Ontario’s Minister of Finance, Peter Bethlenfalvy, released the province’s 2023 budget yesterday, titled Building a Strong Ontario which is centered around three key themes:
- Driving growth by lowering costs
- Building key infrastructure projects faster
- Attracting more jobs and investment to help businesses, families, and workers
By the numbers, the Ontario government will also look to balance the books by 2024-25, three years earlier than forecast in the last budget and just in time for the next election in 2026.
“With our thoughtful, transparent approach we have a plan to balance the budget while delivering support to families, workers, and businesses across Ontario,” said Minister Bethlenfalvy. “We will continue with this approach that is building an Ontario the people of this province can be proud of, not only today, but in the future. An Ontario that is strong.”
Ontario’s 2022–23 deficit is projected to be $2.2 billion which is $17.7 billion lower than the 2022 Budget outlook. A deficit of $1.3 billion is projected in 2023–24 followed by surpluses of $0.2 billion in 2024–25 and $4.4 billion in 2025–26.
However, it is interesting to note that the 2023 Budget also projects the province’s real GDP to grow only by 0.2 per cent in 2023 and 1.3 per cent in 2024 after a 3.7 per cent increase in 2022. Similarly, employment growth is also projected to stall at an increase of 0.5 per cent in 2023 after a 4.6 per cent increase in 2022.
Meanwhile the net debt-to-GDP ratio is projected to be 37.8 per cent in 2022-23 which will be the lowest level since 2011–12.
NATIONAL’s first take
Our initial analysis is as follows:
- Unsurprising to many, Premier Ford seems laser-focused on reinvigorating Ontario’s economy through targeted infrastructure investments in transit, highways, hospitals, and education. His message is clear. Build, build, build and the economy will follow.
- The Premier has also brought forward corporate tax cuts which he hopes will result in more investment and jobs in Ontario. However, this will likely leave him open to staunch criticism from the Official Opposition who’ll perceive this to be in line with “the rich get richer.”
- A mainstay in the Premier’s first term, pocketbook policies are few and far between in his first budget after the reelection win. We can probably expect that to change in the next few budget cycles.
- Going from deficit to surplus in 2024-2025 three years earlier than promised in last year’s budget is bold but also on brand for Premier Ford. How realistic that plan may be is up for debate. It is, however, the type of prudent financial management that his government was first elected for in 2018 but was unable to keep up due to the financial implications of managing the pandemic.
- On the back of having an agreement in principle for a significant increase in federal healthcare funding, healthcare doesn’t seem to be front and centre in the budget announcement. Just last month, Premier Ford introduced an ambitious plan for the province’s healthcare sector and while it is highlighted in the 2023 Budget, it seems like a missed opportunity not to have it right at the top.
Here are five key highlights from the 2023 Budget
- A staggering $184 billion over 10 years towards infrastructure spending, including $27.9 billion towards highways, $48 billion on hospitals, $70.5 billion towards transit and $15 billion on schools.
- $81 billion in healthcare spending in 2023-2024 alone, including newly allocated funding for mental health services, home and community care, surgical backlog, and the healthcare workforce.
- An estimated $8 billion in cost savings and support for some Ontario employers in 2023, including $3.6 billion going to small businesses, through expanded access to the small business Corporate Income Tax rate. Plus, a new 10 per cent refundable Corporate Income Tax credit for local manufacturers.
- New funding to train, attract and retain workers, including $224 million for the Skills Development Fund, $25 million for the Immigrant Nominee Program, $3.3 million dual-credit healthcare courses, and $3 million for the Bridge Training Program.
- $202 million annually towards the Homelessness Prevention Program and Indigenous Supportive Housing Program.
Next steps
NATIONAL will provide a follow-up perspective upon a detailed review of the budget in the coming days which will provide strategic insights and considerations for key sectors and industries. Our experts will also consider political and industry reactions and provide a roadmap for what comes next.
In the interim, our team of Public Affairs team is available to provide further insights and analysis on yesterday’s announcement and how it impacts your organization.
