next year and $100 million in 2020-21.

There will, however, be $35 million in federal excise duty from pot this year, rising to $115 million by 2020-21 — half of which will be shared with municipalities to offset bylaw enforcement, policing and other anticipated new expenses.

Smokers will see tobacco taxes jump — by $4 a carton Thursday morning, and another $4 next year.

In terms of other tax changes, the 1.8 million Ontario taxpayers making $95,000 or more could pay an average of $200 more in personal income tax due to the elimination of a surtax and a streamlining of tax brackets.

But those who donate to charity will get additional tax relief — most donors who currently qualify for a break worth $211 to $253 on a $2,000 charitable donation will get back $325.