The Ontario government 2020 budget was unveiled today using three pillars to define how $45 billion will be spent over three years to support Ontarians and set the province on its path to economic recovery.
This three-pillar plan, Ontario’s Action Plan: Protect, Support, Recover, is the latest phase of Ontario’s response to impacts of COVID-19 by providing access to critical health resources; delivering programs to support individuals, families, and jobs creators; and laying the foundation for Ontario’s economic recovery.
Here is the breakdown and details on each spending area.
Pillar: Protect
Ontario’s pandemic health response is projected at $15.2 billion. Ontario Finance Minister Rod Phillips said: “We are making available every necessary resource to keep people safe, including our loved ones in long-term care and our frontline health care heroes during the second wave and beyond.”
The funding includes:
- Making $4 billion available in 2021-2022, including $2.8 billion to support the province’s Fall Preparedness Plan for Health, Long-Term Care and Education, as well as additional funding to support hospital beds, address surgery backlog, and purchase additional flu vaccines.
- Making $2 billion available in 2022-2023 to help the province continue to effectively respond to the changing needs in the fight against COVID-19.
- Investment of $572 million in Ontario hospitals to help support and supplement the costs of COVID-19 (e.g. costs for medical equipment and PPE).
- Investment of $18 billion in grants over 10 years to build, expand, upgrade, and modernize hospitals across Ontario.
- Providing over half a billion to support long-term care facilities by enabling necessary renovations and health measures to improve infection control, purchase PPE, and build a strong workforce.
- Increasing hours of direct care for long-term care residents from 2.75 to an average of four hours per day over the next four years.
Pillar: Support
Phillips said the government will provide new support to those who have been hardest hit, including parents, seniors, and small business owners. Ontario will deliver an estimated $13.5 billion, including $2.4 billion in new initiatives, to support Ontarians through the second wave of COVID-19 and onwards. This includes:
- Provide parents with $200 per child under age 12 and $250 for children with special needs ages 21 or younger. Families with three young children, one of whom with special needs, will receive $1,300 in 2020.
- A new Seniors’ Home Safety Tax Credit for the 2021 tax year that will provide 25 per cent credit on eligible renovations of $10,000. Seniors are eligible regardless of income or taxes owed and family members who have a senior living with them will also be eligible.
- $300 million in relief for businesses in modified Stage Two and for businesses in areas categorized as Control or Lockdown under the new COVID response system, going forward.
- $60 million over three years in the Black Youth Action Plan to create help support Black Youth in achieving social and economic success.
- $100 million over two years in the Community Building Fund to support tourism, cultural, and sports organization struggling financially due to COVID-19.
- A one-time emergency funding of $25 million to art institutions to help cover losses due to COVID-19.
- $1.8 billion for the Support for People and Job Fund
Pillar: Recover
Phillips said the government has a responsibility to remove barriers to the growth necessary for job creation. “The cost if Ontario falls behind while the rest of the world recovers is simply too high. We can’t afford to wait,” he said.
The government said it will invest $4.8 billion to support jobs now and lay the foundation for economic recovery in the future. This includes:
- An additional $680 million, bringing Ontario’s investment to $1 billion, over the next four years to improve broadband and cellular access and fund broadband projects across Ontario
- Create more jobs in Ontario and addressing high electricity costs making it hard to keep businesses open. It will invest $1.3 billion over three years to help save medium-sized and larger industrial and commercial employers approximately 14 and 16 per cent, on average, on their electricity bills.
- Reduction of property tax and lowering high Business Education Tax (BET) for over 200,000 employers, to a rate of 0.88 per cent. This will create $450 million in savings.
- Providing small businesses as much as $385 million in tax relief by 2022-2023. This will be done with a proposal that will allow municipalities the ability to cut property tax for small businesses and a provincial commitment to match reductions.
- End a tax on jobs for an additional 30,000 employers by proposing to make permanent the Employer Health Tax (EHT) exemption increase from $490,000 to $1 million. With this additional relief, about 90 per cent of employers would pay no EHT, saving them $360 million in 2021-22 that could be reinvested in jobs and growth.
- Provide Ontario residents with the support of up to 20 per cent for eligible Ontario tourism expensive to encourage safe discovery and travel within Ontario in 2021.
- Investing $180 million over 3 years to help workers in the tourism and hospitality sector and other sectors affected by the pandemic to training and jobs. This includes a skilled trades strategy, an additional $100 million of dedicated investments through Employment Ontario for skills training, a redesigned Second Career program, and $59.5 million to acquire in-demand skills.
- Providing $500 million over four years to make government services more reliable, convenient and accessible through the Ontario Onwards Acceleration Fund.
The government is projecting a deficit of $38.5 billion for 2020-2021 and predicting declining deficits of $33.1 billion in 2021-2022 and $28.2 billion in 2022-2023. The government plans to present a new multi-year plan by March 31, 2021.
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