Ontario’s fiscal update projects deficit at $14.5 billion as province slashes watchdogs

LAURA STONE, TIM KILADZE
TORONTO
THE GLOBE AND MAIL

November 15 at 1:59 PM ET

Ontario’s path back to fiscal balance won’t be easy, the province’s finance minister says, as he revealed the deficit now stands at $14.5 billion, a reduction of $500 million since the Progressive Conservative government took office in June.

In the province’s first fiscal update introduced on Thursday, Finance Minister Vic Fedeli said the government is committed to balancing the books in a “reasonable” time frame – but provided no details as to when that would happen. 

Still, Mr. Fedeli says the province has saved an additional $3.2 billion in program expenses by reducing spending, including cancelling planned tax increases and the previous Liberal government’s cap-and-trade program. However, the government also revealed that cancelling cap and trade cost Ontario $1.5-billion in lost revenues during the current fiscal year, and the fiscal watchdog has said it would lead to a loss of $3-billion in revenue over four years.

The province is also axing three oversight officers, with the fate of their staff unknown. The environment commissioner will be rolled into the auditor general’s office, government officials said, and the French-language commissioner and provincial children’s advocate will be part of the ombudsman’s office, by May 2019.

Ontario Premier Doug Ford’s government is also promising a new tax cut for low-income workers making less than $30,000 a year, a variation on Mr. Ford’s election promise to end income taxes to every worker making minimum wage. 

Called the Low-Income Individuals and Families Tax credit, or LIFT, the initiative would provide some 1.1 million workers up to $850 in personal income tax relief and $1,700 for couples, the government said, ensuring a single person who works full-time at minimum wage pays no personal income tax. 

The government is also eliminating rent control on new rental units to increase housing supply across the province, but says rent control will remain in place for current tenants. The new policy will be a reversal of sorts from an initiative the previous Liberal government put in place, which imposed rent control on all buildings constructed after 1991.

The PC government, which has portrayed itself as aggressively pro-business, also promises to reduce red tape for businesses by 25 per cent by 2022. As previously reported by the Globe, Mr. Ford’s government pledges to support any push for western Canada to eastern Canada pipeline, and vows to fight the federal government’s carbon tax by exploring a suite of measures to publicly reveal its cost on gas prices and home heating bills.

The government is also increasing the threshold for party status to ten percent of the seats in the legislature, which would currently change it from eight seats to 12, a move that will impact the third-party Liberals. The government is proposing to eliminate taxpayer subsidies to registered political parties and constituency associations by 2022.

It is also planning to expand the hours for sales of alcohol in the province from 9 am to 11 pm, seven days a week. 

The government also says it is developing a plan to expand the sale of beer and wine to corner stores, grocery stores and big-box stores, “based on market demand, not government decree.”