A budget showdown is looming in Ontario with Premier Kathleen Wynne telling New Democrat Leader Andrea Horwath this afternoon that she has a week to decide if she will support the minority government or let it fall.
The $130.4-billion budget was tabled on Thursday afternoon, though it contained few surprises since much of its contents had trickled out in various leaks in recent weeks.
As a result, Wynne said Thursday that the NDP leader should know enough about the budget to make her decision within seven days.
"I recognize that you and your colleagues may want to spend some time reviewing the budget," Wynne said in a letter sent to Horwath, which was also sent out to media.
"But, given that much of the budget’s content has been discussed for several months and that the budget bill is in front of the House, I believe one week is a sufficient amount of time for you to complete your review."
The premier said she would like to meet with Horwath by next Thursday to discuss whether she’ll support the budget. And if she will, Wynne wants to map out a plan to get it passed.
Horwath did not attend the budget lockup on Thursday, a move that Finance Minister Charles Sousa said left him "perplexed," given the budget’s importance to Ontarians.
Without the New Democrats’ support, the budget won't be able to pass, as the Progressive Conservatives have already said they won’t support it.
As Progressive Conservative Leader Tim Hudak told reporters at the lockup that Horwath skipped, in his eyes, she had chosen to "duck and run."
Few surprises in budget
Amid lower-than-expected revenues, a hefty deficit and modest economic growth, the Liberals are pushing plans to invest tens of billions in transit and infrastructure over the next 10 years and to create a new provincially based pension plan. Along with those big-ticket items, the government wants to increase the minimum wage and to increase income taxes for Ontarians making $150,000 a year or more, while boosting both the Ontario Child Benefit and social assistance payments
The Liberals are presenting the budget as part of a long-term plan to put Ontario in a position to thrive in the future. To that end, Sousa said there is need to drive growth, to ensure that Ontario has the modern infrastructure it needs and that the conditions are in place for business to succeed.
"It will take vision, because it is not going to happen overnight," Sousa said in his budget speech in the legislature on Thursday afternoon.
Hudak told reporters that the budget was merely "a series of promises," without a plan to create jobs and that included the proposed pension plan.
"Before you can have retirement security, you need job security," he said.
Horwath issued a statement to say she would be responding to the budget on Friday morning.
Deficit to grow
Under the budget the Liberals are proposing for 2014-15, the government would spend some $12.5 billion more than it brings in. That’s up from $11.3 billion in the 2013-14 fiscal year, and above the $10.1 billion they had projected.
Economist Donald Rumball told CBC News that it appeared the Liberals had "abandoned the hard-nosed austerity program that [former premier] Dalton McGuinty tried to introduce," which he believed was clearly for electoral reasons.
Yet Sousa insisted to reporters that the province still intends to balance its budget by 2017-18, a goal that Hudak recently suggested the Liberals had simply "given up" on.
The revenue for the last fiscal year was estimated to be just under $115.7 billion, coming in more than $1-billion below what was projected last year — an outcome that was attributed to lower tax revenues. The government also reported spending $636 million less than it had anticipated, which was in part because of lower-than-expected debt costs.
Improving the province's transit and infrastructure is an emerging political issue and one that the Liberals have made a priority in the budget. The government intends to spend $130 billion over a 10-year period, an investment it believes will support 110,000 jobs annually.
In terms of public transit and transit infrastructure, the government plans to spend $29 billion over the coming decade, which will be roughly split between projects in the Greater Toronto and Hamilton Area ($15 billion) and the rest of the province ($13.9 billion).
Some of the money for these transit projects will come from a portion of redirected gas-tax revenues, as well as from the HST revenues associated with gas and diesel fuels. The government would also look to "targeted revenue measures" that would include increasing taxes on aviation fuel and restricting big businesses from claiming a small business deduction. Further funds would be raised through borrowing and by seeking help from Ottawa.
The province will also spend $11.4 billion on 40 hospital expansion or redevelopment projects in the decade ahead, along with hundreds of millions on deferred hospital maintenance
More than $11 billion in capital grants for schools will be provided in the next 10 years. Some of these funds will help build new schools in rapidly growing parts of the GTHA and Ottawa.
The government says it is willing to provide $1 billion towards infrastructure development in the Ring of Fire mineral deposit in northern Ontario — provided that Ottawa makes a matching investment.
The Liberals have also laid out some of the details for their plans to establish an Ontario Retirement Pension Plan. The government says that some two-thirds of Ontarians are not part of workplace pension plans, which means they are having to rely on their own savings, the Canada Pension Plan and Old Age Security support in their retirement years. But many people are unable to save the money they need to uphold their standard of living in retirement.
Given that Ottawa has not sought to expand the CPP at this point, Ontario is going to go it alone. As Sousa put it to reporters Thursday, there has been "no leadership" from the federal government on the pension issue.
The budget indicates that the proposed pension plan would collect equal contributions from workers and their employers. The government says that it is seeking to create a plan that could be wrapped into the CPP in future, should things change at the federal level.