Toronto, Queen’s Park: Ontario Finance Minister Rod Phillips released the province’s 2020-2021 First Quarter Finances at Queen’s Park today, August 12, 2020. The Minister also offered an update on Ontario’s Action Plan: Responding to COVID-19.
Speaking to the very real risk of a second wave of COVID-19, Minister Phillips offered a grim yet responsible economic update, pledging to maintain the Province’s ability to safely support people and employers.
Due to the impact of and response to COVID-19, it was revealed that the province’s deficit this fiscal year will nearly double from the government’s March forecast to a record $38.5 billion, with revenue dropping by $10.7 billion. Specifically, the Minister outlined that Ontario’s response to COVID-19 is estimated to have thus far cost the province $30 billion, a significant increase from the $17 billion announced in March.
The jump in the deficit was not surprising given the deepening extent of the COVID-19 pandemic since March and the Ford government’s commitment, along with its federal and provincial counterparts, to undertake dramatic measures to help manage the health and economic fallout.
Flanked by his Parliamentary Assistant Stan Cho, Minister Phillips acknowledged that Ontario’s current financial situation is not sustainable over the long term but is necessary in order to safely and responsibly manage a provincial and global health crisis.
While a deficit of this magnitude would be a lightning rod in ordinary times, it will attract little controversy in today’s circumstances. If anything, the opposition parties will be critical that not enough has been spent to help individuals and businesses.
Phillips also re-iterated his commitment to introduce a multi-year Budget to the Ontario Legislature by no later than November 15 of this year. Ontario’s 2020-21 Budget, originally slated to coincide, as usual, with the start of the province’s fiscal year in April, was delayed as the government focused on responding to the rapidly accelerating pandemic.
Minister Phillips did not shy away from acknowledging the fiscal challenge ahead, noting that “responsible stewardship of taxpayer’s dollars is in our government DNA.” Phillips’ praised the 14.5 million people across the province who have collectively contributed to slowing down and managing the pandemic.
Acknowledging a long road to economic recovery, Phillips vowed that the Ford Government will safely get people back to work, provide relief for families and reopen the economy.
Today’s announcement further amplified themes that the Ford Government has focused on for the past several months: public health, jobs and economic recovery. These commitments included:
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- An increase of $4.4 billion for a total of $7.7 billion to health care: ongoing support to build hospital capacity, prevent and contain the spread of COVID-19 in long-term care homes, ramp up testing and purchase personal protective equipment and critical medical supplies.
- An increase of $7.3 billion for a total of $11.0 billionto support people and jobs: investments in a temporary pandemic pay for more than 375,000 eligible frontline workers totalling over $1.5 billion, $4 billion in targeted funding to help municipal partners and transit agencies to continue to deliver critical services, and temporary immediate relief for residential, farm, small business, industrial and commercial electricity consumers.
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The Government’s anticipated $13.1 billion increase in spending since March includes:
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- $176 million: for 24/7 off-peak electricity pricing for consumers
- $218 million: for Long-Term Care, specifically to protect staff and increase sector capacity
- $241 million: towards the Canada Emergency Commercial Rent Assistance program for small business
- $610 million: for personal protective equipment (PPE) for healthcare workers
- $1.5 billion: towards the retroactive temporary pandemic pay program (with $424 million committed from the province and $1.1 billion from the federal government)
- $2.4 billion: for transit and municipalities (coupled with $1.7 billion from the Safe Restart program and agreement with the federal government)
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Additionally, Premier Ford announced today that Ontario will be providing Ontario’s 444 municipalities with up to $1.6 Billion in a first round of emergency funding under the Safe Restart Agreement.
During his usual afternoon press conference, Premier Ford stated that “this first round of funding will address the most urgent needs of our communities, ensuring critical services like transit and shelters are there when people need them most.”
During a day filled with announcements, the Ford Government also announced it will be spending $212 million as part of the Social Services Relief Fund. This money, as part of the $510 million emergency fund, will help protect vulnerable people from COVID-19.
This provincial investment is meant to help protect residents and staff in homeless shelters, expand rent support programming and create longer-term housing solutions.
Phillips promised an ongoing, prudent and responsible approach to managing Ontario’s finances in the global pandemic, sharing that he and Premier Ford firmly believe that putting public health first saved lives and was smart economic policy.
For those wishing to watch a recording of Minister Phillips’ announcement, please visit the Government of Ontario’s YouTube channel:
https://www.youtube.com/c/GovernmentofOntarioAnnouncements
Counsel will continue to monitor the state of Ontario’s finances and its impacts on your industries and families.