Sousa to balance Ontario’s books
Finance minister announces campaign-friendly measures ahead of budget on April 27
Finance Minister Charles Sousa will balance the province’s books for the first time in almost a decade with an April 27 budget.
Sousa revealed the date Thursday in a speech to the Empire Club at Arcadian Court where he promised the next two weeks would see “a series of important announcements to help you and your family” from a government flush with cash.
“Eliminating the deficit allows us to redouble our efforts to make lives a little more affordable. A balanced budget means there will be new investments, important investments,” he said, mindful Ontario voters will head to the polls for a June 7, 2018 provincial election.
One such campaign-friendly measure will be a new public-transit tax credit for seniors “to make it more affordable for them to go to the gym, the library or to take their grandkids to a concert.”
Details of that will be in the upcoming spending plan, but Sousa said everyone 65 and older would qualify regardless of income.
“In a sense, the 2017 budget represents the start of a new era. We’re no longer working to eliminate the deficit,” the treasurer said, noting the shortfalls that began in 2009 after the global financial crisis are ending thanks to a surging Ontario economy.
“Exports are up. We have seen gains in manufacturing, retail sales and financial services. Household incomes are up. Just this morning, we announced that real GDP increased by 2.7 per cent in 2016 — we beat private sector forecasts,” Sousa said.
“That’s twice the rate of growth for Canada. It’s better than Germany’s 1.9 per cent. It’s better than the U.S. at 1.6 per cent. It’s better than all the G7 countries,” he said.
“I want to be clear: this is not just a Toronto economic recovery story; across Ontario, we are seeing more growth and more jobs.”
But Sousa said he understands the boom is contributing to skyrocketing house prices in and around the Greater Toronto and Hamilton Area, so the government must act to keep homes affordable.
“On the one hand, strong housing is a reflection of Ontario’s strong economy; people are moving to Ontario. But this hot market is making it difficult for many to buy their first home,” he said.
“We all want families to be able to pursue their dreams of home ownership and to help those looking to rent a home.”
To that end, Sousa will meet Tuesday with federal Finance Minister Bill Morneau and Toronto Mayor John Tory “because all levels of government need to work together to find remedies.
“We know for many, a house is their biggest asset. We need to protect that investment, so we need to take a thoughtful approach to avoid unintended consequences,” he said.
“Having said that, I am concerned about speculators playing the market limiting supply — it’s why I asked Minister Morneau to close the loophole on capital gains exemptions,” Sousa said.
“There are those who go into new developments, buy up a slew of properties, and then flip them, while avoiding paying their fair share of taxes. I call them property ‘scalpers’ and . . . they’re crowding out families who are trying to put down roots.
“We also hear concerns about vacant properties that sit empty and limit supply. It’s unfair that deep pockets are driving up the cost of homes. (But) there is no silver bullet to solve this complex issue.”
Sousa promised the government would unveil its plan “in the coming days.”
Underscoring that Premier Kathleen Wynne’s Liberals, who trail Patrick Brown’s Progressive Conservatives in public-opinion polls, are tackling pocketbook issues, the treasurer reminded his audience that residential electricity bills are being slashed by 25 per cent this year.
“We heard loud and clear that hydro rates are too high. That’s because for decades, successive governments, of all stripes, failed to make investments in the grid. We supported investments of $50 billion to build new power and 15,000 kilometres of new transmission,” he said.
“But fixing all this ahead of the Rust Belt states and neighbouring provinces has come at a price. Although these are long-term capital assets, people are seeing more upfront costs on their bills today. So we’re financing these assets over a longer period and cutting household electricity bills by 25 per cent.”
He also promised “a booster shot for health care,” but was vague about what that meant.
Brown, for his part, warned Ontarians to be wary about just how much good news is on offer in two weeks’ time.
“They’ve ignored the affordability issue. Whether it was on hydro or it was on housing, they’ve been asleep at the switch on that front.”