Ontario with inherited deficit of $14.5B releases the Government’s Fiscal Plan
Nov. 27, 2018
Global Korean Post
After Minister of Finance Vic Fedeli released the 2018 Ontario Economic Outlook and Fiscal Review, outlining the government’s plan on Nov. 15, Premier Doug Ford on Nov. 20 joined by Vic Fedeli, Minister of Finance; Attorney General Caroline Mulroney; Peter Bethlenfalvy, President of the Treasury Board; Rod Phillips, Minister of the Environment, Conservation and Parks; and Steve Clark, Minister of Municipal Affairs and Housing, called on the federal government to put jobs first in its upcoming economic update.
Ontario is now projecting a 2018-19 deficit of $14.5 billion — that’s already $0.5 billion less than the $15 billion deficit inherited from the previous government as reported by the Independent Financial Commission of Inquiry just 11 weeks ago.
According to the government, the Province has saved $3.2 billion, or about two per cent, in program expenses by reducing spending — while not reducing front-line services. It has done so while giving individuals, families and businesses important tax relief, by not proceeding with the previous government’s $308 million in planned tax increases, and cancelling the cap-and-trade carbon tax in order to strengthen Ontario’s economy. These measures would keep almost $2.7 billion in the pockets of people and businesses.
The Low-Income Individuals and Families Tax Credit, or LIFT, means that most people earning under $30,000 would not pay Ontario personal income tax, with graduated savings for those making just over that amount. It would provide low-income and minimum wage workers up to $850 in Ontario Personal Income Tax relief and couples up to $1,700.
The government is proposing to repeal much of the job-killing Fair Workplaces, Better Jobs Act, 2017 (Bill 148) and to keep the minimum wage at $14 per hour. This would reduce employer costs by $1.4 billion in 2019.
Ontario is also taking steps to cut red tape by 25 per cent by 2022. In addition, the Province proposes to reverse the previous government’s announced changes to Ontario’s small business deduction that would have raised taxes by up to $40,000 per year for about 7,900 companies, and increase the amount of payroll that is exempt from the Employer Health Tax for eligible Ontario employers.
The Province inherited $347 billion in public debt from the previous government. That’s over $24,000 for every man, woman and child — and the debt continues to grow every minute of every day. Interest on debt is the Province’s fourth largest expense item after health care, education and social services. It is costing the province more than $1.4 million an hour, or every person in the province almost $900 a year.
“Ontario families and businesses cannot afford a carbon tax. The federal carbon tax will increase gasoline, diesel, natural gas, propane and heating oil bills for people in the province. Ontario’s Government for the People intends to protect Ontario families and businesses from being punished by a discriminatory federal carbon tax.” Said Vic Fedeli, Minister of Finance.
“Prime Minister, on behalf of the people of Ontario, I am calling on you to do your part to make Ontario, and all of Canada, more open for business,” said Ford. The Premier called on Prime Minister Justin Trudeau to roll back federal tax increases on small business, answer Minister Fedeli’s request to allow businesses to fully expense capital assets in order to stay competitive with companies in the United States, and to not impose a carbon tax.
“We promised to make life more affordable for families and consumers,” said Ford. “That’s why we’ve introduced one of the most generous tax credits for low-income workers in a generation.”