An investment bank but nothing for cash-strapped Ontarians in mini-budget

Despite a growing number of Ontarians struggling to pay the bills, the Ford government’s fall economic statement doesn’t mention the word affordability once and contains no new measures to help individuals struggling with high inflation.

The document is big on infrastructure spending, contains no new fiscal help for the city of Toronto, and projects a ballooning budget deficit for this year. Here are some of the highlights:

INFRASTRUCTURE BANK

The highlight of the so-called mini-budget is the government setting aside $3 billion for the creation of an infrastructure bank. The government says the new arms-length institution will be  “Responsible for attracting public-sector pension plans and other trusted institutional investors to participate in large-scale critical infrastructure projects.” The bank will have the mandate to help build major projects like long-term care facilities, energy, housing, municipal infrastructure and transportation while helping to reduce the government’s financial risk. It offers few details though of when it will start or how it will benefit taxpayers.

NOTHING ON AFFORDABILITY

There are no new measures on affordability beyond the previously announced plan to extend the 5.7 cent/litre gas tax cut to June 2024. The word “affordability” does not appear once in the 158-page document.

BALLOONING BUDGET DEFICIT

The government is projecting deficits of $5.6 billion in 2023-24, up sharply from the August projection of $1.3 billion. The government expects to run a deficit of $5.3 billion in 2024-25 followed by a surplus of $500 million in 2025-26 – which is an election year. The government says the revision is due to slower economic growth leading to smaller revenues, while the province is also adding $2.5 billion to its contingency fund for this year, bringing the total to $5.4 billion, to mitigate near-term economic risks.

VAPE TAX

The cost of vaping is set to rise. Ontario will enter into a new taxation agreement with the federal government that will see the existing federal tax on vaping double, with the additional revenue going to the province of Ontario.

HOUSING STARTS

The government is projecting 285,000 housing starts over the next three years which will leave the government well short of its goal to build 1.5 million new homes by 2031.

HIGHWAYS

An additional $200 million is being set aside for highway spending, though no specific money is mention for the government’s promised Highway 413 or Bradford bypass.

MAMMOGRAMS

The province will be lowering the age for regular breast cancer screenings from 50 to 40, in an effort to detect cancer earlier. Health Minister Sylvia Jones announced the move earlier this week. The changes will mean an additional 130,000 mammograms each year.

INVEST ONTARIO FUND

The province is investing $100 million more into the Invest Ontario Fund, bringing it to a total of $500 million. The province says the money is used to attract companies to Ontario. The province cites a $3.1 million investment from the fund given to Mitsui High-tec, a motor parts manufacturing company, which invested more than $100 million to expand its capacity to build parts for electric vehicles.

WATER FUND

The province is launching what it calls a new housing-enabling water systems fund.” Ontario will invest $200 million over three years into the fund that will be available for municipalities to apply to for the repair, rehabilitation and expansion of core water, wastewater and stormwater projects that promote growth and enable housing development.” The province says the new fund will complement its recently announced “building faster fund,” a $1.2-billion purse over three years available to municipalities to help them reach housing targets set by the province.

RENTAL HOUSING

As previously announced, the province is scrapping its portion of the harmonized sales tax on new purpose-built rental housing construction. Ontario had been asking the federal government to drop its goods and sales tax on purpose-built rental housing for more than a year. The federal government did that in September and Ontario has officially joined them in an effort to spur construction in the rental housing market.

Files from The Canadian Press were used in this report