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 focus on making investments on “Building a Better Ontario” in three ways: significant infrastructure investments over the next decade, keeping costs down for people (or really, key voter segments), and better services for Ontarians. At a cost of $214 billion, it is one of the largest budgets in Ontario history.

The 2024 Budget is a departure from the Ford government’s fiscal plan which projected a $500 million surplus for this coming year; instead, the deficit will rise to just under $10 billion for 2024-25, in part because of the Province’s proposed investments (see further below), losing wage restraint court cases with the public sector unions, and a very weak economic forecast for 2024 (down to 0.3% GDP growth for this year) which has an impact on projected tax revenue. While the provincial economy is expected to bounce back in 2025 and beyond, the Ford government projects that provincial tax revenue is forecasted to lag and not keep pace with previous annual increases when the economy has been firing on all cylinders. 

So, is the shaky economy the core reason for Ford folks to abandon their fiscal principles? No. The Conservatives face a new foe with Bonnie Crombie as leader of the Ontario Liberals, and appear spooked enough to spend money on attack ads in an attempt to shape public opinion. The Official Opposition NDP have started to trail the Liberals and are in third place, despite the popularity and effectiveness of their leader Marit Stiles. As they reach the midway point in their second term, the Ford government has (temporarily) abandoned their fiscal conservatism with their plan to balance kicked down the road to 2026, when Ontario voters are scheduled to go to the polls. 

Below is a review of the key themes and investment measures in Budget 2024:

Infrastructure spending

There is big money for infrastructure – $190.2 billion projected over the next decade for everything from hospitals to highways, roads and transit, schools, water / wastewater infrastructure to support housing expansion, municipal sports and recreational facilities and more. Building infrastructure requires people, and while not in the same ballpark, there is $220 million in new funding for skilled trades and apprenticeship programs, aimed at getting more young people into the trades to meet Ontario’s significant skilled labour challenges (particularly in the building trades). An interesting, important and progressive measure is the Province’s decision to tackle the pension problem for skilled trades professionals, who often do not have access to employer pension plans (because they often work on multiple projects for multiple employers over their careers). The Province is moving forward to implement a target benefit framework, with draft regulatory proposals for consultation this summer, and the framework to be in effect by January 1, 2025. 

Pocketbook measures

As mentioned, a second key theme in Budget 2024 are a variety of measures (some may describe them as “populist”, or at least popular) aimed at cutting or freezing costs for Ontarians. Some of these measures include: 

  • Extending the temporary tax cut on gas and fuel set to expire April 1 to the end of December 2024. This Ford government measure is in stark contrast from the Federal Liberal’s carbon tax, which is set to increase on April 1;
  • Hoping the Ontario Liberals would take the bait (they didn’t), the Ford government is moving forward with legislation that would require the provincial government to initiate a referendum before introducing a provincial carbon tax;
  • Expanding the funding available from the Ontario Electricity Support Program which provides funding to pay for the electricity use of lower income Ontarians;
  • Extending the tuition freeze for Ontario’s post-secondary students;
  • Banning tolls on new highway expansions. (It should be noted that it was a previous Conservative government that sold the 407ETR – a major east-west highway that cuts across the Greater Toronto and Hamilton Area);
  • Freezing driver’s license fees, and eliminating license plate renewal costs.

Pocketbook items – even small ones – can have an impact on reversing the fortunes of governments that face a disgruntled electorate. It will be interesting to see if the Federal Liberals take any steps to do something similar when they release the federal Budget on April 16. 

Targeted investments 

Lastly, the Ford government’s focus on better services is aimed at specific groups and segments with targeted measures. For example, rather than simply increasing funding to the Ministry of Health to match inflation, funding to that Ministry is only being increased by 1.3% (a modest $1 billion increase, for by far the largest program spending area of any government). Instead, the Province is attempting to invest in measures to keep Ontarians out of the health system (or at least served by lower cost health interventions) through measures such as investing:

  • $152 million over the next three years in additional funding for supportive housing, including serving those with mental health and addictions needs to access the care and wraparound supports they need to live independently;
  • $2 billion over three years in additional funding to stabilize the home and community care workforce and to support the expansion of home care services (i.e. keep people in their homes, and out of hospitals);
  • $546 million over three years to expand primary care access to family health teams to reach an additional 600,000 Ontarians (to reduce hospital visits as a measure to access primary care);
  • $155 million in 2024–25 to increase the construction funding subsidy, to support the cost of developing or redeveloping a long‐term care home;
  • $6.4 billion since 2019 to build 58,000 new and upgraded long-term care beds to modern design standards across the province by 2028.

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