Ontario Budget 2023: A Budget for Uncertain Times

The Ford government released its 2023 Fiscal Plan with very little of the “pre-conditioning” announcements that have been de rigueur for governments of all stripes the last two decades. Indeed, until yesterday morning’s papers, there’s been nary a whisper, hint or smoke signal as to what Finance Minister Bethlenfalvy had in store for Ontarians. 

Well, it’s hard to showcase something new and novel when you are attempting to keep the powder dry and options open in uncertain economic times. Indeed, with record inflation (the highest in decades), very recent financial sector turmoil in the US and in Europe, the economic impacts caused by Russia’s aggression in Ukraine, and other factors, 2023 will be murky for governments to navigate. Indeed, the Finance ministry projects that real GDP growth will be an extremely meagre 0.2 percent for Ontario in 2023. While no recession is anticipated, real growth that low may feel like a recession for some segments of the economy. 

An experienced sea captain facing an uncertain storm will batten down the hatches and keep his/her options open; the same philosophy seems to be guiding the Ford government, which is ignoring the howls from Ontario’s NDP, Liberals and public sector unions. 

Despite the lack of key signature announcements, there are a few items worthy of note in this year’s Ontario Budget:

  • For the first time ever, Ontario’s annual Fiscal Plan will exceed $200 billion – an astonishing figure, even considering the impact that COVID has had on finances and the economy. To put this in perspective, at the end of the Kathleen Wynne era in 2018, Ontario’s budget was approximately $150 billion. Some critics may scream about the underfunding of everything, but it’s hard to see how stingy Ford is accused of being with such a precipitous increase in just five years.
  • The 2022-23 budget deficit will come in well below last year’s projections, falling to $2.2 billion, and projected to be $1.1 billion in 2023-24. This is on top of a $4 billion contingency fund that the Ford government has set aside as part of their fiscal planning. 
  • The Ford government is proposing a new Ontario Made Manufacturing Investment Tax Credit, which would provide a 10 per cent refundable Corporate Income Tax credit to help local manufacturers lower their costs, invest in workers, innovate and become more competitive. 
  • In addition to the new manufacturing investment tax credit, Minister Bethlenfalvy is launching a comprehensive review of Ontario’s tax system with a priority on ensuring long-term competitiveness. A tax review may also be an early signal of the Ford government’s intention to cut taxes (if the fiscal room allows), which some will see as an effort to shrink the size of government.
  • Investments of $184 billion in public infrastructure initiatives over 10 years is proposed, which will include: $27.9 billion for highway expansion and rehabilitation projects, including Highway 413, the Bradford Bypass, and the new Highway 7 between Kitchener and Guelph; $70.5 billion for transit, including continuing to transform the GO Transit rail network into a more reliable and fully integrated transit network, as well as transit investments in Toronto including the Ontario Line, the Scarborough Subway Extension, the Yonge North Subway Extension and the Eglinton Crosstown West Extension; and over $48 billion in hospital infrastructure over the next decade.
  • Health care spending is projected to increase approximately 5% annually, in part thanks to the recent agreement with the Federal government and investments by the Province. A series of measures are also included to increase the number of nurses, medical school placements, a further expansion of the role that pharmacists play in the health care system, and expanded mental health supports. 
  • While health care spending remains the number one program expenditure – by a country mile – the number four expenditure is debt servicing costs. For the upcoming fiscal year, Ontario will spend $14.1 billion on interest costs alone – more than is invested in Ontario’s post education system ($12.1 billion). 

While the Budget lacks an overall theme or showcase item, it is designed to provide as much flexibility as possible to confront some of the “stormy seas” that are on the horizon, which includes economic uncertainty, but also challenges from the public sector unions (including teachers, nurses, etc.). 

If you would like more information please contact Chris Holz at: chrish@campbellstrategies.com

Visit our website at: www.campbellstrategies.com.

Related Blog Posts

Sometimes It’s Not Just a By-election…

We Won, They Lost No one was more surprised by last night’s victory than my fellow Conservatives. When St. Paul’s boundaries were redrawn 1996 the…

Read More >: Sometimes It’s Not Just a By-election…

Perspectives on Federal Budget 2024

Budget 2024: Lots of Everything all at Once Barry Campbell There is always a political calculus behind a Budget. Where a government is in the…

Read More >: Perspectives on Federal Budget 2024

An Open Letter To Canada’s Political Leaders

On April 2, the Globe and Mail, Canada’s national newspaper, published a letter written by Barry Campbell and signed by 50 prominent Canadians calling on…

Read More >: An Open Letter To Canada’s Political Leaders

Ontario Budget 2024 Analysis

Ford government shifts course with $214 billion to deal with political and economic challenges  Finance Minister Peter Bethlenfalvy presented the 2024 Ontario Budget with a…

Read More >: Ontario Budget 2024 Analysis

The Cognitive Dissonance of the 2023 Fiscal Update

Not so very long ago when “Fall Economic Updates’” were added to the Parliamentary calendar, these short “Updates” on the fiscal situation heralded a new…

Read More >: The Cognitive Dissonance of the 2023 Fiscal Update

Let’s try this again: The Ford Government’s Second Cabinet Shuffle

There has been a fair amount of turmoil in the Ontario Ford government the last few weeks, and certainly the last 48 hours, with the…

Read More >: Let’s try this again: The Ford Government’s Second Cabinet Shuffle

Cabinet Jenga on The Rideau

Refashioning a Cabinet mid-way through a Government’s mandate is not unlike a game of Jenga. Something’s gotta give to get things moving: a retirement, a…

Read More >: Cabinet Jenga on The Rideau

The Toronto Mayoral Election That Was: An Analysis

 One day after the New York Times wrote a piece saying that Toronto had gone from ‘a city that works’ to a ‘city in crisis’…

Read More >: The Toronto Mayoral Election That Was: An Analysis

Toronto’s Mayoral Race: Good Morning, Toronto

Next Tuesday morning Toronto will awake to a new mayor. And, if all the polling is accurate, that mayor will be Olivia Chow. The notion…

Read More >: Toronto’s Mayoral Race: Good Morning, Toronto