On Thursday, the Ontario government unveiled a budget that shows potential surpluses within a year, while making significant investments in our healthcare.
The ministry is predicting that the revenue this year will be about $200 billion, which is higher than last year’s budget by $20.6 billion and also $4.4 billion higher than the third-quarter finances released last month. By the year 2026, the total revenue is expected to reach $226 billion.
The budget highlights a lot of focus on making improvements to our infrastructure. They’re planning to invest over $20 billion in projects like building highways, hospitals, and transit systems. They’re also planning to increase support for home care and healthcare workers.
$3.9 Billion Contingency Fund
The Treasury Board is expected to hold $3.9 billion in a contingency fund for unexpected expenses this year, including a possible payout for back pay to public employees if the province loses an appeal to the Supreme Court over Bill 124.
The reserve fund is expected to hold $1 billion in 2023-2024, increasing to $2 billion the following year and $4 billion after that. Critics have questioned the government’s decision to hold onto these large funds while facing a healthcare staffing crisis.
New Health-Care Funding
The government of Ontario plans to spend $81 billion on healthcare this fiscal year, with $500 million going towards improving home care and $72 million to expand publicly-funded procedures at private clinics. An additional $425 million has been earmarked over three years for mental health and addiction services.
The budget also addresses staffing shortages by allocating $200 million to address immediate staffing shortages, $80 million to increase post-secondary nursing program enrollment, and adding 154 post-graduate medical training spots and 100 seats for medical undergraduates.
Tax Breaks for Businesses
The Ontario government has proposed new tax breaks for businesses, including a corporate income tax credit of up to $2 million annually for Canadian-controlled private companies with a permanent location in Ontario on qualifying investments in buildings, machinery, and equipment.
The province also plans to extend the phase-out range for the small business corporate tax rate from $10 million to $50 million of taxable capital. The budget includes additional tax relief for businesses worth $8 billion, delivered through measures such as corporate and property tax relief and lower payroll costs.
What About Housing?
The government of Ontario aims to build 1.5 million homes in the next decade, but the 2023 budget shows that the province is already off-target. The budget predicts that 80,000 new housing starts will begin every year for the next three years, which is almost half of what is needed to reach the government’s goal.
There is a significant shortage of workers in the construction industry, and the province needs to add 72,000 more construction workers by 2027 to achieve its goal. So, the government has recently announced initiatives aimed at attracting more young people to skilled trades, which could aid in achieving the target.