Mixed bag for consumers in Ontario budget

Commuters are getting a long-term promise of better transit and roadways through increased infrastructure spending and some special interest groups will see their funding continue, but there were no major incentives in the Ontario budget for everyday citizens living in Canada’s largest province.

There is another way to look at it though: There were no personal tax increases (unless you count the new beer charge), which means the broader public was spared what could’ve been a more painful path to balance the books.

Economists say it wouldn’t have been prudent for the Ontario government to provide broader perks to people in the province, given its balancing act between reducing the deficit and trying to capitalize on economic growth.

“With a return to balance the priority, there was limited fiscal room for new initiatives in this budget,” said TD economists Leslie Preston and Jonathan Bendiner in a note after the budget was tabled on Thursday. TD described the budget as a “progress report” on the government’s ambitious plan to balance its books by 2017-18, without setting any new direction.

Major changes in the budget included setting aside $130 billion over 10 years for infrastructure spending, as well as confirmation of recently announced money-making moves such as allowing beer to be sold in grocery stores for the first time in history, and the sale of a majority stake in giant utility Hydro One.

There were cuts across some government sectors, minus a few such as health and education, but critics say those spending increases aren’t big enough to offset inflation and added pressure from population increases.

Overall though, not much will change for people in the province, experts say.

“There is no real splash here, but when you think of the long-term and what’s right for the bigger issues … I think it’s the right approach,” said Paul Woolford, tax partner in Toronto with KPMG Enterprise.

Still, the seemingly uneventful budget drew much criticism.

The Ontario Public Service Employees Union (OPSEU) said the budget was good for making money from public assets, but “an unmitigated disaster” for citizens as a result of planned cuts across the public sector.

The Ontario Medical Association (OMA) said the government “continues to drastically underfund health care,” and is putting the health care system “at risk.”

“There are 900,000 people in this province without a family doctor and the population continues to grow and age – this budget ignores both that growth and that unmet need and that’s unacceptable,” stated OMA president Dr. Ved Tandan.

Business groups were also dissatisfied. The Ontario Chamber of Commerce called it a “mixed-bag budget,” that delivers much-need transportation infrastructure spending, “but little is being done to address the growing burden on businesses and get the province’s fiscal house back in order.”

Certain industries applauded the budget for some smaller measures though, such as the discount on insurance premiums drivers will get if they use snow tires.

"It’s clear that the government recognized that the auto insurance product needed reforms to work better for consumers,” Insurance Bureau of Canada vice present Ralph Palumbo stated after the budget.

Music Canada was happy to see another extension of the Ontario Music Fund, which the government said receives $15-million per year.

Unifor, Canada’s largest union in the private sector, criticized the sale of Hydro One but was pleased the government is moving ahead with plans to introduce the Ontario Retirement Pension Plan (ORPP) by 2017.

“More than 60 per cent of Ontario workers do not have a workplace pension plan,” stated Katha Fortier, Unifor Ontario Regional Director. "To be most effective, the ORPP must mirror the CPP (Canada Pension Plan) as a universal, defined benefit plan that is indexed to inflation. Clearly, the Wynne government understands how dire the situation is.”

Paul Forestell, national retirement leader at consulting firm Mercer, is in favour of the “pay now and get paid back later approach” with the ORPP. However, he said it will be complicated for national employers to implement.