More cash for parents, small biz, health in biggest spending budget ever; nothing new for schools

The Ford government has tabled its 2021 budget and it includes funding for small businesses and the tourism industry. Brandon Rowe reports on the new budget and hears mixed reaction from industry insiders.

By Richard Southern

The third budget from the Ford government is the biggest in Ontario history — earmarking $186 billion in spending — as the government opens coffers to help hospitals and support vaccination efforts amid the COVID-19 pandemic.

The total budget of $186 billion, entitled “Protecting people’s heath and our Economy,” sets a new spending record, up from $148.8 billion in last year’s budget.

However, as big as it is on spending, the budget is also big on hope that Ontarians and businesses will help revive the economy as the pandemic eases.

The projected deficit is expected to fall to $33.1 billion, down from the record $38.5 billion last year. This is because the government is banking on tax revenues going up by some $6 billion as businesses reopen and Ontarians spend their pandemic savings. Debt is also expected to grow to half a trillion by 2023.

There are no new taxes or spending cuts.

Here are the highlights:

Health Spending

Pandemic spending leads the way in this budget — the government is spending another $1.8 billion on the hospital sector, including $760 million for the creation of 3,100 new hospital beds and $300 million to reduce surgical backlogs.

One billion dollars is being spent on the government’s vaccination plan and $2.3 billion more for more testing and contact tracing.

The government is also planning to build a new wing at the William Osler Health System in Brampton.


More money for parents

Parents, regardless of income, will be receiving another cheque for $400 per child and $500 for each child with special needs — double the amount of the last payment.


More money for small businesses

The government will dole out a second payment of its small business support grant, which provides $10,000 to $20,000 for businesses impacted by the pandemic. Eligible small businesses will automatically receive a second payment equal to their first. People that started a businesses during the pandemic are eligible for this grant.


New help for tourism

Similar to the small business support grant, there is a new tourism and small business support grant.

It provides one-time payments of $10,000 to $20,000 for small tourist business including hotels, motels, travel agencies, amusement and water parks and summer vacation camps for kids.


Childcare

The government is offering a temporary 20 per cent increase to the childcare tax credit, which will give 300,000 low income families an extra $1,500. Ninety per cent of childcare costs with be covered with this tax credit for households making $50,000 a year or less.


Jobs

A new temporary Ontario jobs training tax credit will be introduced to cover some tuition costs. The government says it will provide up to $2,000 per recipient, for up to 50 per cent of eligible expenses.

Transportation

The government is setting aside $56.4 million over 4 years for a new “Ontario Vehicle Innovation Network” for the development of next-generation vehicles. Twenty-one billion dollars over 10 years is being earmarked for highways, but there is not a single word in the budget about the proposed highway 413.

Education

There is almost no new education spending in this budget. The one-time COVID-19 related $1.6 billion funding for the education sector in the last budget is not being renewed. Much of that funding was from the federal government and school boards.

Alcohol

Unlike prior Ford government budgets, alcohol is only mentioned a few times this time around. The government will direct the LCBO not to proceed with a scheduled hike in wine prices and $1.2 million is being set aside to support small distillers.

Cannabis

The government is bringing in less money than expected from cannabis sales. The Ontario portion of the federal Cannabis tax is $140 million in revenue, lower than the projected $145 million.

The Ontario Cannabis Store brought in $70 million in revenue, lower than the projected $80 million.


Gambling 

The government is moving ahead with legal internet gambling. It has appointed a commercial project lead and is accepting public input.


Racism and hate

The government is setting aside $1.2 million over two years to support the anti-racism and anti-hate grant program.


Summary

This is very much a continuation of the Ford government’s last pandemic budget, with continued money being doled out to parents and small business.

It projects steadily declining deficits, but the government is not expected to return to a pre-COVID-19 deficit until 2027. It believes the deficit will be gone by 2029, though the government would have to be elected two more times to ever see that happen.

Much of this relies on the economy coming back to life and interest rates staying under control which are both big variables.

Critics will take issue with no new education spending and nothing new for bars and restaurants or for sick days, but the government says its big new expenditures on health and small business are prudent measures with the pandemic not yet over.

So far, $51 billion has been spent on tackling COVID-19.

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