Yesterday the Ontario Government released its 2024 Budget.
Summary/Political Context
Ontario Finance Minister Peter Bethlenfalvy tabled his fourth budget today which includes $214 billion in spending, and a deficit of $9.8 billion – more than 3 times larger than last year’s deficit at $3 billion. Inflation, low GDP growth (estimated to be 0.3% in 2024) and nearly $6 billion being booked in payments to public sector employees are some of the key reasons for the larger than expected deficit. The Minister stated that the budget deficit will now be eliminated in 2026 – two years later than originally planned and just before the next scheduled election.
Themes
Health Care
Health care is still the largest component of provincial spending and it will increase by $1 billion from last year ($74.6 billion to $75.6 billion). Approximately $50 billion will be allocated over the next ten years on health care infrastructure and hospital expansion. In addition: “…the government is investing $155 million in 2024–25 to increase funding to fast-track construction of the next tranche of long-term care homes by November 30, 2024.” The health care workforce will receive an additional $743 million over three years to help address health care staffing needs. Of note, York University is going to receive $9 million to start the development of a new school of medicine that helps: “…accelerate the pace and path to new medical doctor programs.”
Education
The post-secondary tuition freeze will remain in place for another three years, while an additional $1.3 billion will be provided to post-secondary institutions. Primary education will receive an additional: “…$172 million for the 2024–25 school year for targeted math and reading supports and an updated kindergarten curriculum starting in September 2025.”
Housing
The goal of the government is to have 1.5 million homes built by 2031. To help with achieving this goal the Province has dedicated $1 billion in the new Municipal Housing Infrastructure Program. An additional $825 million is provided to ensure municipalities can improve/build supporting water infrastructure. The province has also granted authority to single and upper-tier municipalities to tax vacant homes.
Taxes
While tax rates will remain the same for individuals and organizations, the key tax component of this budget is that the current gas and fuel tax rate cut will be extended until the end of this year. The original cut temporarily lowered the gasoline tax by 5.7 cents per litre, and the fuel tax by 5.3 cents per litre. The government claimed that on average it has saved a typical Ontario household $320 since it was first introduced in 2022. The cost of this endeavour is approximately $640 million (combined) for 2023/24 and 2024-25.
Cannabis
Of interest to us here at Diplomat, the Budget has committed $31 million over three years to combat the illegal cannabis market. This funding will allow the Ontario Provincial Police to create the Provincial Joint Forces Cannabis Enforcement Teams to conduct operations against illegal storefronts and sales that are conducted on-line illegally.
Opposition Reaction
The Official Opposition NDP Leader Marit Stiles stated that this budget: “…is a missed opportunity for much-needed change. If you’re looking for change, Ford’s budget is not for you. People are looking for better health care and homes they can afford. Instead, they got an uninspired statement from a government that is out of touch and out of ideas.”
For more information, please contact Diplomat Consulting at: hello@diplomatconsulting.com.
Ivan Ross Vrána
Managing Partner
