Finance Minister Rod Phillips has released Ontario’s Action Plan: Protect, Support, Recover — the next phase of a comprehensive action plan to respond to the serious health and economic impacts of COVID-19.
Ontario’s Action Plan now sets out a total of $45 billion in support over three years to make available the necessary health resources to continue protecting people, deliver critical programs and tax measures to support individuals, families and job creators impacted by the virus, and lay the groundwork for a robust long-term economic recovery for the province.
In total, Ontario’s COVID-19 health response is now a projected $15.2 billion. The government is making available $4 billion in 2021-22 and a further $2 billion in 2022-23 to ensure the province can remain responsive to evolving needs in the fight against the pandemic. The 2020-21 spending includes $2.8 billion to support the province’s Fall Preparedness Plan for Health, Long-Term Care and Education — the most comprehensive and robust plan in the country to respond to the second wave of COVID-19. It also includes additional funding to support hospital beds, address the surgical backlog and purchase additional influenza vaccines.
The government is also investing an additional $572 million in Ontario’s hospitals to support additional costs of COVID-19, including testing, assessment centres, laboratory and medical equipment, and PPE. This brings the total funding to hospitals above and beyond what was provided last year to over $2.5 billion. The province is investing more than $18 billion in capital grants over 10 years to build new and expanded hospital infrastructure and address urgent upgrades, including repairs and maintenance to help modernize hospitals across Ontario.
To protect loved ones in long-term care from a second wave of COVID-19, and to address long-standing issues in the system, Ontario is providing over half a billion dollars to enable necessary renovations and measures to improve infection prevention and control, allow for the purchase of more personal protective equipment (PPE), and to build a strong health care workforce. While Ontario’s Long-Term Care COVID-19 Commission is completing its review, the government is acting immediately to protect Ontario’s most vulnerable people. The province plans to increase the average daily direct care of long-term care residents from a nurse or personal support worker (PSW), to four hours a day. This additional care will be phased in over the next four years and will make Ontario the leader among Canadian provinces. This ambitious plan will require significant changes in the long-term care sector, including recruiting and training tens of thousands of new staff.
“Since day one of the pandemic, protecting people has been our government’s number one priority,” Phillips said. “The health risks of COVID-19 remain extremely serious. We are making available every necessary resource to keep people safe, including our loved ones in long-term care and our frontline health care heroes during the second wave and beyond.”
The government is now delivering an estimated $13.5 billion in total support for people and job creators as part of Ontario’s Action Plan. This additional relief will ensure families, seniors, businesses and workers are supported through the second wave of COVID-19 and beyond.
To help offset some of the additional costs of COVID-19, parents will once again receive $200 per child under age 12 and $250 for children and youth with special needs age 21 and under.
The government is taking significant steps to protect seniors and allow them to stay in their homes longer. The province is proposing a new Seniors’ Home Safety Tax Credit for the 2021 taxation year, which would provide a 25 per cent credit on eligible renovations of up to $10,000. Seniors would be eligible regardless of their incomes and whether they owe income tax for 2021. Family members who have a senior living with them would also be eligible.
The Ontario government remains committed to supporting job creators through this unprecedented time. The government is making available $300 million in relief for eligible businesses in regions where the province determines modified Stage 2 public health restrictions are necessary, or going forward, in areas categorized as Control or Lockdown. This will help cover fixed costs such as property taxes and energy bills. The government is also providing an additional $1.8 billion in the Support for People and Jobs Fund over the next two years to remain responsive to emerging needs and continue providing supports for the people of Ontario.
“COVID-19 has caused a global recession and Ontario has not been immune,” Phillips said. “Every negative economic statistic represents a person who has lost their job, an anxious small business owner or a family struggling to make ends meet. Today we are providing new support to those who have been hardest hit, including parents, seniors and small business owners, while building on what has already been provided.”
While COVID-19 will impact Ontario and the entire world for the foreseeable future, the 2020 Budget begins to build the foundation for a strong economic recovery fuelled by growth. The government is planning to invest $4.8 billion in initiatives that will support jobs now, while removing barriers that would hold Ontario back from a strong recovery from COVID-19. Among the major initiatives proposed by the government are a reduction of job-killing electricity prices, reducing taxes on jobs, connecting unserved and underserved communities with a historic investment in broadband infrastructure, and providing workers with skills training — including those impacted by the pandemic, such as tourism and hospitality workers — to help them connect to jobs needing high-demand skills.
The government is also acting immediately to reduce taxes for job creators and level the playing field by lowering high provincial business property tax rates to a rate of 0.88 per cent for over 200,000 properties — or 94 per cent of all business properties in the province. This would create $450 million in annual savings in 2021, representing a 30 per cent reduction for many employers.
Ontario is going a step further to make available additional support for the employers most affected by COVID-19. The government has heard from some municipalities that they would like additional tools to provide more targeted tax relief to job creators in their community. Ontario is responding to requests from local governments by proposing to provide municipalities with the ability to cut property tax for small businesses and a provincial commitment to consider matching these reductions. This would provide small businesses as much as $385 million in total municipal and provincial property tax relief by 2022-23, depending on municipal adoption.
The province is also ending a tax on jobs for an additional 30,000 employers by proposing to make permanent the Employer Health Tax (EHT) exemption increase from $490,000 to $1 million. This would save private-sector employers $360 million in 2021-22 that could be reinvested in jobs and growth. About 90 per cent of employers would pay no EHT with this additional relief.
When employers are looking at Ontario as a place to do business, it’s clear the province’s high commercial and industrial electricity prices are a barrier to investment that causes some of them to go elsewhere. The 2020 Budget outlines a plan to reduce the burden on employers of Ontario’s high-cost contracts with non-hydro renewable energy producers, which will be wound down once and for all. Starting on January 1, 2021, a portion of the cost of these contracts, entered under the previous government, will be funded by the province, not the ratepayers. This electricity cost relief would free up money that could be better spent creating jobs. Medium-size and larger industrial and commercial employers would save about 14 and 16 per cent respectively, on average, on their bills starting in 2021. This means Ontario will go from having some of the least competitive electricity prices to prices that are more competitive than the average in the United States.
“All of us in Ontario are focused on getting through COVID-19,” Phillips said. “It may be difficult to think about the future while still dealing with a global pandemic, but if we all do our part, COVID-19 will eventually be behind us. Our government has a responsibility to remove barriers to the growth necessary for job creation. The cost if Ontario falls behind while the rest of the world recovers is simply too high. We can’t afford to wait.”
The 2020 Budget provides transparency amidst a world of uncertainty, by outlining a flexible medium-term fiscal plan based on the latest economic projections. It also presents alternative scenarios demonstrating how the province’s fiscal outlook could change depending on the pace of the economic recovery. The government is projecting a deficit of $38.5 billion for 2020-21, which is unchanged from the deficit forecast at the time of the 2020-21 First Quarter Finances and reflects urgent spending necessary for the fight against COVID-19. Over the medium term, the government is forecasting steadily declining deficits of $33.1 billion in 2021-22 and $28.2 billion in 2022-23. Acknowledging the continued uncertainty of the global pandemic, the government plans to table a multi-year plan including a path to balance in the 2021 Budget by March 31, 2021.
For the full budget, visit https://budget.ontario.ca/2020/contents.html