FREE TUITION FOR LOW- INCOME FAMILIES.
Aims to drive down deficit to $5.7 billion
TORONTO• In her government’s nearly$134-billion 2016 budget, Ontario Premier Kathleen Wynne continues her tightrope walk between her aspirations of social justice and the province’s hard fiscal realities.
Thursday’s budget details a plan to eliminate Ontario’s stubborn deficit by the next fiscal year while also announcing free tuition for thousands of post-secondary students, investments in social programs and public transit.
Amid the restraint, Finance Minister Charles Sousa’s plan allows his leader to further her pursuit of becoming the province’s social justice premier.
A plan to overhaul tuition grants seeks to essentially eliminate tuition fees for post- secondary students from families that earn less than $50,000 a year and half of those from families with household incomes below $ 83,000 a year. Students from higher- income households will enjoy a simplified system and tuition costs that are either slightly lower or the same as before.
The province will also work to provide low- and nocost student loans and cap the amount of annual Ontario Student Assistance Program (OSAP) debt at $10,000.
There’s also a smattering of consumer goodies — including an end to the $ 30 Drive Clean fee for vehicles, and the long-promised wine sales in grocery stores. And costs will increase for some families to help pay for new programs and erase the deficit.
The provincial deficit is projected to fall to $5.7 billion by the end of the current fiscal year, which ends March 31. The budget projects another $ 4.3- billion deficit. While that deficit is a long way from the double-digit red ink that plagued Ontario in the wake of the 2008- 09 recession, it’s still billions from being balanced.
With only two fiscal years to return to black as promised by the end of March 2018, Wynne and Sousa are walking without a safety net.
“We are doing a little better than the rest of Canada. We recognize the challenges that the global economy still has, there is uncertainty,” Sousa said of his deficit plans. “We have dealt with that di- lemma, that issue, those challenges … since the last great recession.
“We have some prudence in the system to (compensate for) any variations in our economic growth.”
The province plans to find savings from a slew of costcutting measures: the Ontario Home Renovation Tax Credit is gone, and the Children’s Activity Tax Credit was axed for being preferential to the rich.
That will save between $ 15 million and $ 55 million respectively per year. They’re just two small planks in a plan to squeeze between $1.3 billion and $2.5 billion from the budget.
More online access for drivers’ licenses and health cards is expected to save some cash, as is a plan to overhaul government information technology.
“I’m very skeptical when it comes to modernization plans,” said NDP leader Andrea Horwath. “What we often see that means cut to services and staffing.”
These modest measures coupled with increased tax revenues from i mproved growth and measures to combat the underground economy are supposed to finally bring the province back into balance, the government states.
That cost- cutting is set against a backdrop of investment: plans to spend billions on infrastructure have soared from the $130 billion over 10 years announced in 2014 to $160 billion over 12 years.
The Regional Express Rail plan to improve GO transit service gets a $ 13.5- billion boost with a promise of allday two- way service on the Kitchener and Lakeshore lines. Saturday service to Kitchener is expected to start in the 2016 fiscal year.
Tobacco taxes will go up $3 a carton and be indexed to inflation — a measure that’s expected to raise $100 million in revenue in 2016 and $ 95 million the year after.
Minor changes to the price of wine — the minimum price will be raised to $ 7.95 this year and continue to go up — will raise $15 million in 2016 and $45 million the year after.
The Ontario Retirement Pension Plan will steamroll ahead even as the province pledges to works with the feds to expand the Canada Pension Plan.
A proposed cap-and-trade program will add 4.3 cents a litre to the price of gas and increase home-heating costs and cap emissions for Ontario companies, who can trade any excess of that allotment on a new carbon market with California and Quebec.
And the budget pledges a basic income pilot program — meaning a city will test the effects of replacing all welfare programs with a set minimum income for all residents.