Finance minister announces budget to be tabled March 24 but won't commit to a 'path to balance'

Finance minister announces budget to be tabled March 24 but won’t commit to a ‘path to balance’

Ontario Finance Minister Peter Bethlenfalvy will release the province's 2021 budget on March 24, setting the course for the province's recovery from the pandemic.

"In a time of uncertainty, people need to know that their government has a plan," said Bethlenfalvy at Queen's Park on Thursday morning. "They need to know their government has their backs."

The finance minister said the vaccine rollout will be "priority number one" in the government's budget in order to keep people healthy and protect their jobs. "As I often say, without healthy people, you can't have a healthy economy."

The government will be talking a lot about unleashing the province's potential and economic growth in the coming months, he said.

And Bethlenfalvy indicated the government will rely on economic growth to return to balance after a deficit of about $38.5 billion this year.

"Our government knows that this level of spending is not sustainable in the long term," he said. "But I'm convinced it's absolutely essential right now. Some will claim that balancing the budget will require cuts to public services or higher taxes down the road. But we will choose another path. We will build on the foundation for growth set through the 2020 budget and create new conditions for growth."

However, Behtlenfalvy would not confirm, when asked, that the budget will include a "path to balance," or a multi-year fiscal projection that indicates when the province will get out of deficit — a legal requirement under the Fiscal Sustainability, Transparency and Accountability Act. The 2020 budget, released in November, broke with that requirement but then-Finance Minister Rod Phillips committed at the time that the 2021 budget would comply.

Bethlenfalvy, on the other hand, said Ontarians should "stay tuned" to find out, adding, "I do believe it's important to give people clarity on the sustainability of the finances over the long term and to give some sense of where the vision of this government [is] and be accountable to the people of Ontario on how we're going to deal with the unprecedented amount of spending, but we'll address that more clearly, obviously, in the coming days and months and years, because the job is not done yet."

While most of the province's attention is focused on the pandemic, there is also an election set for next year — on June 2, 2022. It will be the Doug Ford government's last full budget year to accomplish its 2018 campaign promises.

The last path to balance the government published was in the 2019 budget, but a lot has changed since then. It forecast a $6.8 billion deficit for 2020-21 — some $30 billion off the current projection for the year.

That 2019 outlook indicated that the Ford government planned to begin implementing two of its major election promises — a personal income tax cut for the middle class and a gas tax cut — in the coming 2021-22 budget year, just ahead of the expected 2022 election. At the time, government officials confirmed those election promises had been baked into the fiscal projections, even though they had not been explicitly announced.

The personal income tax promise was to reduce the rate of the second provincial income tax bracket to 7.32 per cent from 9.15 per cent. The gas tax promise was to lower gasoline taxes by 10 cents a litre and diesel taxes by 10.3 cents a litre.

The province's Financial Accountability Office (FAO) released a report Thursday that the province still had $4.7 billion in three contingency funds — one dedicated to the health-care response to the pandemic, one dedicated to the economic response to the pandemic and one general contingency fund — that had not been allocated to specific programs as of Dec. 31, 2020.

The government says the funds from the two pandemic contingencies — about $2 billion, according to the FAO — have since been allocated.

All three opposition parties seized on the report to say the government did not move fast enough to spend what was required to keep Ontarians protected from COVID-19.

"This is something that is very frustrating to us, watching the government hold back money while people are dying in long-term care," said Ontario NDP Leader Andrea Horwath.

Horwath said she already has concerns about the coming budget.

"There are just so many problems people are facing after this horrifying year we've had and the government needs to be there for them," she said. "I think there are things the government can do but sadly we've not seen them accomplish much when it comes to supporting everyday folks, when it comes to supporting businesses."

Specifically, she wants to see the government move faster to increase the hours of care residents in long-term care homes receive, a plan to ensure workers get paid time off to get a COVID-19 vaccination, no cuts in education and no cuts in other services. "I guess what I'm saying is I have a healthy sense of skepticism because we know what the Ford government is all about."


Jessica Smith Cross

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