Ontario 2024 Budget Summary

The Ontario 2024 Budget arrives just over 2 years before the next provincial election. Amidst a backdrop of economic uncertainty and global instability, the Ford Government has chosen to pivot on their path to balance, continuing to make increased investments in government priorities such as health care, post secondary education and training, infrastructure, and housing. In doing so they are delaying a return to a balanced budget to 2026-27 instead of the previously announced goal of 2025-26.

Ontario’s 2024 Budget Highlights

Advanced Computing and AI:

  • Allocation of an additional $18 million over three years for Ontario’s advanced research computing facilities to support research in artificial intelligence.
  • Investment of $47.4 million for the refresh of supercomputers at the University of Toronto and the University of Waterloo.
  • Ontario investing $5 million in exploring digital twins for public infrastructure projects.
  • Digital twins: virtual models continuously updated with data to reflect physical state.
  • Potential use: assess issues with water treatment systems, underground infrastructure.
  • Digital infrastructure allows running simulations for proposed improvements, assessing performance issues.
    • Benefits: improve capital project delivery, leverage existing infrastructure and data effectively
    • Goals: keep costs down, manage risks, mitigate potential schedule delays
  • Initiative led by Infrastructure Ontario, partnering with local and global organizations like Toronto Metropolitan University
  • Aim to leverage expertise in digital twins, modernize delivery of public infrastructure.


Ballooning Deficit:

  • Ontario forecasts a $9.8 billion deficit for the upcoming fiscal year, nearly doubling the previous projection.
  • The deficit is expected to decrease to $4.6 billion in 2025-2026 before the province achieves a modest surplus.
  • High-interest rates, increased public sector salaries, infrastructure spending, and gas tax relief contribute to deficit figures.


Investments in Home and Community Care:

  • Allocation of $2 billion over three years to enhance the home and community care sector, aimed at increasing compensation for care providers and stabilizing services.
  • Base funding for healthcare projected to rise from $85 billion to $89.9 billion by 2026-2027.
    Support for Sport, Recreation, and Community Facilities:
  • Introduction of a $200 million application-based fund for new and revitalized sport, recreation, and community facilities over three years.
  • Addressing the infrastructure deficit in the sport and recreation sectors.


Police Helicopters and Auto Theft:

  • Investment of $46 million over three years for the purchase of four new police helicopters to enhance patrols and response times in the Greater Toronto Area.
  • Allocation of $49 million over three years to combat auto theft, supporting the Ontario Provincial Police and auto theft prosecution response teams.


Auto Insurance Reforms:

  • Implementation of auto insurance reforms to create affordable options, improve access, and modernize the system.
  • Shift towards optional benefits while maintaining mandatory coverage for medical, rehabilitation, and attendant care.


Housing Starts and Housing Support:

  • Projected increase in housing starts over the next several years, although still below the target of building 1.5 million homes by 2031.
  • Investment of over $1.8 billion in infrastructure funds to support housing initiatives by municipalities.
    Mental Health and Addictions Support:
  • Establishment of three mobile mental health clinics and allocation of $124 million over three years for the Addictions Recovery Fund.
  • Additional investment of $396 million over three years for mental health and addictions initiatives.


These highlights from the 2024 Ontario Budget showcase the government’s focus on addressing fiscal challenges, enhancing healthcare and education, supporting community development, tackling crime, reforming insurance, boosting housing, and investing in advanced technologies. The complete details of the Ontario Budget 2024 can be found below.

Chapter 1: Building a Better Ontario Section A: Building Ontario

Rebuilding Ontario’s Economy: Ontario Made Manufacturing Investment Tax Credit

  • Offers a 10% refundable corporate income tax credit for eligible investments in manufacturing or processing in Ontario.
  • Provides up to $2 million per year for qualifying corporations.
  • Aims to lower costs and facilitate investment for local manufacturers.


Advanced Manufacturing and Innovation Competitiveness (AMIC) Stream:

  • Launched in January 2022 under the Regional Development Program, budgeted at $40 million.
  • Targets sectors like automotive, aerospace, and life sciences.
  • Provides funding and advisory services to aid small and medium-sized enterprises (SMEs).
  • Additional funds allocated in 2024 to enhance support for SMEs and improve competitiveness.

 

Boosting Advanced Manufacturing Through the Regional Development Program:

  • Involves investments like Siltech Corporation’s $100 million project.
  • Aims to support Siltech’s investment and create 51 well-paying jobs.
  • Focuses on fostering growth in the manufacturing sector and reinforcing supply chains.

 

Building a World-Leading Electric Vehicle and Battery Supply Chain

  • Electric Vehicle Production:
    • Notable investments by General Motors and Ford to transform manufacturing plants for EV production.
    • Volkswagen and Stellantis N.V. investments in EV battery manufacturing.
    • Umicore’s plan to build North America’s first industrial-scale cathode and precursor materials plant.
    • Investments by companies like Magna International and Mitsui High-tec to expand EV parts manufacturing.
    • Creation of jobs and investment in battery enclosure facilities and motor core manufacturing.
  • Attracting Investments Through Invest Ontario

 

Additional Funds for Invest Ontario Fund:

  • Allocation of an additional $100 million to attract strategic investments.
  • Aims to create good-paying jobs, encourage innovation, and support stronger supply chains.

 

Leveraging Northern Ontario’s Natural Resources – Critical Minerals Strategy and Forest Sector Strategy:

  • Initiatives to unlock the economic potential of critical minerals and support sustainable growth in the forestry industry.
  • Focus on economic development in Northern and Indigenous communities.
  • Developing Critical Infrastructure for the Ring of Fire:
    • Allocation of $1 billion to support critical infrastructure development, including all-season roads and broadband connectivity.
    • Aims to unlock mining projects and improve access to services for First Nations communities.
    • Enhancing the Critical Minerals Innovation Fund
    • Investment in Research and Development
    • Additional funding of $15 million to support research, development, and commercialization of innovative technologies related to critical minerals.
    • Encourages private-public collaboration and job creation.
  • Improving Sustainability Through Ontario’s Forestry Sector
    • Investment in Forest Biomass Program
    • Additional investments to extend the program and promote forest-sector job creation.
    • Supports the use of wood in traditional and innovative products.

 

Powering Ontario’s Growth

  • Support for Nuclear Energy and Hydrogen Integration
    • Investment in nuclear refurbishments and hydrogen integration projects.
    • Aims to secure clean, reliable, and affordable electricity for future generations.
  • Increase in Funding for Northern Energy Advantage Program
    • Additional funding of $86 million over three years to support eligible operations in Northern Ontario.
  • Focus on sustaining economic growth and supporting key industries.
  • Strengthening Research and Development With Advanced Research Computing
  • Investment in ARC Systems:
    • Additional funding of $18 million over three years to support ongoing operation and maintenance of ARC systems.
    • Ensures systems meet computational demands for research into technologies like artificial intelligence.
  • Expanding Regional Innovation Centres to Barrie
  • Investment in RICs:
    • Additional investment of $1 million per year to launch a new RIC in Barrie.
    • Aims to promote entrepreneurship and innovation for regional economic growth.

 

Keeping Costs Down for Ontario Businesses

  • Measures to Support Businesses:
    • Various actions, including tax cuts, grants, and exemptions, to enable an estimated $8.0 billion in cost savings and support for Ontario businesses.
    • Focus on helping small businesses thrive and compete.
  • Helping Small Businesses Grow and Thrive
    • Enhancement of Entrepreneurship Programs:
    • Investment of $6.8 million over two years to enhance programs like the Starter Company Plus.
    • Provides training, mentoring, and business advice to eligible entrepreneurs.

 

Building Infrastructure, Highways and Transit in Your Communities

  • Investment in Infrastructure:
    • Significant investment of over $190.2 billion over the next 10 years in highways, transit, broadband, and housing projects.
    • Aims to improve connectivity and support economic development.
    • Introducing the New Municipal Housing Infrastructure Program
  • Investment in Housing Infrastructure:
    • Allocation of $1 billion to support core infrastructure projects enabling housing development in growing communities.
    • Focus on improving access to essential services and promoting housing affordability.
  • Expanding High-Speed Internet Access
  • Investment in Broadband Infrastructure:
    • Investment of nearly $4 billion to provide high-speed internet access to all communities in Ontario by the end of 2025.
    • Aims to bridge the digital divide and support economic growth.
  • Modernizing Ontario’s Public Infrastructure
  • Investment in Infrastructure Repairs:
    • Investment of $250 million over three years to repair key public infrastructure such as courts, detention centres, and laboratories.
    • Focus on improving safety and service delivery.
  • Expanding and Improving Roads, Highways and Bridges Across Ontario
  • Investment in Transportation Infrastructure:
    • Investment of $27.4 billion over the next 10 years to expand and rehabilitate provincial highways and bridges.
    • Focus on improving connectivity and reducing congestion.
    • Launching the Ontario Transit Investment Fund
  • Support for Transportation Projects:
  • Establishment of a fund to deliver local and intercommunity transportation projects in unserved and underserved areas, with an annual funding of $5 million.
    • Aims to enhance accessibility and connectivity, particularly in rural regions.

Section B: Working for You Better Services for you Making Health Care More Connected and Convenient

Supporting Home and Community Care

  • In the 2023 Budget, the government accelerated the commitment of $1 billion over three years to stabilize the home and community care workforce and to support the expansion of home care services. In this Budget, the government is investing an additional $2 billion over three years to boost this acceleration, support earlier investments to increase compensation for personal support workers, nurses and other frontline care providers, and to stabilize expanded services.

 

Investing in Hospitals

  • Ontario recognizes the indispensable role hospitals play in delivering critical health services to communities across the province. This is why the government is investing an additional $965 million in 2024–25, including a four per cent increase in total base hospital funding for an unprecedented second year in a row, to ensure public hospitals are able to meet patients’ needs and to increase access to high-quality care.

 

Connecting More People to Primary Care

  • On February 1, 2024, Ontario announced an investment of $110 million in 2024–25. Building on this, the government will provide a total investment of $546 million over three years, starting in 2024–25. This funding will support connecting approximately 600,000 people to team‐based primary care through new and expanded interprofessional care teams.
  • Strengthening the Health Care Workforce Ontario is investing $743 million over three years to continue to address immediate health care staffing needs, as well as to grow the workforce for years to come. This includes:
    • Making the Extern Program Permanent: This program will offer up to 5,590 health care students training opportunities to work in hospitals and gain practical experience as they continue their education. Since 2021, over 7,300 health care students have participated in the program — creating much needed capacity in the system and a pool of new graduates who are more experienced and prepared to work as they begin their health care careers.
    • Making the Supervised Practice Experience Partnership Program Permanent: This program will support up to 1,500 internationally educated nurses annually to become accredited nurses in Ontario. More than 3,600 nurses have participated in this program since its inception and over 2,700 internationally trained nurses are already fully registered and practising in Ontario.
  • Increasing Nursing Enrolment: Ontario continues to expand nursing enrolment in colleges and universities to help address the need for nurses now and in the years to come. This is why Ontario is investing an additional $128 million over the next three years to support the sustained enrolment increases of nursing spaces at publicly assisted colleges and universities by 2,000 registered nurse and 1,000 registered practical nurse seats. This expansion is part of the government’s plan to address health human resource needs and support the growing demand for health care professionals in Ontario

 

Increasing the Construction Funding Subsidy

  • The government is investing $155 million in 2024–25 to increase the construction funding subsidy, to support the cost of developing or redeveloping a long‐term care home.

 

Supporting Skills Development and Training:

  • The Skills Development Fund Training Stream receives an additional $100 million in 2024–25 to aid workers, including apprentices, in acquiring necessary skills, bringing total investment since 2021 to over $860 million.
  • An investment of $224 million expands access to physical training centers through the Skills Development Fund Capital Stream, facilitating the establishment of modern training facilities to prepare workers for emerging roles.

 

Investment in Skilled Trades:

  • Ontario allocates over $1 billion to the skilled trades via its Skilled Trades Strategy and commits an additional $16.5 million annually for three years to promote trades, simplify apprenticeship processes, and engage employers.
  • Funding of over $62.9 million supports the Ontario Youth Apprenticeship Program expansion and the launch of approximately 100 pre-apprenticeship training projects to expose young people to trade careers.

 

Better Jobs Ontario Program:

  • The Better Jobs Ontario program provides up to $28,000 for eligible job seekers to access short-term training programs, including youth, gig workers, newcomers, and those on social assistance, enhancing opportunities for stable employment.

 

Retirement Planning Support:

  • Engagement with the sector for a permanent target benefit framework aims to enhance plan funding and governance, ensuring the sustainability of workplace pension plans and encouraging wider adoption.

 

Energy Expenses:

  • The government extends gasoline and fuel tax rate cuts until December 31, 2024, maintaining the rate at nine cents per liter to provide continued relief to individuals and businesses.

 

Housing Supply:

  • Enhancements to the Non-Resident Speculation Tax (NRST) and the Ontario Harmonized Sales Tax (HST) New Residential Rental Property Rebate aim to address housing market speculation and encourage purpose-built rental housing construction.
  • The government empowers municipalities to offer reduced property tax rates on new multi-residential rental properties and explores innovative solutions like modular housing to improve housing affordability and supply.

Chapter 2: Economic Performance and Outlook

  • Ontario experienced strong employment growth in 2023 but faces projected economic slowdown in 2024 due to high interest rates, with real GDP growth expected to slow to 0.3 percent.
  • Key changes since the 2023 Budget include variations in real and nominal GDP growth, housing starts progress meeting targets, and a stronger job market.
  • The unemployment rate is projected to increase to 6.7% in 2024 but remains below the recent historical average.
  • Employment growth is forecasted to strengthen to 1.7% in 2025 and 1.4% in both 2026 and 2027, gradually reducing the unemployment rate to 6.2% by 2027.
  • Nominal household spending growth is estimated to moderate to 3.5% in 2024 but accelerate to 4.1% in 2025 as interest rates decrease and the labour market strengthens.
  • Consumer Price Index (CPI) inflation is projected to slow from 3.8% in 2023 to 2.6% in 2024 and return to the Bank of Canada’s inflation rate target of 2.0% in 2025, influenced by high-interest rates dampening demand.
  • Ontario aims to build at least 1.5 million homes by 2031 and achieved 99% of its 2023 target, with 109,011 new homes created.
  • Ontario’s housing market faces challenges from elevated interest rates and insufficient supply amid record population increases, leading to a decline in the average home price by 6.3% in 2023.
  • Despite declining average home prices, mortgage carrying costs remain high, contributing to housing-related CPI inflation.
  • Projected population growth and moderating mortgage interest rates are expected to boost housing market activity, with the average home resale price projected to decline 0.2% in 2024 before growing in subsequent years.

 

This section outlines Ontario’s commitments to skills development, retirement planning, cost management strategies, housing supply initiatives, and economic outlook, demonstrating the government’s focus on supporting workers and bolstering the province’s economy.

Chapter 3: Continuing to Invest in the Plan to Build: Ontario’s Fiscal Plan and Outlook

Economic Outlook and Fiscal Plan:

  • Ontario’s economy experiencing slower growth in 2024 compared to previous projections, necessitating continued investment in growth and infrastructure while keeping taxes low.
  • Projected deficits for 2023–24 at $3.0 billion, $9.8 billion in 2024–25, and $4.6 billion in 2025–26, before reaching a surplus of $0.5 billion in 2026–27.
  • Strong federal-provincial partnership crucial for fiscal sustainability, with emphasis on health funding agreements and infrastructure investments.

 

Interim Fiscal Performance 2023–24:

  • Projected deficit of $3.0 billion, slightly higher than earlier forecasts but lower than the third-quarter finances projection.
  • Revenue projected at $204.3 billion, with declines in taxation revenue offset by gains in non-tax revenue and net income from Government Business Enterprises (GBEs).
  • Program expenses projected to be $194.5 billion, $3.8 billion higher than the 2023 Budget forecast.

 

Revenue Update:

  • Total revenue outlook at $204.3 billion, slightly lower than forecasted, with increases in taxation revenue and non-tax revenue but declines in Government of Canada Transfers.
  • Notable increases in Corporations Tax revenue, offset by decreases in Personal Income Tax revenue.

 

Expense Update:

  • Total expense outlook at $207.3 billion, $2.6 billion higher than the 2023 Budget, primarily due to targeted investments in growth and infrastructure.
  • Increases in health and education sector expenses due to compensation costs and higher spending.

 

Medium-Term Fiscal Plan:

  • Deficits projected for the medium term, with significant investments in infrastructure and public services.
  • Total expense outlook expected to increase to $220.6 billion by 2025–26, reflecting commitments to strengthen communities.

 

Medium-Term Revenue Outlook:

  • Total revenue projected to increase to $226.6 billion by 2026–27, driven by growth in Personal Income Tax, Sales Tax, and Corporations Tax revenues.
  • Government of Canada Transfers expected to increase, along with net income from GBEs.

 

Medium-Term Expense Outlook:

  • Commitment to investments in health care, education, infrastructure, and economic development, with total expense projected to reach $224.1 billion by 2026–27.
  • Notable increases in health sector expense to address growing demands, and education sector expense to support student achievement and child care initiatives.

 

Building on the Federal–Provincial Partnership:

  • Collaborative efforts between Ontario and the federal government in various sectors, including electric vehicle supply chain and rental housing.
  • Opportunities for further collaboration in housing-enabling infrastructure, city support, and electric vehicle supply chain.

 

Prudence Built into the Medium-Term Outlook:

  • Fiscal planning based on prudent economic projections, with reserves and contingencies to mitigate risks.
  • Transparent fiscal management, monitoring financial pressures, and proactive risk identification.

 

Risks to the Expense Outlook:

  • Potential risks from economic conditions and program demands, with provisions made for likely losses.
  • Contingent liabilities acknowledged, with provisions for known risks reported in financial statements.

Chapter 4: Borrowing and Debt Management

Borrowing Program:

  • Majority of borrowing program funds deficits, refinances maturing debt, and invests in capital assets.
  • Long-term borrowing completed in Canadian and foreign markets.
  • Ontario plans to increase short-term borrowing in response to market demand.

 

Sustainable Bond Program:

  • Green Bonds utilized for public transit, infrastructure, and energy projects.
  • Introduction of the Ontario Sustainable Bond Framework for broader bond offerings.
  • Recent issuance of Green Bonds for various projects including EV infrastructure.

 

Cost of Debt:

  • Interest rates have risen but Ontario’s borrowing costs remain historically low due to long-term rate locking.
  • Borrowing costs for 2023–24 estimated to be lower than forecasted, resulting in significant savings.

 

Term of Debt:

  • Extension of debt term reduces refinancing risk and protects against interest rate increases.
  • Ontario issued significant long-term bonds, creating flexibility in debt management.

 

Liquidity Management:

  • Maintaining optimal cash reserves to meet financial obligations and respond to market events.
  • Cash reserves increased in 2023–24 to address operating requirements and infrastructure investments.

 

Debt Burden Reduction Strategy:

  • Targets set to reduce debt burden, including net debt-to-GDP, net debt-to-revenue, and IOD-to-revenue ratios.
  • Ontario’s ratios forecasted to meet targets over the medium-term outlook.
  • Continued progress towards reducing debt burden despite economic challenges.

Conclusion

The Ford Government has had to alter its course and will run a larger deficit than previously projected, but still plans to table a balanced budget in 2026 in ahead of the next provincial election.

The government continues to acknowledge that there are fiscal realities beyond the provincial government’s control such as high interest rates which are increasing government spending. This will prove to be a key theme as the government looks to find savings to return to balance while continuing to make significant new investments in health care, infrastructure, and housing which will continue to be priorities for Premier Ford as he begins planning for the next election cycle.

If you have any questions, please contact Wes McLean.

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