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Doug Ford government tries for a reboot with its latest fiscal plan
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Finance minister's update includes no new spending cuts, but austerity remains the theme

Mike Crawley · CBC News · Posted: Nov 07, 2019 4:00 AM ET | Last Updated: 4 hours ago

The Ontario government projects its corporate tax revenues for 2019-20 will be $936 million higher than forecast in the April budget. (Nathan Denette/The Canadian Press)
Premier Doug Ford's government is listening and Finance Minister Rod Phillips really wants you to know that.

"We listened to Ontarians," said Phillips in a news conference after delivering the government's budget update on Wednesday afternoon.

"We listened to what they thought was working well in the plan that we had, and we listened to the concerns that they had," Phillips added.

"So you can expect this is a government that has listened and is going to continue to listen, and make sure that we make adjustments as we go along."

The fiscal tally of all that listening is found in the pages of Phillips's fall economic statement. The document accounts for the government's recent backtracks, updating the budget from the $163.4 billion spending plan tabled in April by Vic Fedeli, whom Ford dumped as finance minister two months later.

The fall economic statement is part of the Ford government's attempts to portray itself as new and improved, striking a new tone, turning over a new leaf. The budget update tries to do this by highlighting the spending cuts on which the government reversed course and recasting them as spending increases.

Finance Minister Rod Phillips delivers his budget update in the Legislature, as Premier Doug Ford, bottom right, applauds. (Chris Young/The Canadian Press)
Technically, it's true the PCs are increasing program spending by $1.3 billion from the April budget. In reality, this is simply putting some spending cuts that didn't happen back on the government's books.

Does a reversal of a spending cut equal a spending increase? NDP leader Andrea Horwath doesn't think so.

The fiscal update reflects merely "a softening of their previous cuts, a backtracking on some of their cuts, a delaying of some of their cuts, but really the cuts are still coming," Horwath said Wednesday on CBC's Power and Politics.

She said the document will not put a single laid-off nurse back to work at a hospital.

• Ford government projects lower deficit in first financial update since controversial cuts

• What to expect next from the Doug Ford government

The new finance minister hasn't fundamentally changed the budget that the old finance minister put in place, and acknowledged as much in his news conference.

"This isn't about grand gestures," said Phillips. "It's about incremental important changes that make life easier for people."

The update shows — just as the April budget did — that nearly every ministry is undergoing spending cuts this year from 2018-19 levels. Nominal increases in spending on health and education are not increases in real-dollar terms when population growth and inflation are considered.

Ontario's Finance Minister Rod Phillips, right, is accompanied by Premier Doug Ford before delivering the government's fall economic statement. (Chris Young/The Canadian Press)
One key number in the fall economic statement shows how the PCs have under-budgeted for the growing demand for health services. There's an increase of $227 million on the books attributed to "increased utilization of physician and other services under the Ontario Health Insurance Plan."

John Fraser, the Liberal interim leader, accused the PCs of continuing to exaggerate the size of the deficit to justify cuts.

"We just can't trust their numbers," said Fraser on Wednesday.

He says the Ford government is making the province's fiscal position look worse than it is by low-balling estimated revenues. It's forecasting a two per cent increase in tax revenue, when the average annual increase over the past five years has clocked in at 6.4 per cent.

• Ontario's deficit was $7.4B last year — far lower than the Ford government claimed it was

• ANALYSIS
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The government admits its tax revenue estimates for the current year are already off. It has boosted its corporate tax revenue projection by $936 million and personal income tax revenues by $525 million.

The extra revenues will make it easier to balance the budget. Yet the Ford government's overall goal is still restraint, and there's more austerity to come. Its forecasts for total program spending in the coming two fiscal years do not keep up with projected rates of inflation and population growth.

What this all means: before concluding that the Ford government has really hit the brakes on cuts, wait for the budget in March.

 

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Ford government projects lower deficit in first financial update since controversial cuts
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The projected shortfall remains higher than last year's figure

Nick Boisvert · CBC News · Posted: Nov 06, 2019 3:39 PM ET | Last Updated: November 6

Ontario Premier Doug Ford has promised to balance the provincial books by 2023-24. (Chris Young/The Canadian Press)
Ontario says it will now beat its deficit target by $1.3 billion over the next year, although the provincial deficit continues to grow under the Ford government.

The updated numbers were released Wednesday in the Progressive Conservatives' fall economic statement.

The government is now forecasting a deficit of $9 billion for the 2019-20 fiscal year. The province previously said the deficit would be $10.3 billion in its budget released last spring.

"Over the past 16 months under the leadership of Premier Ford, we have made considerable progress," Finance Minister Rod Phillips told the Legislature.


"We worked diligently to reduce wasteful spending, fix inefficiencies and make government smarter."

• Doug Ford's budget update will promise to 'build Ontario together'

However, the Tories' projected deficit remains higher than last year's figure, which was calculated at $7.4 billion, according to 2018-19 public accounts.

The government says it remains on track to balance the budget by 2023-24, after the next provincial election.

New investments and changes
While the Ford government is touting an additional $1.3 billion in investments over its spring budget document, the vast majority of that is made up of previously announced spending.

That includes $637 million on children's and social services, $404 million on health care and $186 million on education.

Some of that spending was announced after the government came under intense scrutiny for certain cuts, including those to education and the Ontario autism program.

Parents and educators protested at Queen's Park following cuts to Ontario's autism program announced in the spring budget. The PC government has since rolled back many of those cuts. (Evan Mitsui/CBC)
The Ford government has walked back some of those cuts since the spring budget, which it is now counting as additional spending in Wednesday's fall economic statement.

Some of the newly announced investments and initiatives include:

• Reducing the small business Corporate Income Tax rate to 3.2 per cent from 3.5 per cent, effective Jan. 1, 2020.
• Reducing the aviation fuel tax rate to 2.7 cents per litre from 6.7 cents per litre.
• Allowing free access for children to attractions, museums, galleries and historic sites (No start date has been announced).

Ontario says the reduced small business tax rate will save businesses $70 million in its first year.

The aviation tax cut is designed to save money for residents in Northern Ontario by making air travel more affordable.

• Ontario's deficit was $7.4B last year — far lower than the Ford government claimed it was

• Panel recommends major changes to Ford government's controversial autism program

NDP Leader Andrea Horwath criticized the Ford government for "backtracking" on previous cuts and presenting the moves as new investments.

"There is definitely not $1.3 billion in new funding here," she said.

Howarth said a series of ongoing issues remain unresolved, including hallway medicine, the loss of teaching jobs and deteriorating school infrastructure.

"Doug Ford's cruel and callous cuts are here to stay," she added.

Cannabis revenue up, new rules on the way
Ontario has also significantly increased its forecasted revenue from cannabis sales. In the spring budget, the PCs said they anticipated $75 million in revenue over the coming year. The government now says it expects to take in $140 million during the same period.

The financial outlook also calls for changes to the way cannabis can be sold in Ontario.

The PCs are proposing that licensed producers be allowed to open retail stores at their production sites. That move "would further increase consumer access to legal retail stores," according to the document.

The Ford government wants to let private retailers sell cannabis online. That method of shopping is currently only available at the publicly owned Ontario Cannabis Store. (Sean Kilpatrick/The Canadian Press)
There are also plans to allow existing retailers to sell cannabis online and to allow stores to take phone orders that customers could pick up in store.

Both changes would require amendments to existing legislation.

A conciliatory tone
After enduring months of protests and ongoing labour unrest with various teachers' unions, the Ford government appears to be taking a more conciliatory and collaborative approach.

"We listened to Ontarians, we listened to what they thought was working well in the plan that we had, and we listened as well to the concerns that they had," Phillips told reporters Wednesday afternoon.

"You can expect that this is a government that is going to listen."

The fall economic outlook does not appear to contain any further spending cuts over the sometimes-controversial spring budget.

The government has also announced plans to hold a series of consultations before it releases its next budget in 2020.

Ontario residents, businesses and other organizations are invited to take part.

 

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