Ontario Minister of Finance Peter Bethlenfalvy has tabled a budget that reinforces pledges to build major transit and highway projects, supports the province’s critical minerals strategy and boosts capacity for the skilled trades.
Among notable capital spending pledges, the government’s plan to spend $27.9 billion on highway expansion and rehabilitation over the next decade represents an increase of $2.8 billion over the $25.1-billion spend contained in the fall Economic Outlook.
The finance minister release Budget 2023, billed as Building a Strong Ontario, in the Ontario legislature March 23.
“It is a plan for a strong economy now and for the future,” said Bethlenfalvy. “It’s a plan to build more roads, more highways, more transit and more broadband. It’s a plan to build new long-term-care homes, more hospitals, schools and childcare spaces. It’s a plan to build the critical minerals sector in Ontario’s north and the same time invest in clean green steel in Hamilton and Sault Ste. Marie.”
The minister highlighted two new programs announced earlier in the week as part of its industrial growth strategy, the Ontario Made Manufacturing Investment Tax Credit and a new Skills Development Fund (SDF) capital stream.
The former sees the creation of a new 10-per-cent refundable corporate income tax credit of up to $2 million a year for Canadian-controlled private corporations on qualifying investments in buildings, machinery and equipment for use in manufacturing or processing in the province.
The $224-million skills development capital plan will enable training providers such as labour groups, indigenous centres, business and industry organizations to build new training facilities and modernize existing centres.
Ontario’s 2022–23 deficit is projected to be $2.2 billion, $4.4 billion lower than the outlook published in the 2022–23 Third Quarter Finances forecast.
Bethlanfalvy now anticipates that the government deficit will be eliminated by 2024–25, three years earlier than forecasted in the 2022 Budget. The deficit is expected to be $1.3 billion in 2023–24 and the first surplus this decade is targeted to be $0.2 billion in 2024–25. The government is projecting a surplus of $4.4 billion in 2025–26.
“Serious times call for a serious budget,” Bethlanfalvy said. “While much has changed since our last budget, economic circumstances have confirmed our plan is the right one.”
The Advancing Ontario’s Critical Minerals Strategy will receive a boost of $3 million in 2023–24 and $3 million in 2024–25 with an expansion of the Ontario Junior Exploration Program. Bethlanfalvy said the government will continue to support the approvals process for an all-season road to the Ring of Fire and again called on the federal government to contribute to infrastructure for the mining region. But there was no indication the government will extend funding for infrastructure in the region beyond its current pledge of $1 billion.
Other highlights on Budget 2023 include:
- Construction will start on several highway projects including the bridge crossing over the future Bradford Bypass. The government is also initiating the next phase of construction for the new Highway 7 between Kitchener and Guelph and is continuing work to widen Highway 401 from Pickering through eastern Ontario as well as progressing on plans to build Highway 413;
- The government will spend more on supportive housing with an additional $202 million each year in the Homelessness Prevention Program and Indigenous Supportive Housing Program;
- Ontario’s long-term public infrastructure spending target is $184 billion over the next 10 years. The spend includes $70.5 billion for transit over the next decade;
- The government aims to boost corporate competitiveness by enabling an estimated $8 billion in cost savings and support for some Ontario employers in 2023, with $3.6 billion going to small businesses. The plan includes expanding access to the small business Corporate Income Tax rate by increasing the phase-out range. This would provide Ontario’s small businesses with additional Ontario income tax relief of $265 million from 2022–23 to 2025–26;
- Capital spending includes $48 billion on hospital infrastructure over the next 10 years, with support for more than 50 hospital projects that would add 3,000 new beds over 10 years;
- The budget includes $15 billion in capital grants over 10 years to expand and upgrade schools and to help create 86,000 new child care spaces by December 2026.
The Ontario government is also calling on the federal government to defer the HST on all new large-scale purpose-built rental housing projects as a measure to boost rental housing affordability.