Ontario Budget 2024 : The largest in the province's history

Ontario’s Finance Minister, Peter Bethlenfalvy, released the province’s 2024 budget today, Building a Better Ontario, which is centered around two key themes: “Building Ontario” and “Working for You.”

Many highlights in Budget 2024 stem from a continuation of announcements made in previous, post-COVID budgets. “In the face of global economic uncertainty and high interest rates that continue to put pressure on Ontario families, our government is taking a responsible approach by investing to rebuild Ontario’s economy without raising taxes,” said Minister Bethlenfalvy.

Today it was announced that the projected deficit for 2024-2025 would be $9.8 billion and 2026 would be $4.4 billion with a surplus of $0.5 billion projected in 2027 after the 2026 provincial election.

Despite Ontario’s labour market performing well in 2023, high interest rates are expected to continue impacting Ontario’s economy in 2024 with real gross domestic product (GDP) growth projected to slow from an estimated 1.2 percent in 2023 to 0.3 percent in 2024. Real GDP growth is projected to accelerate to 1.9 per cent in 2025, and 2.2 per cent in 2026 and 2027.

Our initial analysis

The 2024 provincial budget aligns with the Ford government’s commitment to invest in infrastructure projects despite economic turbulence. While the emphasis on economic growth is aligned with the province’s needs, Ontario’s current financial picture doesn’t promise a smooth path to recovery.

The province will need to practice financial restraint—making cuts to spending in some areas—if Ontario is to follow the path to balance in time for the 2026 election. It is important to note that Minister Bethlenfalvy has pledged against tax increases even if it means taking on a higher deficit in the interim.

Key takeaways

The Ford government continues to be interested in supporting “Made in Ontario” manufacturing solutions with credits and grants that will be implemented this year.

An important call out is Premier Ford’s commitment to continue enabling businesses to invest and grow in Ontario. The province has announced top ups to several funding programs including the Invest Ontario Fund, Critical Minerals Innovation Fund, Shipbuilding Grant Program and the Starter Company Plus program. Small to medium sized businesses represent the backbone of Ontario's economy, which bodes well for the Ford government.

As many would expect, another key focus area is doubling down on the “Get it Done” plan which will build more housing, which includes innovative housing options and affordable housing. This in hand with municipalities asking for more funding for housing developments will place much of the funding pressure on the federal government to provide more assistance to help Ontario and its municipalities now and not over the next 5 to 10 years.

Lastly, keeping costs down through pocketbook policies has been a constant for this government. Ontario will be extending the gas tax cut while also committing to auto insurance reforms. This comes shortly after the One Fare Program launched last month.

Major spending highlights

Infrastructure and transportation

$67.5 billion over 10 years for public transit, with a variety of projects underway, including Go Transit and Ontario Line investments and $27.4 billion over 10 years to support the planning and construction of highway expansion and rehabilitation projects across the province.

$1 billion to support critical legacy infrastructure such as all‐season roads, broadband connectivity, and community support for the Ring of Fire region.

Housing and affordability

$1.8 billion over three years, beginning in 2024–25, to help build municipal housing‐enabling infrastructure projects through the new $1.0 billion Municipal Housing Infrastructure Program and the enhanced $825 million Housing‐Enabling Water Systems Fund.

In an effort to modernize auto insurance, the budget includes reforms that allow Ontarians to opt out of some portions of auto insurance and select from a wider variety of coverage options to lower their car insurance premiums.

Healthcare

Nearly $50 billion over the next 10 years in hospital infrastructure, including close to $36 billion in hospital capital grants, to support more than 50 hospital projects that would add approximately 3,000 new beds over 10 years to increase access to quality care.

A new medical school at York University, which will be the first medical school in Canada focused primarily on training family doctors. This program will focus on enhancing access to primary care across the province for communities currently facing family doctor shortages.

Workforce and skills development

An additional $100 million in the Skills Development Fund, which was initially launched in 2021, as well as $62 million in two of Ontario's foundational skilled trades programs, including over $21 million to expand the Ontario Youth Apprenticeship Program and $42 million to launch 100 pre-apprenticeship training programs around the province.

Reactions

New Democratic Party (NDP)

Provincial opposition leader, Marit Stiles was vocal in her criticism of the budget, arguing that it does little to support Ontarians with the cost of living, people without a family doctor struggling to access health care or those seeking affordable housing.

Ontario Liberal Party

Ontario’s Liberal Party leader, Bonnie Crombie, noted that the budget does not adequately support families dealing with the affordability crisis.

Green Party

Green Party Leader, Mike Shreiner, critiqued the lack of significant investment to the repair backlog in the education sector.

Ontario Chamber of Commerce (OCC)

“This budget takes important steps in the right direction, and at a time when Ontario faces declining productivity, we hope it sets the stage for bigger leaps forward,” said Daniel Tisch, President and CEO of the OCC.

Canadian Federation of Independent Business (CFIB)

“While we recognize that many small businesses will benefit from today’s announced infrastructure investments, the Ontario government’s ambitious building plans must come with a comprehensive construction mitigation program that provides direct funding to small businesses for lengthy, disruptive projects. Small businesses need to survive to benefit from the finished project. All further provincial construction announcements should include construction mitigation policies,” said the CFIB.

Next Steps

For further insights and analysis on today’s budget and how it impacts your organization, please contact NATIONAL Toronto’s Public Affairs Practice Lead, Saeed Selvam.