Finance Minister Charles Sousa delivered the Ontario budget on Thursday. Here are some of the highlights:
- The budget deficit for fiscal year 2015-16 is expected to come in at $5.7 billion, down from the last estimate of $7.5 billion.
- The deficit for 2016-17 is projected to come in at $4.6 billion and be reduced to zero the following fiscal year.
- Ontario’s net debt will hit $308 billion in 2016-17, the largest of any sub-national jurisdiction in the world, costing $11.8 billion in interest payments, which will increase to $13.1 billion by 2018-19.
Says IIAC president and CEO Ian Russell: “The IIAC is pleased to see the projected deficit for fiscal 2015-16 and 2016-17 is significantly lower than previously forecast and the target for fiscal balance has not changed.
“Reliance on economic growth for improvement in the fiscal position, rather than spending restraint, is a risky strategy given uncertain and volatile conditions. Overall spending remains excessive. The lack of progress in implementing the Drummond recommendations to reform program spending in the province is disappointing.”
Eye on financial services
The budget document notes the government will push ahead with the Cooperative Capital Markets Regulatory System (CCMR). “[T]he government plans to introduce the Capital Markets Act and related CCMR legislation, following work with other participating jurisdictions to finalize the proposed CCMR legislative framework.”
The budget also announces plans “to propose changes to update securities laws and continue to strengthen the financial services sector, protecting consumers and investors and bolstering the stability and efficiency of financial markets.” The changes will aim to “strengthen enforcement provisions; create additional tools to provide protection for whistleblowers; and update the Securities Act related to the use of information obtained in investigations to allow such information to be used in a broader array of proceedings under the Securities Act.”
Other budget highlights
- Single seniors earning up to $19,300 per year will be eligible for cheaper drugs starting in August, compared with the previous threshold of $16,018. Couples with an income of up to $32,300 will also be eligible, where before only those earning $24,175 qualified. The costs will be offset by raising deductibles and co-payments for seniors above the new income thresholds. Annual deductibles will rise to $170 from $100 and co-payments will increase by a dollar to $7.11.
- Income from the cap-and-trade plan to battle climate change is expected to hit $1.9 billion in 2017, up from last year’s projection of $1.3 billion.
- University and college tuition will be free for students from families with incomes of $50,000 or less, and more than half of students from families with incomes up to $83,000 will receive non-repayable grants that exceed the average tuition — mostly students who live on their own.
- There will be a $3 increase in the price of a carton of 200 cigarettes, effective at 12:01 a.m. Friday, and the tobacco tax will keep rising at the rate of inflation each year over the next five years.
- The minimum price for a bottle of wine rises to $7.95, and there will be a series of increases in the LCBO’s mark-up on wine, starting with a two percentage point hike in June — about 10 cents a bottle — followed by another two percentage points in 2017 and 2018, with a one-point hike in 2019.
- There will also be annual increases of about 10 cents in the tax on wine sold in private retail outlets, increasing from 16.1 cents to 20.1 cents over four years.
- The $30 fee for Drive Clean vehicle emissions tests will be eliminated in 2017-18, but not the tests themselves, which will cost the province $60 million a year.
- Hospitals will get their first funding increase in five years, up $345 million, plus $12 billion over 10 years in capital grants for about three dozen major hospital projects.
- There will be $333 million over five years to redesign and improve autism services.
- Shingles vaccines for seniors, which cost $170, will be free.