Budget 2021: Ontario's Action Plan - Protecting People's Health and Our Economy

The Ontario government released their 2021 Budget late this afternoon, entitled Ontario’s Action Plan: Protecting People’s Health and Our Economy. It builds on past investment over the last year, continuing the focus on combating COVID-19, but also adds a few signposts for the coming economic recovery. 

The overriding theme of this budget? Hope and an optimism for Ontario.

“Hope is on the horizon,” said Minister of Finance Peter Bethlenfalvy in his budget speech. “The safe harbour is not far away. And until we reach those shores, we will maintain our relentless focus on protecting people’s health and our economy.” 

As such, the budget is divided into two major themes:

• Protecting People’s Health
• Protecting Our Economy 
  

Ontario's Fiscal Situation

For a Conservative government, particularly someone like Minister Bethlenfalvy who entered politics to rein in government spending, the top-line numbers likely bring some pain. The projected deficit for the 2021-22 fiscal year stands at $33.1 billion. This is a slight decrease from the fall fiscal update (where the deficit was pegged at $38.5 billion for the previous year) but is still one for the record books. 

Yet, there are not many sounding the alarm about this number, given we are still being hit by a global pandemic. This budget features billions in new government spending that will continue to bolster the public health and economic response to the COVID-19 pandemic; in total, the government has or will invest $51 billion in total support over 4 years. It also appears that funding for virtually all existing government programs has been kept in-tact.  

Protecting People’s Health

As grim as it may be to say after a full year, COVID-19 is still the dominant news story as it continues to heavily impact our day-to-day lives. Getting back to normal is the government’s top priority. So it makes sense that one of the largest investments in the budget is $1 billion for the ongoing province-wide vaccination plan. 

In addition to investing in the vaccine rollout, the government is investing $2.3 billion in new money for testing and contact racing. This will ensure workplaces can blunt the spread and stay open. 

Hospitals continue to be a big focus for this government. $5.1 billion is being invested to create more than 3,100 hospitals. In addition, there will be a new inpatient wing for Peel Memorial Hospital in Brampton and a new regional hospital in Windsor-Essex. 

Of course, the biggest and saddest story out of this pandemic has been the situation in long-term care. $650 million is being invested to continue to keep long-term care residents safe throughout the pandemic. This budget also featured good news for those looking for changes in the system. As has been previously announced, the government has increased the standard for  daily care to four hours per patient, which requires an investment of $4.9 billion. Additionally, the government plans to build 30,000 news long-term care beds with a total investment of $2.6 billion; as well as improve living conditions at existing facilities (including air conditioning) with $246 million in funding.

Protecting Our Economy 

There was good news for parents today! A third round of COVID-19 child benefits cheques will be sent out — and this time they’re doubled. For each child under 12, parents will receive $400, with $500 if you have a child with special needs under 21-years-old. 

A new tax credit is also being rolled out to help approximately 230,000 people who have lost their jobs or seen their hours reduced during COVID-19. The “Ontario Jobs Training Tax Credit” will provide up to $2,000 to help people with the cost of training. 

In addition to this direct support for Ontarians, the government is also ensuring that businesses  and organizations have access to support. A second round of the Ontario Small Business Support Grant will provide payments to around 120,000 small businesses. There will also be $400 million to support some of the hardest hit sectors in tourism, hospitality and culture. $50 million has also been earmarked to support faith based and culture organizations, many of which have seen donations plummet as their doors have been forced closed. 

This government also continues to make significant investments in broadband. The Ontario Action Plan announced $2.8 billion of new money, bringing the province’s total investment to almost $4 billion in broadband expansion since 2019-20. 

Upstream's Analysis

While the election is scheduled for June 2022, it might seem silly to suggest that this budget is any way related — but with just over a year left in their mandate, the governing Progressive Conservatives are definitely conscious of producing a popular budget. To a decent extent, this budget is the framework for how Premier Ford and his Cabinet will govern Ontario over the course of their final year of their mandate. 

With that in mind, this will likely be a well-received document. The opposition parties will pinpoint ways they could have targeted their spending more, yes, but with the projected deficit at $33.1 billion, the overriding opinion will likely be that the government is continuing to invest wisely in the fight against COVID-19. Some critics may grumble that there isn’t enough on economic recovery, but with a third wave upon us and less than 10% of the population vaccinated, we are still very much in the midst of this pandemic. 

Still, in a sense, this is a stay-the-course budget: There are no flashy new spending announcements nor are there any substantial new programs. With a fall economic statement later this year and a final budget expected this time next year, the path ahead for what the next four years of a Ford Government will look like will likely be held off until then.