Many Ontarians believe the Liberal government combined fiscal restraint with targeted new spending in its May 2 budget in an attempt to preserve Premier Kathleen Wynne’s minority government.
However, with Conservatives categorically rejecting the document and the NDP still on the fence, Ontarians won’t know if they are heading back to the polls until after a budget vote, which is expected to take place two or three weeks from now.
The $128-billion budget predicts a 2012-13 deficit of $9.8 billion, $5 billion less than the 2012 budget forecast. The province is projecting an improvement of more than $1 billion from the $12.8 billion deficit projected in the 2012 budget for 2013-14. Program spending in 2013-14 is unchanged from the 2012 budget projection.
The government says it is on track to meet the steadily declining deficit targets outlined in the 2012 budget and achieve a $0.5-billion surplus in 2017-18.
Highlights of the 2013 budget include:
– $35 billion in infrastructure spending over the next three years, including a previously-announced $100 million for roads and bridges in small rural and northern municipalities;
– $295 million over two years on a youth job program;
– $260 million on boosting access to home care;
– recipients of Ontario Works and the Ontario Disability Support Program will be allowed to keep the first $200 in employment earnings before clawback provisions kick in; and
– a proposal to make the two cent per litre gas tax the province transfers to municipalities for public transit, permanent.
Guelph MPP Liz Sandals cautioned that programs outlined in the budget still require approval and the Liberal government is hoping that will come from the NDP under Andrea Horwath. Conservative leader Tim Hudak has already indicated his party will oppose the budget.
Sandals said if the budget is approved the $100 million in infrastructure funding will go to rural municipalities in need of money to build concession roads and bridges.
“The concern from a lot of small municipalities is they don’t have the tax base to maintain roads,” she said.
Sandals, who is the province’s education minister, said the program is similar to funding that provided a $610,000 grant for work on the Benham Bridge in Guelph-Eramosa.
Criteria to apply for funding will be that the municipality has drawn up an inventory it wants to get funding for before an application can be submitted. The infrastructure money will not replace the previous connecting link program that provided funding for provincial roads going through municipalities.
“That will be at risk if the budget isn’t passed,” Sandals said of the infrastructure funding proposed in the budget.
The budget also calls for upgrades to colleges and universities as part of the $35 billion.
According to Sandals the $295-million youth program could be used for job training, apprenticeship programs and wage subsidy programs companies could use to train workers.
“We have done a number of things the NDP said they wanted,” Sandals said of efforts to get the NDP to support the budget.
Those include boosting home care access and reducing car insurance costs by 15 per cent.
The Liberal government is hoping budget approval will be in place to allow for its announced programs to roll out by July.
Wellington County Warden Chris White, who was at the Legislature when the budget was put forward, said he welcomes the $100 million in infrastructure funding announced by the Liberal government.
However, White said he is looking for more long-term funding, similar to a 10-year infrastructure program, including gas tax funding, announced in the last federal budget.
“We appreciate the money we’re going to get,” White said. “We (municipalities) would like to see sustainable, long-term funding.”
The warden added, “The federal gas tax is a godsend that allows us to plan out for a long time. We need the province to duplicate that in some shape or form.”
Hudak stated even before the budget was tabled on May 2 that his party would not be supporting it. He stuck to his guns and called for an election after the document was presented.
“The only way to put Ontario on the right track is a new team with a new plan and the courage to put it into action,” stated a post-budget press release issued by Hudak’s office.
“Too many people in Ontario are having trouble finding work and losing hope in our great province,” Hudak said. “Yet today the Liberal government chose to continue down a path that will only dig the hole deeper for Ontarians.”
The Conservatives stated their plan includes “ideas to fix labour laws to compete for jobs, lower taxes, control energy rates and lead a government that spends within its means.”
Left holding the balance of power in the upcoming confidence vote on the budget, Horwath said she plans to seek input from Ontario families before deciding whether to support the budget.
“We will be consulting with Ontarians, because families need to have their say on this budget, and how to make it work for them,” stated Horwath following the release of the budget.
“We want to bring accountability to this budget, and ensure that public dollars won’t be wasted like they were on eHealth, Ornge and the gas plants.”
The NDP had put forward a series of proposals on youth job creation, reducing waiting times for home care and lowering auto insurance rates by 15 percent over the next year.
Howarth’s post-budget press release states the budget “addressed some of these key issues but the lack of timelines and firm commitments make it far from clear that the added investment will deliver the promised results for families.”
Conservative Perth-Wellington MPP Randy Pettapiece says the budget’s main purpose is to “help the Liberals stay in power by winning over the NDP.
“By giving in to the NDP, this government did not take the long view; it took the short-term, political view,” he said. “And when it comes to the debt, the Liberal record is terrible.”
Pettapiece told the Wellington Advertiser Ontario’s debt is growing at an unsustainable rate. He said in 2003 Ontario’s debt load represented $10,000 or $11,000 per person.
“And now we’re around $20,000 and that’s scary,” he stated.
Pettapiece said his party had no choice but to oppose the budget after the Liberals declined to include proposals offered by their leader in pre-budget meetings with Wynne.
“He met with the premier and asked her to include some of our ideas … but she wanted nothing to do with that,” he said.
Wellington-Halton Hills Conservative MPP Ted Arnott accused the government of veering to the left to “secure the support of the NDP.”
“The lead up to the last two budgets have been political auction sales,” Arnott said in a News release.
“The Liberals have been throwing around money to buy the support of the NDP with little regard to the fact that it’s borrowed money.”
The MPP contends “that the hundreds of millions of dollars wasted on the gas plant scandal has destroyed whatever credibility the Liberal government might have left.”
It’s estimated it cost more than $500 million to scrap gas plants under construction in Mississauga and Oakville by the Liberal government. Allegations are the decision was intended to save two Liberal seats in the ridings prior to the last election.
Arnott said the budget shows the Liberals are not interested in addressing the overall provincial deficit and spending.
“They’re showing that they just don’t get the seriousness of the debt and deficit problems that Ontario is facing,” he added. “This is a government that is borrowing $1.3 million an hour, 24 hours a day, seven day a week. In their 10 years in office, they have doubled the size of the provincial debt.”
Pettapiece said the inclusion of an NDP demand for a 15 per cent cut in auto insurance rates, which the Liberals promised without setting out a timeline for, was done without proper industry consultation.
“I’d like nothing better than to have lower auto insurance rates. But to just pull a number out of a hat like Ms. Horwath did, and the government bought into it, I think that’s wrong.”
Pettpapiece said insurance fraud is one of the biggest factors in insurance rates and controlling it needs to be part of any rate reduction plan.
However the Insurance Bureau of Canada (IBC) states proposals do link cost reductions with lower premiums and is calling on the NDP to support the budget.
“The government is proposing to tackle auto insurance fraud, transform the dispute resolution system and base benefits on medical evidence,” states a May 2 press release from the IBC.
“We are calling on the NDP to support quick passage of the budget bill in the legislature and at committee. Making unnecessary amendments will only delay drivers from realizing savings,” said Don Forgeron, IBC president and CEO.
The IBC says the budget also commits the government to look at additional cost saving measures, such as provincial oversight of towing, and amending the definition of catastrophic impairment in the Statutory Accident Benefits Schedule.
“Also encouraging is the government’s commitment to have an independent annual review of the system with a view to further reforms,” the bureau states.
The budget also received cautious support from some business and labour leaders in the province.
“There are good things in this budget that I think we can work with in labour, that I think the NDP can work with … Don’t go pulling the plug just to be politically opportunistic at this moment in time,” said Ontario Federation of Labour president Sid Ryan.
Warren Thomas, president of the Ontario Public Service Employees Union, stated, “Hats off on the insurance thing – if they can give everybody a little break on car insurance that’s a good thing.”
Santinder Chera, Ontario vice-president of the Canadian Federation of Independent Business, stated, “We saw some positive measures in today’s budget, one being increasing the threshold for the employer health tax.
“We also saw some language in the budget regarding pooled retirement pension plans. We are certainly grateful that the government is moving forward and consulting to make that a reality in Ontario.
Meanwhile, Todd Moser, vice-president and general manager of Rothsay, a Wellington County rendering operation, stated, “We are pleased to see Ontario working towards a minimum renewable fuel standard for diesel fuel marketed in the province.”
“A mandate would help ensure Ontarians realize not only the strong economic benefits, but also the environmental advantages that come from burning a cleaner more sustainable fuel in the most populous and traffic congested region of Canada.”
The Canadian Taxpayers Federation (CTF) gave the budget a “barely passing” grade, acknowledging modest payroll tax cuts and spending reductions in several departments, while criticizing the overall failure to stop the growth of spending and control the growing deficit.
“This budget fails to rein in spending in any meaningful way,” said CTF’s Ontario Director Candice Malcolm in a press release. “Ontario needs some tough medicine, and instead, this government caved to NDP demands with targeted hand-outs to special interests and continued growth in both spending and borrowing.”
Provincial leaders of municipal associations were pleased with the announcements on infrastructure.
Russ Powers, president of the Association of Municipalities of Ontario, said, “All governments – federal, provincial and municipal – need to work together to make infrastructure investments that promote safety and economic prosperity.
“The municipal property tax base cannot support the level of investment that’s needed and the demand exists right across Ontario. The budget is on the right track by investing in urban, rural and northern communities.”
Rural Ontario Municipalities Association chair Bill Vrebosch added, “The $100 million being dedicated to rural and northern is exactly what we’ve [wanted] for years. A separation of the money to make sure that rural and northern get a fair share.”
Sandals concluded, “I think with what we’ve got we’ll still meet our different targets and get our balanced budget.”
