Ontario Budget 2022: Analysis
A campaign budget to differentiate the Conservatives from the Opposition Parties
With mere days to spare, the Ford government released the 2022 Ontario Provincial Budget which will serve as the basis of their election platform. While almost all of the big-ticket items were already announced over the last several weeks, the Ford government’s budget lays a path that is intended to differentiate them from the Liberals and NDP, deflate support for the opposition parties from some key groups, and focus on vote rich areas that the Conservatives need to win if they hope to remain in government.
The provincial budget, called Ontario’s Plan to Build, clearly comes down on building highways in the vote rich GTA, including the Bradford Bypass and Highway 413, projects that are vehemently opposed by the Liberals, NDP and Greens, but perhaps supported by the tens of thousands of Ontario voters that live (and drive) in these regions and are caught in what is considered to be the worst traffic in North America. Indeed, it is the GTA (and really, the “905” which is the area code that surrounds the City of Toronto) where provincial governments are won and lost. Not putting too fine a point on it, the cover of the Budget is a picture of a highway with traffic that is moving – a rare event in the GTA.
Another political theme in the Budget is unlocking the economic potential of “the North”, with commitments to building road access to unlock the “Ring of Fire” and First Nations communities, along with several additional measures that are aimed at encouraging economic development, investment and growth. Politically, the Conservatives believe that they can pick up seats in what has previously been considered a bastion of Liberal and NDP support, in part because of demographic changes in several northern ridings, and the decisions by popular long-time MPPs Michael Gravelle (Liberal from Thunder Bay) and John Vanthof (NDP from Northeastern Ontario) to retire from provincial politics.
The Budget document is divided into five sections, which includes:
Rebuilding Ontario’s Economy: in addition to the significant Auto Sector investments made over the last four weeks ($12 billion to-date), the provincial government recently announced a Critical Minerals Strategy to strengthen Ontario as a leading global supplier of critical minerals (including materials for EV batteries), and an extension of the Regional Opportunities Investment Tax Credit (which supports investment in Northern Ontario);
Working for Workers: long considered the partner of left-leaning parties, the Conservatives have attempted to make strides in courting the private sector union movement with announcements over the last year aimed at this critically important “voting block”. This includes an additional $114 million over three years in a Skilled Trades Strategy, raising the minimum wage to $15.50 later this fall, and other measures aimed at gig economy workers previously announced;
Building Highways and Key Infrastructure: the Ford government proposed to invest $25.1 billion over the next decade to plan, build, or rehabilitate highways, bridges and other road networks in Ontario, almost $62 billion in capital over 10 years for public transit, including expanding GO rail services, as well as subway extensions along the Sheppard “Stub”way into Scarborough, and Eglinton Crosstown West Extension towards Pearson Airport;
Keeping Costs Down: aka “tax cuts”, including rebate cheques to Ontario drivers that have paid for license renewals over the last year (well-timed to occur in the lead-up to the upcoming campaign), as well as cuts to the gas and fuel taxes by over 5 cents per litre for 6-months as a result of surging fuel prices caused by the Russian invasion of Ukraine. Additional measures include enhancing the LIFT tax credit for low-income individuals and families by $300 each for 1.1 million workers, signing (finally) the $13.2 billion Early Learning and Child Care program with the federal government, and continuing the existing tuition freeze for colleges and universities;
A Plan to Stay Open: investing $40 billion in capital in Ontario’s hospital system and other health care infrastructure which will support 50 major hospital projects and add 3000 new beds over the next decade, retention bonuses for nurses ($5K each over two years), and $2.8 billion over three years to make the current temporary PSW/DSW enhancement permanent. The Province is also forecasting that the number of new long-term care beds (which had been flatlined for years) will increase by 30,000 beds by 2026 (half of which will be non-profit run, and the other half by private sector operators).
Looking at the broader economic picture, the Conservatives project a deficit of $19.9 billion for the 2022-23 fiscal year, and to reach a surplus by 2027-28, with net debt to GDP stabilizing at around 41% over the next four years.
Like all budgets, this budget is a political document that aims to differentiate the Conservatives from the opposition parties, and divide the opposition parties from their traditional voting base. The NDP and Greens released their platform earlier this week, and the Liberals will shortly be releasing their full platform in the days ahead. Campbell Strategies will provide a full update comparing the party platforms, along with the latest polling in the days ahead.
For more information on the Ontario Budget, please visit: https://budget.ontario.ca/2022/contents.html
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