Ontario Budget 2018

Ontario Liberals bet big on seniors' care, drug and dental coverage in 2018 pre-election budget

Ontario’s Liberals will plunge back into the red for at least the next six years to fund an array of big-ticket commitments outlined in the government’s pre-election budget on Wednesday.

Pledges $20.3 billion in new spending over 3 years, and deficits too

Ontario Premier Kathleen Wynne's government is projecting deficits until 2025 after finally balancing the budget last year. (Justin Tang/Canadian Press)

Ontario's Liberals will plunge back into the red for at least the next six years to fund an array of big-ticket commitments outlined in the government's pre-election budget on Wednesday.

The Liberals already unveiled a number of priority items in a series of commitments in the run-up to budget day, including major investments in healthcare, pharmacare and $2.2 billion over three years for free licensed daycare for preschool-aged children.

The primary themes of the 308-page, $158.5-billion budget were also telegraphed in a throne speech last week that included the word "care," or some variation of it, upward of 50 times. Similarly, it was clear that the budget would include substantial spending after Finance Minister Charles Sousa conceded a return to deficit to pay for it all, after running a $600 million surplus this year. 

However, nearly all of that spending won't go into effect until 2019 or later. 

"We balanced the budget and we have a surplus. Now we have a choice," Sousa said to reporters.

"People are saying, 'We still need more support.' So we made a choice to provide more supports."

Despite Premier Kathleen Wynne's recent flurry of announcements, there were a number of surprises revealed on Wednesday, many of them geared toward the elderly and affordability.

The budget includes billions in funding for seniors, including a $750 yearly benefit for those 75 and over who still live at home. The Healthy Home Program will cost $1 billion over three years. Another $650 million will go toward boosting the number of visits by caregivers to clients' homes.

For seniors in long-term care facilities, the Liberals plan to spend $300 million over three years to hire a registered nurse in every site in Ontario and provide an average of four hours of personal daily care for each resident by 2022.

The Liberals also plan to introduce a program to help cover costs of pharmaceutical drugs and dental care for Ontarians without workplace benefits, regardless of income or pre-existing OHIP+ coverage.

Wynne and Finance Minister Charles Sousa applaud as the Liberals deliver their 2018 budget at the Ontario Legislature. (Chris Young/Canadian Press)

The Ontario Drug and Dental Program will reimburse 80 per cent of eligible drugs and dental expenses, up to a maximum of $400 for a single person, $600 per couple or up to $700 for a family of four with two children, or $50 per child.

Wynne already committed to expanding the existing OHIP+ program to cover prescription drug costs for seniors 65 and over, a promise with a $575 million price tag.

Changes to social assistance

The Liberal budget also allots new funding for the province's vulnerable, including the largest increase in social assistance payments in more than a decade. Those who depend on Ontario Works or the Ontario Disability Support Program will see a three per cent increase in rates in each of the next three years, with the first increase set for the fall.

Meanwhile, the threshold for income that can be earned per month without affecting welfare payments will increase from $200 to $400 per month.

Some 47,000 eligible Ontarians living with developmental disabilities will receive $5,000 annually to access necessary services and supports.

Furthermore, 350 community agencies will get a $203 million injection of new money to ensure their capacity to provide care. The promises amount to $1.8 billion in new spending.

Out of the black, into the red

In all, the 2018 budget outlines $20.3 billion in new spending over three years that will put the province back into deficit after finally balancing the books last year.

Sousa, who has frequently remarked that the Liberals have "slayed the deficit," confirmed that Ontario would not return to black ink until 2025 should the budget be implemented after the June 7 election.

Ontario PC Leader Doug Ford said he was surprised Wynne isn't promising every voter a new car in the 2018 budget. (Chris Young/Canadian Press)

Sousa said the Liberals used a cautious GDP growth projection of two per cent annually and built-in contingencies to "temper" any unforeseen economic shocks and counter U.S. protectionism. He added that a "tremendous amount of prudence" has gone into the plan to eventually return to a balanced budget.

Despite the substantial spending that forms the backbone of the budget, 83 per cent of Ontarians will see no increase in personal income tax. Some 1.8 million people making $71,500 or more will pay more income tax, on average, according to Sousa, while about 680,000 people will pay less.

'Taxed to death'

The budget drew criticism from the opposition parties. 

"God help us. We've seen this show before many times," Ontario Progressive Conservative Leader Doug Ford told reporters, adding that residents in the province "are being taxed to death" and soon the Liberals will be giving away free cars to voters.

He's promised to slash four per cent of spending from the province's budget should his party form government. 

"The Liberals think they can buy your vote, and your vote is for sale. They proved it in this budget," he continued.

"People know that if it sounds too good to be true, it probably is."

NDP Leader Andrea Horwath called the budget "meager" and that it "would not undo the damage done by the Liberals.

"The Liberals have had 15 years and instead of helping, they've only made things worse," she said, describing the budget as Wynne's "desperate" last-minute pitch to voters before the election.

Horwath said a fully costed NDP plan will better address hospital wait times, healthcare costs, housing affordability and income inequality without raising taxes on low and middle-income earners.

When pressed by reporters, Sousa said the decision to run deficits was not influenced by the looming June 7 election.

"This is not election-cycle decisions that we're making, these are long-term in scope and they're building upon decisions we have been making all along," he said.

"The responsibility we as government have is to what happens going forward ... This is about protecting people and ensuring that people are better off."

Bonuses for business

Apart from new spending on healthcare and social services, there are several initiatives aimed at youth, namely $411 million that will be used to fund a new apprenticeship program for high school students and to increase the number of Ontario students graduating from university with a degree in science, technology, engineering and mathematics by 25 per cent.

For businesses, the budget promises $900 million over 10 years to expand the Jobs and Prosperity Fund (JPF). According to the budget document, the investment will help create and sustain 70,000 new jobs and "leverage" $9 billion in private investments.

"The JPF will also provide Ontario with the flexibility to take further action to support businesses and workers and sectors of the economy that may be impacted by an uncertain and rapidly changing global environment," the budget reads.

Big money for high-speed rail

The Liberal budget also includes a notable increase in money for public transit infrastructure, allotting $79 billion to various projects — up from $55 billion in the 2017 budget.

Some $11 billion of that will go toward to constructing a high-speed rail network connecting Toronto to Windsor. The government has been musing about the project for years, however this is the first time a specific figure has been revealed.

Ontario NDP Leader Andrea Horwath said the budget doesn't go far enough to address income inequality and gaps in social services. (Chris Young/Canadian Press)

The money will go toward building the first phase of the network from Toronto to London, however few details were available about how much of phase one can actually be completed with that sum.

Much of the remainder of the additional transit spending will be used to integrate municipal services to create functioning regional networks.

Long list of promises

The Liberals announced what is arguably the budget's biggest-ticket item earlier this week: free daycare for preschool-aged children starting in 2020. The $2.2 billion investment would also boost funding across the licensed daycare system, increase child care services on reserves and raise wages for daycare employees.

The budget provided more insight into the proposal, including that an additional $534 million will be spent to create 10,000 additional child care spaces in schools and 4,000 spaces in community centres.

Other commitments unveiled before Wednesday's budget include:

  • $822 million to improve care and infrastructure in Ontario's hospitals, the largest annual increase in more than a decade.
  • $2.1 billion over four years for improved mental health services.
  • $300 million to improve special needs education in Ontario.