Five things you should know about Ontario’s fall mini-budget

ANALYSIS: Finance Minister Peter Bethlenfalvy presented the fall economic statement on Thursday. Here’s what it has to say about deficits, transit, and more
By John Michael McGrath - Published on Nov 04, 2021
Ontario’s minister of finance, Peter Bethlenfalvy, unveils the province’s fall economic statement in the legislature on November 4, 2021. (YouTube/ Government of Ontario Announcements)

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Minister of Finance Peter Bethlenfalvy rose in the legislature Thursday afternoon to present Ontario’s fall economic statement — a “mini-budget” that lays out the government’s spending priorities for the coming years, though not as comprehensively as the document presented at the beginning of the fiscal year. The 2021 FES contains multiple measures organized according to three themes: “Protecting Our Progress” (investing in health-care and long-term care and continued COVID-19 measures); “Building Ontario” (large investments in highways, transit, and other infrastructure); and “Working for Workers” (a minimum-wage increase, extended supports for workers in the skilled trades, and a new tax credit intended to encourage domestic tourism).

Here’s a rundown of some of the more detailed items from Thursday’s fall economic statement:

1. Big deficits, but not as big as projected in the spring

The FES is fundamentally an update on the government’s finances, and the province’s finances don’t look quite so bleak as they did at the beginning of the year. Deficits that were originally projected to be as high as $33.1 billion at the beginning of this fiscal year are now expected to come in at $21.5 billion; in two years’ time, they are now projected to be $12.9 billion (compared to overall government spending of just under $190 billion). The previously announced improvement in the government’s financial position is due largely to an increase in federal transfers and supports for businesses and individuals. The province’s future outlook depends enormously on the strength of the economic rebound post-pandemic: by 2024, the Ministry of Finance projects that the deficit could be as low as $4.5 billion or as high as $19.3 billion.

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2. Yes, highway spending — but even bigger transit spending

The Progressive Conservative government is clearly making highway spending a pillar of its bid for re-election in 2022. The government is committing in the FES to building both the controversial Highway 413 and the Bradford bypass. The government isn’t saying how much these projects will cost, but the likely price tag is in the billions of dollars. Highway 413 will have to face federal scrutiny under the Impact Assessment Act, a level of review that no Ontario highway has faced before. And neither project will be so far along by the next election that they couldn’t, potentially, be cancelled by a new government (all opposition parties have pledged to kill the 413).

But voters shouldn’t miss the near-total change in spending priorities that has occurred in Ontario, either: for every dollar the FES dedicates to highways this year, the government is pledging to spend two dollars on transit: subways, GO trains, light-rail projects. The outlook over 10 years is even more dramatic: the province is proposing to spend nearly three times as much on transit projects as on provincial highways ($61.6 billion versus. $22.9 billion) and double what it plans to spend on hospitals ($30.4 billion).

3. Changes in the far north?

Every year, for a decade, under two parties, the government has promised to bring new prosperity and jobs to the province’s far north by investing in the Ring of Fire, a nickel and chromite deposit north of Thunder Bay that is currently inaccessible by road or rail. This year’s budget (and now the FES) are no exception. What is new in the FES are proposed changes to the Far North Act, which governs land-use planning and resource extraction in the province’s north. While the legislative text of the bill won’t be public until later on Thursday, the government says that the changes will increase the potential for new resource extraction in the north: “Example of significant legacy infrastructure projects that would benefit from the changes are the all-season roads for First Nation communities and mineral development opportunities in the Ring of Fire.” The government describes these moves as part of its plan to help provide critical minerals for the electric-vehicle sector and for other technologies but asserts that development will be done in collaboration with First Nations.

4. Tax credits for workers, seniors, and … staycations

During the COVID-19 pandemic, the Ontario government introduced a number of tax credits to help workers either retrain or improve their skills in a difficult job market. It also introduced a tax credit for senior citizens to help them age in their own homes or move in with family caregivers — covering renovation costs for such things as creating a new ground-floor bedroom and making bathrooms safer. Both of those tax credits (the Ontario Jobs Training Tax Creditand the Seniors’ Home Safety Tax Credit) are being extended into 2022.

In addition, the government is introducing an Ontario Staycation Tax Credit, intended to encourage Ontarians to travel within the province starting January 1, 2022.  The tax credit would refund 20 per cent of the costs of accommodation — hotel rooms, campsites, and cottage rentals, for example, would be eligible — up to $1,000 for an individual and up to $2,000 for a family, for a maximum credit of $200 or $400, respectively. People will be able to claim the tax credit when they file their 2022 taxes (so, in the spring of 2023). As it’s a refundable tax credit, even individuals who don’t have an income high enough to owe provincial income taxes will be able to claim it.

5. It could get harder to launder money in Ontario​​​​​​​

Buried at the back of the FES is an announcement that the government will now require privately held corporations to report “beneficial ownership information” to the province’s financial regulators. This is a measure numerous other provinces have adopted as a way of fighting money-laundering and other financial crimes; the federal government has started developing its own version. Starting January 1, 2023, individuals who own at least 25 per cent of a privately held company or otherwise have a direct or indirect influence over the corporation would need to provide their name, date of birth, address, and more.

Anti-corruption activists have been calling for this kind of beneficial ownership  information for years. British Columbia’s expert panel on fighting money laundering recommended collecting it, and doing so has been part of B.C.’s efforts to tamp down on the spiralling cost of housing by making it harder to hide money in anonymous numbered corporations.

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