• 2022 Ontario Provincial Budget Review

    2022 Ontario Provincial Budget Review

     

    The Ontario government released their 2022 budget on April 28th. Unsurprisingly, this budget is focused on recovery efforts from the pandemic ranging from infrastructure development to deficit management. The following are a few of the highlights from the budget as well as reflection on the budget from the perspective of the Ontario Chamber of Commerce.

     

    Workforce Development

     

    As many businesses struggle with the labour shortage, more resources are needed to train new workers in order to keep businesses running efficiently. The budget includes an additional $114 million for the skilled trades strategy across three years as well as $16 million for the expansion of job training facilities. There is also $268.5 million in the budget to strengthen training programs at Employment Ontario. These initiatives will be backed by a real-time data approach in order to adapt to changes in the market as they happen.

     

    Cost of Living

     

    It is becoming increasingly difficult for families and individuals to purchase or rent homes and afford necessities in Ontario. With climbing inflation, cost of living has become a barrier for employers that are looking to keep workers within their city. The 2022 budget includes a proposed expansion of the low-income workers tax credit for individuals making up to $50,000 annually. The budget also includes a commitment of $395 million to go towards child care programs to ensure that families are able to continue working when they have children. While these programs are sure to help Ontarians with most cost of living issues, the OCC would also like to see the government reinstate the Basic Income program in Ontario. This would ensure a standard income level for all Ontarians across the province.

     

    Infrastructure and Supply Chains

     

    Infrastructure accounts for one of the largest portions of the 2022 Budget with $159 billion scheduled for key infrastructure projects over the next ten years. $4 billion of this will go towards highway projects to maintain and refresh Ontario’s major roads while $62 billion will go to public transit investments to improve commuting and transit across the Greater Golden Horseshoe and Southwestern Ontario. Housing is also a focus of this portion of the budget with the Ontario government committing to building 1.5 million new homes over the next decade.

     

    Health Care

     

    The Ontario health care system is currently dealing with a shortage of health human resources and will provide incentives to keep nurses employed for longer. The budget includes $764 million over two years available to nurses in incentive packages up to $5,000. There is also $42.5 million available for two years to help expand the number of students in medical training programs. $204 million will be added to improve Ontario’s mental health and addiction services as well as $5 million for dementia support strategies.

     

    Fiscal Balance

     

    While the 2022 Budget currently sits at $199 billion dollars, Ontario’s deficit is expected to decline starting next fiscal year and will be balanced by 2027/2028. As restrictions were lifted, households began to spend more money which saw an increase in tax revenue across the province. The deficit is currently at $13.5 billion and will increase to $19.9 million for 2022/2023. This puts the expected net debt-to-GDP ratio at a healthy 41.4% for 2022/2023. This is expected to stay below the target of 42%. Supply chain issues and the Ukrainian war continue to create economic challenges across the globe and present some uncertainty into Ontario’s economic forecast as inflation and interest rates climb.