Tax cuts for business, boost in the minimum wage, free prescriptions and more long-term care beds were among the highlights of Ontario Finance Minister Charles Sousa's financial update Tuesday, as the government prepares for an election in less than a year.
The tax cut for businesses was among the new announcements, something apparently designed to take the edge off the minimum wage hike, scheduled to rise to $14 on Jan. 1, 2018, and $15 a year after that.
"It's not a one for one,” Energy Minister and Sudbury MPP Glenn Thibeault said Tuesday about the tax cut.
“The minimum wage piece is something that we recognize as a government that needs to happen in this province. Precarious work, the below living wage for people, it obviously needs to change. Our economy is doing well. That's part of what the economic statement is talking about. But it's not being felt in all places.
"When you're looking at that small business rate cut from 4.5 per cent to 3.5 per cent, that's a 22 per cent reduction and would bring our tax rate to among the lowest in all the G7 countries."
The province is also providing $500 million for new initiatives over three years for small businesses to cut costs, as well as a three-year, $124 million program for employers who hire people between the ages 15. There's a $1,000 incentive for business, plus another $1,000 if the job lasts longer than six months.
The province also plans to add another 5,000 long-term care beds by 2020, part of its promise to add 30,000 more beds over the next decade. Thibeault wasn't sure how many of the beds would come to Sudbury.
“It was only recently announced ... but we all know we have an ageing population," he said.
Other highlights:
- Ontario is forecasting real GDP growth of 2.8 per cent in 2017.
- Government revenues are projected to rise to $158.2 billion in 2019–20, up from $140.7 billion in 2016–17, an average annual growth rate of four per cent.
- The net debt-to-GDP ratio is anticipated to decline to 37.3 per cent in 2017–18.
- The economy is expected to create more than 300,000 new jobs by 2020.
Locally, Thibeault said the money to finish four-laning Highway 69 was confirmed by Sousa.
"Highway 69 funding is again in there, reiterating that the funding is there for the completion of the next 68 kilometres,” he said. “I know the importance of that for our community. I was happy to see those dollars are continuing to be there."
For the full financial economic update, go here.
While Sousa said the government would balance its books this year, last month Auditor General Bonnie Lysyk called out the government for its accounting manoeuvres on its Fair Hydro Plan.
Lysyk said the plan created something called the OPG Trust, something she said will cost taxpayers an extra $4 billion, but will allow the province to claim its balancing the books.
Thibeault took issue with Lysyk's conclusions.
"This is an accounting dispute,” he said. “We have our accountants who reviewed the plan. These were third-party, world leading experts when it comes to accounting. And they say our accounting matches that of the Canadian Public Service Accounting standards.
"KPMG, (Ernst & Young), Deloitte all agree that the practice we put in place actually follows the accounting practices of the Canadian public sector accounting system."
And Thibeault said the estimate was based on an interest rate of five per cent, which is higher than what the market is showing.
"The number that she was using, the $4 billion, was a point in time back in March that the financial accountability officer used, saying this is what the interest will be on the new OPG Trust. We're saying that was a point in time. He used five per cent as an interest rate.
"OPG, went they put out an issue to a bond market about three weeks ago, they got 3.3 per cent. So it's going to be significantly lower than that."
While not agreeing on the OPG Trust issue, Thibeault said his government is still committed to working with here.
"Ninety-nine point nine per cent of the time, we agree with the auditor and implement a lot of the recommendations. But this is another accounting dispute we have with the auditor, just as we did in the past with the pension piece."
