It’s budget day in Ontario, and the finance minister is set to present his plan to bolster the economy ahead of an expected slowdown, while also trying to ease the rising cost of living.
Finance Minister Peter Bethlenfalvy says his budget takes a "prudent and responsible" approach to the province’s finances, and will support workers.
He has also said there will be no tax increases.
Bethlenfalvy and Premier Doug Ford have announced that a 5.7−cent per litre cut to the gas tax that had been set to expire in June will now continue to the end of the year, but they have not indicated if that will be the only pocketbook measure.
Ford has said the fiscal plan will be "balanced, per se," though he was not necessarily referring to whether the province would still run a deficit.
The premier says the budget will take economic conditions into account while also pouring money into infrastructure and attracting manufacturing.
Last year’s budget had the province eyeing a surplus for this upcoming fiscal year, but Bethlenfalvy’s fall economic update pegged the 2024−25 deficit at $5.3 billion and projected a balanced budget the following year. He has not indicated if his path to balance will remain the same.
Ford and Bethlenfalvy have also already announced $1.6 billion more to help municipalities build key infrastructure to help support new home construction, such as roads and water lines.
Desjardins principal economist Marc Desormeaux says Desjardins and others are forecasting an economic slowdown, but Ontario should be able to weather the storm.
"We don’t think that a record deficit is likely," he said. "We don’t think that a record debt−to−GDP ratio is likely. That reflects both the prudence that’s built into these plans and some of the efforts to consolidate public finances that occurred before the pandemic."
Ontario’s net debt‐to‐GDP ratio was projected in the fall economic statement to be 39.1 per cent in the coming fiscal year, up from the forecast in last year’s budget of 37.7 per cent.
That fall fiscal update had the province expecting the GDP to rise by just 0.5 per cent in 2024 before picking up again the following year.
banner image: The Canadian Press
