Budget 2022: Ontario's Plan to Build

Today the Ontario Government released their final budget of their four year mandate titled Ontario’s Plan to Build, Budget 2022. The budget bill itself will not be introduced prior to the election and the government will use this plan to face the electorate, just as was the case when Premier Harris campaigned on his budget in 1999 and Premier Wynne did in 2014.

Just like the Government’s Fall Economic Statement last year, the Doug Ford PCs are sticking with their budget theme as a plan to build Ontario. Saying yes and getting it done were common themes in the Minister’s speech this afternoon, themes we will hear as the governing PC’s hit the campaign hustings.  

“It’s a budget that says ‘Yes’ to rebuilding Ontario’s Economy, a budget that says ‘Yes’ to keeping costs down for Ontario families and putting more money back in their pockets,” said Minister of Finance Peter Bethlenfalvy in his speech on Budget 2022. “This is our plan to get it done.”

The government’s Plan to Build is broken down into five major priorities:

• Rebuilding Ontario’s Economy
• Working for Workers
• Building Highways and Key Infrastructure
• Keeping Costs Down
• A Plan to Stay Open

Over the past weeks several of the key investments highlighted had already been announced or teased out via media leaks, so beyond the fiscal situation there was very little new in what was delivered and no major curve balls as we have seen in the past. Investments in local hospitals, long term care homes, support for home care, the historic childcare deal, the government's labour agenda, and other recent announcements were all highlighted in today’s budget. 

Ontario's Fiscal Situation

Despite eye-popping projections for deficit spending in last spring’s Budget tabled by Minister Bethlenfalvy, today’s Budget is projecting a deficit of $19.6 billion, compared to the $33 billion deficit that was projected in Budget 2021. Ontario’s stronger than expected economic growth is the main contributor to this reduction, setting a path to balancing the budget two years earlier than previously projected.

Over the medium term, the government projects steadily declining deficits of $12.3 billion in 2023–24 and $7.6 billion in 2024–25. Under the Government’s ‘Faster Growth Scenario,’ the Ford Government is projecting the possibility of a $2.4 billion surplus by 2024-2025. 

Rebuilding Ontario’s Economy

As part of the Government’s plan to rebuild Ontario’s economy, Budget 2022 highlighted how critical minerals will become part of the future of clean steel, batteries and hybrid and electric vehicles as the next generation of automobiles are built in Ontario, by Ontario workers and sold across North America and the world. The government’s plan includes up to $1 billion for legacy infrastructure, such as all-season roads to the Ring of Fire, building the corridor to prosperity. 

The government also committed billions in investments to create good manufacturing jobs as Ontario becomes a North American leader in building the vehicles of the future. As of early April 2022, Ontario has seen more than $12 billion in new investments for vehicle production mandates and battery manufacturing over the past 18 months. 

The Budget lays out the Government’s plan to bring jobs at provincial agencies to communities across Ontario to help spur economic growth. This begins with exploring the relocation of the headquarters of the Workplace Safety and Insurance Board (WSIB) to London, working in close partnership with the agency and other partners, and identifying main street communities to headquarter new government agencies.

The Government is also investing nearly $107 million over the next three years to help the province compete with jurisdictions in a global race to develop and own critical technologies.

Working for Workers

The Budget recommits to the Government’s earlier announcement to increase the general minimum wage to $15.50 per hour on October 1, 2022, while guaranteeing digital platform workers the general minimum wage and new, first-in-Canada protections.

The Government is also investing $1 billion annually in employment and training programs to help people retrain and upgrade their skills as the province continues to support better jobs and opportunities for Ontario workers. The Government is also investing an additional $114.4 million over three years in its Skilled Trades Strategy to break the stigma associated with the skilled trades and simplify the system.

The Government is proposing expanding college degree granting to help build a pipeline of job-ready graduates in applied fields and allow students to gain the education, experience and skills to enter the workforce faster.

Budget 2022 commits to providing $268.5 million over three years in additional funding through Employment Ontario to strengthen the government’s skills training and employment programs, including pandemic recovery initiatives.

Building Highways and Key Infrastructure

Budget 2022 is investing $25.1 billion over the next 10 years to support the planning and construction of highway projects across the province, including building Highway 413, building the Bradford Bypass and taking the first steps to enable the future widening of Highway 401.

The Government is committing to continue the next phase of construction for the new Highway 7 between Kitchener and Guelph as well as reconstructing Highway 101, the Timmins Connecting Link. The Budget also commits to investing $61.6 billion over 10 years for public transit, including breaking ground on the Ontario Line, advancing planning work for the Sheppard Subway Extension, planning and design work for the Eglinton Crosstown West Extension to Toronto Pearson International Airport, amongst others. 

Keeping Costs Down

One of the main pillars for the Ford Government and the re-election efforts of the Ontario PCs is addressing affordability in Ontario. Budget 2022 commits to implementing a long-term plan to address the housing crisis, informed by the Housing Affordability Task Force’s recommendations. This includes supporting the creation of all types of housing by speeding up approvals to get more shovels in the ground faster, prioritizing Ontario homebuyers over foreign speculators, cracking down on unethical developers, and committing to introduce a housing supply action plan every year for the next four years.

The Government also plans on making it less expensive to drive by eliminating and refunding licence plate renewal fees for passenger vehicles, light-duty trucks, motorcycles and mopeds, as well as cutting the gas tax by 5.7 cents per litre for six months beginning July 1, 2022, and removing tolls on Highway 418 and 412.

Budget 2022 proposes to provide an additional $300 in Personal Income Tax (PIT) relief, on average, to about 1.1 million taxpayers by enhancing the Low-income Individuals and Families Tax Credit.

The Budget also highlighted what the Government touts as their historic child care deal by signing a $13.2 billion agreement with the federal government in an important step towards achieving an average of $10-a-day child care by September 2025.

A Plan to Stay Open

As part of the Government’s plan to stay open as the province continues to reopen and return to normal, the 2022 Budget commits to shoring up domestic production of critical supplies such as a wide variety of personal protective equipment.

The 2022 Budget is investing approximately $2.8 billion over the next three years to make the current temporary PSW /DSW wage enhancement permanent. As part of the Government’s plan to expand Ontario’s health care workforce, the Government is also committing to invest $42.5 million over two years, beginning in 2023-24, to support the expansion of undergraduate and postgraduate medical education in Ontario, including in Brampton and Scarborough.

The Budget commits to invest more than $40 billion over the next 10 years in hospital and health care infrastructure to support more than 50 major hospital projects that would add 3,000 new beds over 10 years. The Government is investing an additional $3.3 billion in 2022-23 in hospitals, for a total of $8.8 billion since 2018-19, including supporting the continuation of over 3,000 acute and post-acute beds, and hundreds of new critical care beds.

As part of the plan to build health care capacity and improve patient care, the Budget committed up to an additional $1 billion over the next three years to expand home care, improve quality of care and support recruitment and training. The government is also proposing a new, refundable Ontario Seniors Care at Home Tax Credit to help seniors aged 70 and older with eligible home care medical expenses to help people stay in their homes longer.

Upstream's Analysis

Budget 2022 lays out the accomplishments of the Ford government and their narrative for a pathway to a renewed mandate on June 2nd. The government that is proud of saying yes also took several shots at the former Liberal government for “saying no.”  There were also several references to the priorities of the two opposition parties. 

The five pillars reviewed above will now for all intents and purposes become the Ontario PC election platform. Opposition parties have already warned of a bait and switch and that a re-elected PC government will divert from this plan. This may be an early sign that the opposition parties believe that this budget/platform will be popular with voters and are hopeful they can convince Ontarians that you can’t trust Doug Ford to implement it.

In looking at the priorities in this budget you can extrapolate the regional areas in the province that the PCs believe they need to either grow in or shore up. The locally popular Highway 413 in the western GTA is a key region where the government has seats to defend and grow in; investments in the north - like the recently announced funding for rail to Timmins and investments in natural resources - show optimism for PC growth in Northern Ontario; the removal of tolls on Highways 412 and 418 will appeal in ridings that the PCs took from the Liberals in 2018 in the eastern GTA. 

It’s also clear with the Government’s investments in areas like the skilled trades, or tax-relief for lower income voters, that the PCs can build off their success in 2018 in attracting blue collar workers that traditionally parked their vote elsewhere.

The Liberals and NDP will now move their opposition to the budget from the legislature to the hustings. Although many of the measures will be highly popular with swing voters, those parties will focus on chipping away confidence from the government and demonstrating a competitive edge against one another to try and solidify anti-PC votes.  

Starting May 5th, Upstream will be sending a daily election newsletter. We look forward to continuing to share updates and our analysis with you! 

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