Ontario’s fall economic statement indicates deficit shrinking to $21.5 billion

Fiscal update forecasts $148 billion in spending over the next decade

Queen’s Park has handed down its fall economic statement, highlighting some of the things it plans to do with our tax dollars. It contains increased spending on infrastructure, local tourism tax credits, and hundreds of millions in healthcare spending. It also indicates the province’s deficit will shrink by over ten billion dollars.

Finance Minister Peter Bethlenfalvy was at the Ontario Legislature today to present the update, saying Ontario’s deficit will fall to $21.5 billion, down from the $33.1 billion that was forecast in the March economic update. The fall economic statement shows the province plans to spend $148 billion on a variety of initiatives over the next decade.

“As we continue to protect the hard-won progress against the pandemic, our government is looking forward with our plan to build a better and brighter future for families, workers and businesses in Ontario,” said Minister Bethlenfalvy. “By unlocking critical minerals in the North, harnessing our manufacturing capacity and building critical infrastructure, our plan will drive our economic recovery and prosperity for every region of our province.”

Health spending makes up a good 40 per cent of this update. The province says it is committing $342 million to strengthen the nursing workforce by adding or upskilling over 5,000 registered nurses and 8,000 personal support workers. Another $57.6 million has been committed to hiring 225 nurse practitioners for the Long-Term Care sector. Another $548.5 million is expected to be spent over three years to expand home and community care, supporting post-acute surgical patients and patients with complex health conditions.

The economic statement indicates Ontario has spent $5.1 billion since the start of the COVID-19 pandemic to support the healthcare sector.

Supports for the Ontario Tourism sector were contained within the economic update, with the province providing an Ontario Staycation Tax Credit. It is expected this credit will provide $270 million in total support for accommodation expenses for travel within Ontario in 2022.

Ontario expects to spend more than $1.6 billion in resources to protect students and staff from COVID-19 in the 2021-2022 school year.

The province has allocated $2.8 billion to expand and repair highways and bridges across Ontario, with funding earmarked to advance the Bradford Bypass. Over $474 million has been committed to addressing large bridge rehabilitation in southern Ontario over the next five years. Municipal transit systems across the province will see an additional $345 million by the end of 2022, which is less than is typical given lower ridership and Gas Tax revenue resulting from the pandemic.

Ontario’s fall economic update also outlined plans for the creation of a $40 million Advanced Manufacturing and Innovation Competitiveness stream to help businesses improve competitiveness, growth, and job creation. The province also plans to expand the Aboriginal Loan Guarantee Program to one billion dollars to support Indigenous investments in electricity infrastructure.

“The Premier’s buddies get everything, but everyday families get none of what they need. There is no plan in here whatsoever to address housing costs. There’s no $10 a day childcare plan. There is no help or relief on gas and auto insurance costs. No relief on our hydro bills,” said NDP Opposition Leader Andrea Horwath. “Everyday life is expensive, and it’s getting more expensive, and Doug Ford has just ignored that.”

GDP growth of 4.3 per cent is expected by the end of 2021, with 4.5 per cent in 2022 and 2.6 per cent in 2023. Much of the shrinking of the deficit is dependent on whether this growth materializes as expected.