Ontario back in deficit while pledging billions in affordability initiatives
Just months after the Ontario government touted a $2.1-billion surplus for 2021-22, the province is yet again in the red.
Ontario is projecting a $12.9 billion deficit for 2022-23, according to the fall economic statement released Monday. This shortfall is about $7 billion less than what was projected in the 2022 budget and includes a number of affordability pledges meant to save drivers, small business owners, and seniors money.
The province’s fall economic statement—titled “Ontario’s Plan to Build: A Progress Update”—promises to “put more money into the pockets of the people” while continuing Premier Doug Ford’s pledge to build infrastructure and create more jobs.
The latest financial documents show the government has made about $186.8 billion in revenue, primarily from taxes and federal transfers.
The government attributes the increase in revenue to “higher than expected 2021 taxation revenues” and “higher-than-projected nominal GDP and inflation in 2022.”
They expect to spend about $198.8 billion in 2022-2023, with about $185.2 billion earmarked for programs.
A large portion of the fall economic statement is dedicated to infrastructure, with the province’s capital plan being labelled by the Ford government as “one of the most ambitious in the province’s history.”
Included is an investment of about $159.3 billion over the next 10 years for infrastructure, including about $20 billion in 2022-23.
The government does not provide a specific breakdown by project, but said that about $25.1 billion over 10 years will go into highways, $61.5 billion will be for public transit and more than $40 billion for hospital infrastructure.
The province has also included a number of new or newly-discussed affordability initiatives in their financial update, which they say will be funded from “existing contingencies.”
The fall economic statement promises more than $675 million in income tax relief to businesses over the next three years by temporarily allowing some to expense up to $1.5 million per year in certain capital investments.
They will also widen eligibility for a reduced corporate income tax rate, allowing an estimated 5,500 businesses to save about $185 million.