Insights

2018 Ontario Budget: "A Plan for Care and Opportunity”

Posted by
Zak Paget
Insights

2018 Ontario Budget: "A Plan for Care and Opportunity”

Écrit par
Zak Paget

This afternoon, Ontario Finance Minister Charles Sousa delivered the Ontario government’s 2018 Budget. Given the broad strokes painted in the Speech from the Throne just nine days ago and the unprecedented volume of pre-budget announcements in the days since, there were few surprises in the voluminous document (clocking in at 308 pages). That isn’t to say that there weren’t any new programs within the budget papers, or that previously unannounced initiatives aren’t of consequence – seniors and the many Ontarians without workplace health benefits will be pleased with a couple of the most significant highlights – but the communications strategy was clearly to lay the groundwork with major campaign-style announcements over a number of days instead of saving the biggest or most newsworthy for the actual Budget Day.

Taken together though, the sheer scale of new initiatives being promised by the Liberal government is notable – as is the cost, clocking in at new investments totaling $20.3 billion over the next three years. Every pre-election budget acts in varying degrees as a campaign platform, with signature initiatives to clearly define and communicate a set of values as well as attract attention, and, more practically, voter interest. And as suggested to FHR, the Liberal government feels strongly that this Budget strongly articulates its values and provides a very clear contrast that it can run on in the upcoming election. As Finance Minister Charles Sousa said during this afternoon’s Budget speech, “This Budget makes the choice to help the people of Ontario better manage the pressures of everyday life. This Budget provides greater care for our children, students, and seniors… And keeps us on our path of building Ontario’s economy…boosting growth, creating more jobs and expanding access for all.”

It also follows the strategy that we previously anticipated - an expansion of popular, progressive programs that people have benefited from, the introduction of major new funding into areas that people have been demanding action on and a challenge to Progressive Conservatives to say which programs they would cut in order to reduce the budget and get closer to balance. Predictably, PC leader Doug Ford reacted by charging that Premier Wynne is “trying to buy your vote” with the public’s money. This strategy will also seek to crowd out the NDP on the left said she would “not support any of these programs in this budget. It’s a meagre amount.”

Despite Ms. Horwath’s sentiment, rarely have so many new programs or significantly expanded programs been introduced at one time. It is designed to appeal to everyone - young people, parents, and seniors - with attractive, generous, and expensive programs.

The risk the Liberal government has decided it must take is that voters will decide that, taken together, the new programs address enough of their concerns or desires that they will look past the cumulative cost. The cost is real, and likely to attract a share of headlines - following a surprise 2017-18 surplus of $600 million, the government will run a projected deficit of $6.7 billion in 2018-19 (less than the widely reported $8 billion), $6.6 billion in 2019-20, $6.5 billion in 2020-21, and no return to a balanced budget until 2024-25.

The Speech from the Throne made clear that ‘Fair’ has been replaced with ‘care’ as the dominant theme. And while there is significant new spending in areas around education and expansions of business incentive programs, with an overall increase in health spending of $5 billion over three years, this stands out as a healthcare budget.

Health care

  • A new Ontario Drug and Dental Program, reimbursing 80 per cent, up to a maximum of $400 per single person, $600 per couple and $700 for a family of four with two children, of eligible prescription drug and dental expenses each year, for those without workplace health benefits or not covered by OHIP+ or other government programs.
  • The new Seniors’ Healthy Home Program which would, starting in 2019-20, provide over $1 billion over three years to help seniors with the costs of maintaining their homes. The benefit would provide up to $750 per year for every eligible household led by seniors who are 75 years or older.
  • An additional $650 million in home care over the next three years that will make available 2.8 million more hours of personal support, including caregiver respite, plus 284,000 more nursing visits and 58,000 more therapy visits.
  • $300 million over three years in new funding for long-term care, starting with $50 million in 2018–19 to hire a registered nurse for every home, and setting a goal of increasing the provincial average to four hours of daily care per resident by 2022.
  • A major expansion of OHIP+ to make prescriptions completely free for everyone 65+. The government estimates that by eliminating the Ontario Drug Benefit annual deductible and co-pay, this saves the average Ontario senior $240 per year.
  • An additional $822 million in hospital funding in 2018–19, contributing to a 4.6  per cent increase and bringing the total to nearly $19 billion.
  • An additional $2.1 billion over the next four years for mental health and addictions services for people of all ages, bringing the province’s total investment to $17 billion over four years.

Child care

  • An additional investment of more than $2.2 billion over three years to increase access to child care through free preschool child care for children aged two-and-a-half until they are eligible for kindergarten. The government estimates this will save a family with one child $17,000, on average, and builds on the savings families get from full-day kindergarten.
  • The government is also:
  • Investing $534 million over the next six years to build 10,000 preschool child care spaces in schools and 4,000 community-based spaces to ensure there is appropriate capacity.
  • Investing $1.6 billion over five years in capital funding to create 45,000 new licensed child care spaces across the province.

Jobs and Prosperity Fund

The government is doubling down on its incentives program to support existing jobs and create new ones in priority areas, renewing the Jobs and Prosperity Fund with an increase of $900 million over the next 10 years and a more flexible framework aimed at encouraging business investments in machinery, equipment and innovation and protecting intellectual property assets.

Three new funds have been established under the JPF:

  • Venture Technologies Fund (venture capital financing)
  • Transformative Technology Partnerships Fund (aimed at technologies such as AI, autonomous vehicles, advanced computing and quantum technologies)
  • Greater Toronto and Hamilton Area Fund (small and medium-sized businesses that had previously struggled to qualify under the previous JPF program design)

The Ontario election is set for June 7, 2018. We now have a very good idea on what the Ontario Liberal party will be running on. We now have to wait and see how platforms the Progressive Conservatives and NDP will run on will compare.

This afternoon, Ontario Finance Minister Charles Sousa delivered the Ontario government’s 2018 Budget. Given the broad strokes painted in the Speech from the Throne just nine days ago and the unprecedented volume of pre-budget announcements in the days since, there were few surprises in the voluminous document (clocking in at 308 pages). That isn’t to say that there weren’t any new programs within the budget papers, or that previously unannounced initiatives aren’t of consequence – seniors and the many Ontarians without workplace health benefits will be pleased with a couple of the most significant highlights – but the communications strategy was clearly to lay the groundwork with major campaign-style announcements over a number of days instead of saving the biggest or most newsworthy for the actual Budget Day.

Taken together though, the sheer scale of new initiatives being promised by the Liberal government is notable – as is the cost, clocking in at new investments totaling $20.3 billion over the next three years. Every pre-election budget acts in varying degrees as a campaign platform, with signature initiatives to clearly define and communicate a set of values as well as attract attention, and, more practically, voter interest. And as suggested to FHR, the Liberal government feels strongly that this Budget strongly articulates its values and provides a very clear contrast that it can run on in the upcoming election. As Finance Minister Charles Sousa said during this afternoon’s Budget speech, “This Budget makes the choice to help the people of Ontario better manage the pressures of everyday life. This Budget provides greater care for our children, students, and seniors… And keeps us on our path of building Ontario’s economy…boosting growth, creating more jobs and expanding access for all.”

It also follows the strategy that we previously anticipated - an expansion of popular, progressive programs that people have benefited from, the introduction of major new funding into areas that people have been demanding action on and a challenge to Progressive Conservatives to say which programs they would cut in order to reduce the budget and get closer to balance. Predictably, PC leader Doug Ford reacted by charging that Premier Wynne is “trying to buy your vote” with the public’s money. This strategy will also seek to crowd out the NDP on the left said she would “not support any of these programs in this budget. It’s a meagre amount.”

Despite Ms. Horwath’s sentiment, rarely have so many new programs or significantly expanded programs been introduced at one time. It is designed to appeal to everyone - young people, parents, and seniors - with attractive, generous, and expensive programs.

The risk the Liberal government has decided it must take is that voters will decide that, taken together, the new programs address enough of their concerns or desires that they will look past the cumulative cost. The cost is real, and likely to attract a share of headlines - following a surprise 2017-18 surplus of $600 million, the government will run a projected deficit of $6.7 billion in 2018-19 (less than the widely reported $8 billion), $6.6 billion in 2019-20, $6.5 billion in 2020-21, and no return to a balanced budget until 2024-25.

The Speech from the Throne made clear that ‘Fair’ has been replaced with ‘care’ as the dominant theme. And while there is significant new spending in areas around education and expansions of business incentive programs, with an overall increase in health spending of $5 billion over three years, this stands out as a healthcare budget.

Health care

  • A new Ontario Drug and Dental Program, reimbursing 80 per cent, up to a maximum of $400 per single person, $600 per couple and $700 for a family of four with two children, of eligible prescription drug and dental expenses each year, for those without workplace health benefits or not covered by OHIP+ or other government programs.
  • The new Seniors’ Healthy Home Program which would, starting in 2019-20, provide over $1 billion over three years to help seniors with the costs of maintaining their homes. The benefit would provide up to $750 per year for every eligible household led by seniors who are 75 years or older.
  • An additional $650 million in home care over the next three years that will make available 2.8 million more hours of personal support, including caregiver respite, plus 284,000 more nursing visits and 58,000 more therapy visits.
  • $300 million over three years in new funding for long-term care, starting with $50 million in 2018–19 to hire a registered nurse for every home, and setting a goal of increasing the provincial average to four hours of daily care per resident by 2022.
  • A major expansion of OHIP+ to make prescriptions completely free for everyone 65+. The government estimates that by eliminating the Ontario Drug Benefit annual deductible and co-pay, this saves the average Ontario senior $240 per year.
  • An additional $822 million in hospital funding in 2018–19, contributing to a 4.6  per cent increase and bringing the total to nearly $19 billion.
  • An additional $2.1 billion over the next four years for mental health and addictions services for people of all ages, bringing the province’s total investment to $17 billion over four years.

Child care

  • An additional investment of more than $2.2 billion over three years to increase access to child care through free preschool child care for children aged two-and-a-half until they are eligible for kindergarten. The government estimates this will save a family with one child $17,000, on average, and builds on the savings families get from full-day kindergarten.
  • The government is also:
  • Investing $534 million over the next six years to build 10,000 preschool child care spaces in schools and 4,000 community-based spaces to ensure there is appropriate capacity.
  • Investing $1.6 billion over five years in capital funding to create 45,000 new licensed child care spaces across the province.

Jobs and Prosperity Fund

The government is doubling down on its incentives program to support existing jobs and create new ones in priority areas, renewing the Jobs and Prosperity Fund with an increase of $900 million over the next 10 years and a more flexible framework aimed at encouraging business investments in machinery, equipment and innovation and protecting intellectual property assets.

Three new funds have been established under the JPF:

  • Venture Technologies Fund (venture capital financing)
  • Transformative Technology Partnerships Fund (aimed at technologies such as AI, autonomous vehicles, advanced computing and quantum technologies)
  • Greater Toronto and Hamilton Area Fund (small and medium-sized businesses that had previously struggled to qualify under the previous JPF program design)

The Ontario election is set for June 7, 2018. We now have a very good idea on what the Ontario Liberal party will be running on. We now have to wait and see how platforms the Progressive Conservatives and NDP will run on will compare.

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