Ontario Tables Budget 2024

Hon. Peter Bethlenfalvy, Ontario Minister of Finance, has introduced the 2024 Budget entitled Building a Better Ontario. This year’s budget is thematically similar to Budget 2023, focusing on building infrastructure, creating jobs, and support for workers.

The Budget forecasts a $9.8 billion deficit for the 2024-25 fiscal year. The government intends to continue to run a deficit of $4.6 billion in 2025-26 before returning to surplus in 2026-27, two years later than was previously forecasted.

Ontario’s GDP rose by 1.2% in 2023, supported by a 2.4% increase in employment – with employment growth projected to increase by 0.8% in 2024. The province’s net debt-to-GDP ratio is projected at 39.2% in 2024-25.

Budget 2024 is broken down into two key themes:  

Building Ontario

• Rebuilding Ontario’s Economy
• Building Infrastructure, Highways, and Transit

Working for You

• Working for Workers
• Keeping Costs Down
• Better Services for You

Key Commitments

Building Ontario
Rebuilding Ontario’s Economy

• Investing $15 million to the Critical Minerals Innovation Fund for research, development, and commercialization.
• Providing an additional $100 million to the Invest Ontario Fund.
• Developing a grant program to support the province’s shipbuilding industry as part of the government’s plan to support the marine sector.
• Providing an additional $86 million over three years to the Northern Energy Advantage Program for large industrial operators in Northern Ontario.

Building Infrastructure, Transit, and Highways

• Investing $1 billion for the new Municipal Housing Infrastructure Program.
• Enhancing the Housing-Enabling Water Systems Fund to total $825 million and providing more attractive borrowing options through Infrastructure Ontario’s municipal loan program.
• Investing $200 million over three years in the Community Sport and Recreation Infrastructure Fund for sport, recreation, and community facilities.
• Building new highways and transit in Windsor, Ottawa, Milton, Mississauga, and Pickering.

Working for You
Working for Workers

• Investing $100 million more in the Skills Development Fund Training Stream.
• Providing an additional $16.5 million annually over three years, as part of the Skilled Trades Strategy, focused on attracting more young people into the skilled trades, simplifying the system, and encouraging employer participation in apprenticeships.
• Investing $62.9 million to expand the Ontario Youth Apprenticeship Program and launch pre-apprenticeship training projects.
• Making progress on implementing a permanent Target Benefit Framework.

Keeping Your Costs Down

• Proposing to extend the current temporary gas tax and fuel tax rate cuts, keeping the rates at nine cents per litre until December 31, 2024.
• Funding to extend the tuition fee freeze for Ontario students in publicly assisted colleges and universities for at least three more years.
• Launching One Fare so that transit riders only pay once for transfer systems in the Greater Toronto Area.
• Expanding the Ontario Guaranteed Annual Income System (GAINS) program and indexing the GAINS benefit to inflation.

Better Services for You

• Investing $23 billion over 10 years, including $16 billion in capital grants, to build, expand, and renew schools and child care spaces. This includes $1.4 billion for the current school year to support the repair and renewal of schools.
• Investing a further $120 million in the Ontario Autism Program in 2024-25.
• Investing $49 million to support programs that combat auto theft and dismantle organized crime networks.
• Providing an additional $46 million, including purchasing four helicopters, to support patrols and improve response times to major incidents.
• Providing an additional $965 million, including a 4% increase in total base hospital operations, to support hospitals.
• Establishing a new medical school with York University.
• Investing an additional $2 billion over three years to support the home and community care workforce and to accelerate the expansion of home care services.
• Investing a further $546 million in Primary Health Care over three years.
• Investing $155 million more to increase the construction funding subsidy for long-term care home development and redevelopment.

What’s Next? 

The Government will spend the next three weeks debating and passing the budget, before rising for the break week scheduled for April 8^th.

Official Opposition Leader Marit Stiles and the NDP will be competing with new Liberal Leader Bonnie Crombie to gain the most airtime in their response to Budget 2024.

In the weeks following the budget passing, the government will make a number of “echo” announcements of funding in the budget.

While the Budget is the immediate focus of the Ford government over the next three weeks, given the lack of new funding measures, stakeholders will have an opportunity to seek funding in the Fall Economic Statement. Work will begin on the Fall Economic Statement over the summer with consultations likely beginning in the early Autumn.

Analysis

Budget 2024 represents the midpoint of the second mandate for the Ford Conservatives, framing the government’s agenda as stable, responsible and focused on continuing to ‘build’. Unlike in their prior budget, the Ford government has de-emphasized a balanced budget due to high interest rates, a continued decline in inflationary-driven revenue, and the fiscal impacts of the court’s decision on Bill 124.

Characteristic with the Ford Government’s approach, Budget 2024 remains thematically unchanged, but signals continued investments in several core areas: economic growth, infrastructure, workers, and health care.

Given continued pressure on Ontario’s healthcare system, the Ford Government is continuing their commitment to build hospital infrastructure, such as hospitals and long-term care. While pressure in the system largely stems from health human resources, new spending on healthcare is focused on connecting Ontarians to the services they need, as laid out in Ontario’s Your Health Act. This is intended to reduce pressure through efficiency and accuracy in triaging as opposed to focusing exclusively on capacity. The budget increases healthcare funding by $0.5 billion from 2023-24, a figure that many industry stakeholders were quick to criticize as insufficient.

With the government’s projected housing starts falling from the targeted 125,000 to 87,900 in 2024, they have invested $1 billion in the Municipal Housing Infrastructure Program and quadrupling the Housing-Enabling Water Systems Fund to a total of $825 million to help municipalities repair and expand the critical infrastructure needed to reach their housing targets. The government has been under pressure on the housing issue from Bonnie Crombie’s Liberals, who have outflanked them on the issue of building density in recent weeks.

Both the Opposition NDP and Liberals focused on value-for-money, taking aim at the record spending numbers while framing the Budget as not addressing healthcare, childcare or rent costs. In both parties’ cases, the focus on a lack of value-for-money is a departure from the past approach of primarily focusing on the government not spending enough.

With Budget 2024, the government has signalled a preference for affordability measures over deficit reduction. As the Ford Tories sell their plan to Ontarians, expect PC MPPs to spend time emphasizing popular consumer-facing programs, including the extension of the fuel tax rate cut and freeze on college and university tuition fees, expanded eligibility for the Ontario Guaranteed Annual Income System, and the One Fare transit pass program.