November 4, 2021 – With only 209 days until Ontario voters head to the polls, there is an unmistakable shift in focus at Queen’s Park ahead of next year’s June 2022 election.
For the Ford government, every day before the formal kick-off to a campaign represents a crucial opportunity to communicate their re-election message to voters across the province. That message is that the Premier says “yes” to progress, workers and Building Ontario.
This afternoon, Finance Minister Peter Bethlenfalvy unveiled a crucial puzzle piece by delivering a highly-focused Fall Economic Statement (FES) that lays out a better-than-anticipated state of the province’s finances.
The FES contains a deficit figure of more than $11.6 billion below what was originally projected in the 2021 budget, with a 2021-2022 deficit of $21.5 billion. This almost $12 billion deficit reduction coincides with an almost $12 billion increase in tax revenue resulting from an economic recovery as Canada and Ontario rebounded from the global pandemic.
The 2021 Ontario Economic Outlook and Fiscal Review is entitled Build Ontario and lists the Ford government’s three priorities:
- Protecting Our Progress
- Building Ontario
- Working for Workers
Today’s Fall Economic Statement zeroes in on those areas of investment anticipated to be key to the Premier’s election pitch: health care, broadband, developing northern and rural Ontario and transportation and transit infrastructure.
Today’s document also indicates where the Ford Government will spend its political capital. While both opposition parties claim that funding for Highway 413 and the Bradford Bypass are motivated by political ambition, Finance Minister Bethlenfalvy pushed back by saying that “the Liberals and New Democrats are fixated on downtown activists instead of suburban commuters.”
In saying that “it is time to get the 413 built”, the Ford Government is foreshadowing their re-election plan and areas of political focus in the suburban 905-area code.
Preceding today’s unveiling, the Ford government announced a series of key actions in the areas of greatest sensitivity for the government ahead of its re-election campaign: long-term care and worker rights. These new announcements were featured prominently in Bethlenfalvy’s pitch today, and include:
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- Raising Ontario’s minimum wage to $15/hour, removing the special lower minimum wage for liquor servers and ensuring that minimum wage rates rise annually with the cost of living;
- Introducing new legislation, the Providing More Care, Protecting Seniors, and Building More Beds Act, 2021 to create a new legislative framework for long-term care in Ontario and introducing a suite of accountability measures for both long-term care and retirement homes;
- $169 million for a further extension of temporary wage enhancement for PSWs and direct support workers until March 31, 2022;
- Up to $100 million for an additional 2,000 nurses to the long-term care system in Ontario through direct support for PSWs and Registered Practical Nurses (RPNs) looking to upskill to become RPNs and Registered Nurses (RNs), respectively; and
- $20 million to hire 193 new long-term care inspectors and launch a new, annual proactive inspections program.
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Priority Highlights
In addition to measures previously introduced, the Ford government’s FES highlights include:
Protecting People’s Health includes:
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- $342 million to strengthen the nursing workforce by adding and upskilling over 5,000 RNs and RPNs and 8,000 PSWs
- $57.5 million, beginning in 2022-23, to hire 225 nurse practitioners in the long-term care sector
- An additional $548.5 million over three years to expand home and community care to support post-acute surgical patients and patients with complex health conditions
- $5.1 billion, since the start of COVID-19, including $1 billion in 2021-22 to support hospitals
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Protecting Seniors includes:
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- $72.5 million over three years to increase enforcement capacity, including hiring 156 additional inspectors by 2022/23, which will double the number of inspectors across the province
- Planning to invest an additional $3.7 billion, beginning in 2024-25, to build an additional 10,000 net new long-term care beds and upgrade over 12,000 existing beds; this will meet the commitment to build 30,000 new long-term care beds by 2028
- Providing $22 million over three years to implement an Ontario-made technology that will integrate the clinical information between hospitals and the long-term care sector
- Proposing to extend the Seniors’ Home Safety Tax Credit by one year to 2022 to provide an estimated $35 million in additional support to about 32,000 people, or $111 on average, up to a maximum of $2,500
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Protecting People includes:
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- Investing $12.4 million over two years, starting in 2021-22, to continue access to existing and expanding mental health and addictions supports for health and long-term care workers
- Providing an additional $8.7 million in 2022-22 to increase mental health supports at public colleges and universities and Indigenous institutes
- Building on $153 million invested since the start of the pandemic, an additional investment of $11 million in 2021-22, to help retirement homes through COVID-19
- Building on previous investments of $131 million, investing an additional $8.9 million in 2021-22 for COVID-19 supports in congregate care settings
- Investing more than $1.6 billion in resources to protect students and staff from COVID-19 in the 2021-22 school year
- Committing $1.6 million over three years to create a database of volunteers who will receive training to respond to emergencies
- Working with Indigenous partners by providing an additional $10 million, for a total of $20 million over three years, to support reconciliation through the identification and commemoration of Indian Residential School burial sites
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Building Transit and Transportation
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- Allocating $2.6 billion for 2021-22 to expand and repair highways and bridges, and committing funding to advance the Bradford Bypass and Highway 413
- Investing $474 over a five-year period to address large bridge rehabilitation projects in southern Ontario
- Investing an additional $345 million in 2021-22 in municipal transit systems, in addition to the $17 billion already committed for four new subway projects in the GTA
- Total of $28.5 billion for subway expansion, with the all-new Ontario Line, Scarborough Subway Extension, the Yonge North Subway Extension and the Eglinton Crosstown West Extension
- Committing $5 million for feasibility work for a proposed service route to improve transportation in northeastern Ontario
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Supporting the Ring of Fire
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- Proposing amendments to the Far North Act, 2010 that would retain provisions that allow for joint land-use planning with Far North First Nations
- Committing close to $1 billion to support the planning and construction of the road to the Ring of Fire and related projects
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Building Hospital Infrastructure
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- Investing $30.2 billion over the next 10 years in infrastructure to increase capacity in hospitals, build new health care facilities and renew existing hospitals and community health centres
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Building Community Infrastructure
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- Doubling the Ontario Community Infrastructure Fund with an additional $1 billion, bringing the total to nearly $2 billion over the next 5 years
Building More Homes - Establishing a Housing Affordability Task Force
- Doubling the Ontario Community Infrastructure Fund with an additional $1 billion, bringing the total to nearly $2 billion over the next 5 years
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Working for Skilled Workers
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- Proposing to extend the Ontario Jobs Training Tax Credit by one year to 2022, providing an additional $275 million
- Investing an additional $90.3 million over three years to enhance the Skilled Trades Strategy
- Investing an additional $5 million in 2021-22 to expand the Second Career Program to extend support to newcomers, gig workers and people with disabilities
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Women and the Economy
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- Establishing Ontario’s Task Force on Women and the Economy to address the disproportionate barriers women face
- Committing funding for the Investing in Women’s Future program to offer free training to women facing multiple barriers to employment
- Investing $5 million over two years in targeted supports with the Racialized and Indigenous Support for Entrepreneurs (RAISE) Grant
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Working for Economic Growth
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- Establishing $10.1 billion in cost savings and supports for businesses in 2021, including $6.3 billion for small businesses
- Launching a Small Business Digitization Action Plan to help small businesses leverage online platforms
- $40 million over the next two years to enhance Digital Main Street
- $10 million over the next two years to create a Small Business Digitization Competence Centre
- Investing $25 million over three years in a new Strategic Agri-Food Processing Fund to enhance processing capacity and food security in underserved areas
- Creating jobs by securing investment commitments of $5.6 billion from major auto manufacturers for electric vehicle supply chain capacity
- Proposing an Ontario Staycation Tax Credit that would provide $270 million in total support for accommodation expenses for travel within Ontario in 2022, including up to $400 in savings per family
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Additional Working for Economic Growth Measures will include:
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- Creating a $40 million Advanced Manufacturing and Innovation Competitiveness stream of the Regional Developmental Program over two years to help businesses improve competitiveness, growth and job creation
- Building Northern communities and jobs by supporting sustainable biomass and the forest sector while protecting electricity consumers
- Expanding the Aboriginal Loan Guarantee Program envelope to $1 billion to support Indigenous investments in electricity infrastructure
- Investing $1.5 million over three years to support the Francophone Business Network and create a Francophone business incubator
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Economic and Fiscal Highlights
Although the provincial deficit remains high, at $12.5 billion more than the government’s pre-pandemic forecasts, lower-than-anticipated pandemic expenditures and improved tax revenue from a strengthening economic recovery contributed to some positive forecasts for the government.
The provincial deficit now stands at $21.5 billion, a decrease of $11 billion from the amount forecast in the 2021 Spring Budget.
Remaining consistent with the recent Speech from the Throne, the Fall Economic Statement forecasts that economic growth, rather than tax increases or spending cuts, will drive an improving deficit forecast. The current projection for fiscal year 2022-23 is now $19.6 billion, and fiscal year 2023-24 is projected at $12.9 billion, compared to $27.7 billion and $20.2 billion as outlined in Budget 2021, respectively.
The Fall Economic Statement pays heed to continuing economic headwinds. Despite a steady re-opening and improving labour market, due to the COVID-19 pandemic the economic recovery remains uneven for many Ontarians, especially those in hospitality, grape and wine and tourism-related sectors.
Inflation will continue to be a concern in the near-to mid-term, driven particularly by ongoing supply chain issues related to economic disruption caused by the pandemic. Consumer price inflation is projected to ease from 3.1 per cent in 2021 to 2.6 per cent in 2022, and is projected to return close to the Bank of Canada’s inflation target of 2.0 per cent in 2023 and 2024.
What Comes Next?
With both the Throne Speech and the Fall Economic Statement in the rearview mirror, the Ford government and opposition parties alike will be laser-focused on setting the stage for the upcoming election.
During the months ahead, watch for the Ford government to announce major commitments to check the box on delivering progress on important mandates from the 2018 campaign as well as priorities that are well-aligned with their election pitch.
Case in point: the recent introduction of worker protection legislation by Minister of Labour Monte McNaughton. The focus of this legislation and the firm language used by the government – much more streamlined recognition of foreign credentials and experience in regulated professions, cracking down on predatory temporary help agencies, banning the use of most non-compete clauses in employment contracts – may seem like an unusual fit for a PC government.
It is, however, well-aligned with the “For the People” populist message that Premier Ford aims to take back to the voters in the spring, of a government that protects the “little guy” (whether a worker or small business) while creating the conditions for broad-based economic prosperity.
The opposition parties will be working furiously over the same period to raise questions and cast doubt about that argument in the minds of voters. The Ford government will likewise be working to implement the right mix of policies to assemble the coalition of voters they need to secure a second mandate.
Whatever outcome ultimately transpires, we can expect a lot of action at Queen’s Park in the months to come.
2022 Budget Consultations
With this Fall Economic Statement and the 2022 election, preparation now begins for the Spring 2022 Ontario Budget. Consultations will soon begin, and Counsel Public Affairs will keep you posted on consultation timelines.