Susanna Kelley (Moderator): The Minister of Finance is bringing down his budget Wednesday. With this unprecedented pandemic still upon us, what measures does he need to bring in to help our battered economy while still dealing with a massive health crisis? We asked Chris Loreto, Sarbjit Kaur and David Wills.
Finance Minister Peter Bethlenfalvy has been clear in his pre-budget communications that he will deliver a balanced fiscal plan that continues to focus on handling the public health crisis that is still ravaging the province and begin to put in place the building blocks necessary to support the province’s economic recovery.
This means we will not see spending cuts, or tax cuts. It will be a budget focused on investing in fighting the pandemic and seeding the province’s economic recovery.
A year ago, the popular wisdom was that this budget would be entirely focused on recovery. But COVID-19’s stubbornness and the slow procurement of vaccines means that the government cannot totally shift its focus to recovery.
So, what are we likely to see in the budget?
• There will be a continued focus on investments in healthcare generally, and long-term care and perhaps mental health specifically. The government has made significant progress in rolling out its long-term care capital renewal program and we should expect to see some more definition around the funding of care levels in long-term care. Prior to the pandemic, the government released its mental health strategy and there is still considerable work to be done on where and how the government will meet its 2018 commitments on mental health. It would make sense for the government to include mental health investments in this budget to fulfill its campaign commitments and to also deal with the mental health needs of Ontarians coming out of the pandemic.
• There will likely be additional commitments to help small businesses continue to navigate the impacts of COVID-19 — maybe an expansion of small business grants.
• From a recovery perspective, I believe the government will continue with its focus on skills training investments in the skilled trades, certain health professions like PSWs, and skills upgrading in response to labour market demands through micro-credentials from Ontario post-secondary institutions. I would also expect some more details on the framework within which the new Invest Ontario agency will be operating to attract investment to the province.
• Broadband is likely to be a marquee initiative and a centre piece of Ontario’s recovery plan in this budget. The lack of connectivity outside the GTHA is a major economic gap for Ontario’s competitiveness and the government cannot support recovery without putting a serious plan and money in place to deliver better broadband infrastructure. Physical infrastructure will be secondary in this budget.
This government deserves credit for delivering two budgets in less than six months, which makes you wonder why the federal Liberals cannot deliver at least one in two years. #friendlypartisanjab
The Premier will have to start to do some of the heavy lifting.
The pandemic has created more inequality, and exposed major gaps in our public health (including mental health) and education infrastructure.
Major investments in job creating projects like schools, hospitals and jobs that provide a living wage are needed.
We saw during the pandemic who the essential workers are. And while much lip service was given to them, did their working conditions or wages improve? From Amazon workers, to PSWs, they risked their lives every day. The budget needs to have more than just free tuition for these low wage workers — the job has to be viable.
Housing prices have skyrocketed. It’s harder than ever to achieve what previous generations have been able to establish. There are opportunities to do interesting things post-pandemic to create more housing that is accessible to lower income and middle-class Ontarians.
But it will be interesting to see if the Ford government will bring forward anything truly exciting and ground breaking. Which is what is needed now.
Right now, the feds are doing the hard work of supporting Canadians through this crisis.
Investment number one has to be for permanent funding to public health.
Remember, this government started slashing public health in 2018 prior to the pandemic. We need to make investments now to be better prepared for a future crisis.
With long-term care, the government has already indicated it will double down on privatization. But what is needed are investments that lead to higher standards, more effective oversight and better care for our seniors.
And as Sarbjit mentioned, training of PSWs is not enough. They need higher wages, job protections, more full-time hours and paid sick days.
If we don’t see tax cuts as Chris has suggested, we will see business programs. This government prefers initiatives aimed at employers, not workers.
What would be nice, but is unlikely, is to see some investment in the COVID-19 recovery that at the very least recognizes the need to address climate change, but I am not holding my breath. I suspect most of the effort to be about returning to the past, not mapping out a better path forward.
While this budget will not have spending cuts or tax cuts in it, it will be important for the government to establish a fiscal anchor to provide some sense of fiscal direction for the market, and speaking politically, the Tory base.
I believe the government would be smart (given that Ontario’s net debt is standing at 50% of GDP, and will likely continue to do so for the foreseeable future) to put a stake in the ground to return to balance before the end of this decade.
This will not totally satisfy fiscal hawks, but moving any faster to balance the budget is likely to be both economically and politically disastrous. It is also a responsible thing to do if interest rates spike and all this spending comes home to roost in even bigger debt servicing charges.
I do expect there to be a heavy federal-provincial dynamic around health care in this budget. The Premiers have been consistent in their demand that the federal government increase health transfers with a target to be a 35% partner by mid-decade.
With a federal election imminent, it will be good politics and good policy for Premier Ford to argue strongly for increased federal transfers. I would suggest that he go even further and demand that the federal government be a 50/50 partner once again by 2030.
I fear this budget will not address problems exposed during the pandemic.
With a focus on fiscal responsibility this soon after such a devastating period, we’re not going to see the supports we need for everyday Ontarians who are struggling.
On the mental health front young people have been hit hard and we don’t even know the true extent of the impacts. Anyone who’s ever tried to get mental health help knows it’s a long and frustrating process. If we can put police officers in schools why can’t we put mental health workers in schools?
In terms of long-term care — will the deaths of all the seniors who died alone under horrible conditions be acknowledged? Or will we proceed with business as usual and forget how truly horrible this pandemic has been for many?
Workers need more than banging pots and pans — they deserve proper wages, working conditions and a pathway to get out of dead end, gig economy jobs. These are the employers this government supports with initiatives etc. rather than thinking about what are the good jobs that we need to rebuild our economy on. Green jobs that also support the environment and climate change goals. Not paving over wetlands to build warehouses.
I love how provincial Conservative governments preach fiscal restraint while demanding more liberal (small L) spending by the federal government.
If they want greater federal involvement, I would love to see Ontario endorse national pharmacare and childcare programs as a path to recovery, especially as both those programs would be most beneficial to those who got hurt the most by COVID-19 — women and lower wage workers.
But let’s remember — this will be an election budget. The fixed date is June next year, so Ford will need and want to set a path that Conservatives can rally behind.
We know what those priorities always are: tax cuts and spending cuts.
The downside of this approach is that it pits us against each other. We will see this budget start a new narrative on recovery, one that favours private sector over public sector.
We will not see much for education, and the war against teachers will continue. That war speaks to their base. We will see training programs that benefit employers, but which will do little to improve wages.
In short, nothing will be surprising. The election will effectively start the day of the budget.
I’ll give a spoiler alert. No matter what is in it, Tory supporters will say it is the greatest budget ever. The NDP will criticize it for not doing enough for workers and those most in need, and the Liberals will use it as an opportunity to try and find their ideological ground to run on.
Chris Loreto is the 1st Vice President of the Ontario PC Party and previously served as Chief of Staff to Ontario’s Attorney General and Minister Responsible for Native Affairs in the Harris government. He is currently Principal at StrategyCorp. David Wills is a Senior Vice President at Media Profile. He worked as NDP political staff at Queen’s Park and provides counsel to federal, provincial and municipal elected officials. Sarbjit Kaur has worked in Liberal politics for 20 years, including as Director of Communications to a cabinet minister in the McGuinty government. She is a former journalist and currently co -founder of KPW Communications.