Deficits now, deficits tomorrow: Liberals propose big spending in pre-election budget

ANALYSIS: The Ontario government made its big-ticket priorities clear long before budget day — but there were still a few surprises in store, writes John Michael McGrath
By John Michael McGrath - Published on Mar 28, 2018
Finance Minister Charles Sousa delivered a 2018 budget speech at Queen’s Park on Wednesday afternoon. (Matthew O'Mara)

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​The Liberals have chosen to spend the province back into deficit — and keep spending for the foreseeable future. The deficit for the 2018-19 fiscal year will come in at $6.7 billion, and the government doesn’t plan to balance the province’s books again until 2024. That’s a dramatically different outlook from the one Finance Minister Charles Sousa offered in his fall economic statement last November: back then, the Liberals were telling the public that their next two budgets would be balanced.

The 2018 instalment of the provincial budget is filled with promises big and small — some of which were revealed in advance, and some that were more surprising. We examine the items we knew were coming — and some of those we didn’t expect.

Hospitals and prescription drugs

First up are the big-ticket items we anticipated — and the biggest ticket of them all is part of the health-care file. The government is expanding its OHIP+ program (which provides free prescription drugs to people under 25) to seniors, replacing the pre-existing Ontario Drug Benefit program. The expansion will cost an extra $1 billion. The province is also planning to spend an additional $822 million on hospitals in order to accommodate Ontario’s aging population.

Mental health

The government is investing $2.1 billion over four years to improve access to mental-health services, including access to publicly funded psychotherapy. The budget plans for up to 160,000 people with anxiety and depression to receive therapy they might not otherwise have had access to. The government also plans to make mental-health services available in every high school in Ontario.

Daycare

The Liberals are proposing to make licensed daycare free for children two and a half years old and up starting in 2020. The plan will cost $2.2 billion over three years, a figure that includes the cost of subsidizing fees and of creating new daycare spaces. The government says that free daycare will save families $17,000 per child.

But wait — there’s more: the full budget includes several other items that will affect Ontarians province-wide…

More drugs, plus dental care

In addition to expanding OHIP+, Liberals are proposing a new “Ontario Drug and Dental Program” that would offer dental and prescription-drug coverage (the latter for those between 25 and 65 years old) starting this summer. It will cover 80 per cent of drug and dental costs — up to $400 for individuals and $600 for couples — and will cost the government $800 million over two years. The proposed program will compete for voters with the more comprehensive plan the NDP put forward earlier this month (although Sousa denied on Wednesday the allegation that the proposal had been hastily cobbled together to respond to the New Democrats).

Cheaper GO service

People travelling anywhere inside the city Toronto or on short trips throughout the GTHA will now pay a much lower fare if they use their Presto card. Trips within the 416, as well as GO train excursions of 10 kilometres or less, will cost only $3. For many commuters who currently use the TTC to get downtown, it will be as cheap (and likely at least as enjoyable) to take the GO train instead. That won’t be an option for everyone, of course, but it could reduce overcrowding on the TTC’s sardine-can subways.

A page from the People’s Guarantee (RIP)

The government is also willing to talk with the City of Toronto about taking ownership of the TTC’s subway lines — if doing so “could provide better transit services for residents in the GTHA.” The Progressive Conservatives proposed something similar in the campaign platform they released last fall, the People’s Guarantee, under then-leader Patrick Brown. That document is now mostly a dead letter with new leader Doug Ford at the Tory helm.

Spreading the cash around

As in every budget, the 2018 document contains an array of regional spending priorities. There’s $120 million for a “food and beverages” economic fund, to help farmers and food processors; there’s an additional $30 million for forestry, to help keep and create jobs, primarily in the north; and in Kenora, London, and Toronto, new “community-justice centres” combine justice services with mental-health and social programs as part of an effort to find alternatives to incarceration.

Then there are a few small — but eye-catching — items to consider…

Net tuition billing

If you’re a university student, your tuition will now automatically come with your funds from the Ontario Student Assistance Program having already been deducted, which should make it easier for you to manage your finances. Currently, when students receive their OSAP assistance, they have to be sure to remit the money to their university or college themselves — a system that often creates paperwork headaches. Now, students will have only one bill to pay, and they’ll only have to pay the amount that’s outstanding after their student loans or grants have been deducted.

No pot windfall — yet

As predicted, the province is expecting to break even — at best — on cannabis sales this year. But that’s going to increase to $215 million by 2020, and if it turns out the government has been too conservative in its projections, pot could yet become a significant source of revenue for the province.


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