Ontario sitting on $6.4B in unspent COVID aid: analysis
Province should open purse to help families, economy weather second wave, think tank urges
Ontario is sitting on $6.4 billion in unspent emergency COVID-19 funding as the pandemic rages, according to a new economic analysis, which shows that Ottawa is paying for the bulk of the relief effort.
Ontario is one of six provinces that have left billions on the table, moneys earmarked and urgently needed for health care, long-term care, housing and essential workers, states the study, released Tuesday by the Canadian Centre for Policy Alternatives.
The other provinces are Alberta, Newfoundland, Prince Edward Island, Quebec and Saskatchewan.
They should step up and do more to address the crisis, author David Macdonald, a senior economist with the think tank, said in an interview.
“While the implications of the pandemic are very real in hospitalizations and deaths, (Ontario) is hedging its bet with its unallocated funds. If things get worse they may deploy those funds, but if things get better they’ll get to claim a smaller deficit at year’s end,” he charged.
“It’s time for the province to go all in and actually deploy the dollars it has budgeted to protect (long-term-care) homes, get kids back in schools and wrestle this second wave into submission,” he added.
Described as a “who-is-doing-what” exercise, the study tracks what level of government is picking up the tab for every COVID-19 program that was announced by the end of 2020. It disentangles hundreds of billions of dollars in federal transfers to the provinces
from COVID-related measures made possible by exclusively provincial funds.
It also analyzes how provinces are spending federal transfers.
“The heavy lifting so far was overwhelmingly federal, either through direct spending or new transfers to the provinces,” states the study, titled “Picking up the tab: A complete accounting of federal and provincial COVID-19 measures in 2020.”
Overall, it found that federal and provincial governments have earmarked $374 billion in direct COVID-19 emergency spending (excluding liquidity measures such as loans and unallocated funds). Of that, $343 billion or 92 per cent comes from Ottawa, and $31 billion or eight per cent comes from the provinces.
The analysis found that Ontario has budgeted $6.4 billion for COVID spending with no imminent plans for what to do with it. These moneys have been budgeted through the province’s Pandemic Fund, Support for People and Jobs Fund, an economic recovery fund and a health contingency fund. “While unallocated contingency funds aren’t unique, no province has such large ones (as Ontario),” the report reads.
The equivalent of approximately $9,800 a person is being spent in Ontario on COVID-19 measures, the study states. Of those dollars, 94 per cent comes from Ottawa and six per cent from the provincial government.
Spending on business supports in Ontario is roughly equal to spending on individuals at just over $4,000 a person. Most of this funding is flowing through the Canadian Emergency Wage Subsidy and Canada Emergency Business Account programs.
Provinces ponied up only four per cent of overall financial support for individuals and six per cent for businesses.
Government spending on the pandemic has “largely been a federal show,” Macdonald argued.
“Post-pandemic, all levels of government must work together to rebuild better — to be prepared for future crises, to take the inequities that COVID-19 has exposed, and to improve public services,” he said.
In an emailed response to questions from the Star Monday evening, Sebastian Skamski, spokesperson for Ontario’s president of the Treasury Board, said “any suggestion that the government is not spending funds to keep Ontarians healthy and safe is categorically false.”
“Our government is spending $45 billion to respond to the serious health and economic impacts of COVID -19, including $15.2 billion to protect and support our health-care system,” he said.
“Dedicated COVID-19 contingency funds are overwhelmingly committed,” he added, with the remainder expected to be spent by the end of the fiscal year on March 31.
The Canadian Centre for Policy Alternatives report notes that federal leadership will be required for years to come and must be met with provincial partners willing to come to the
table, cost-match, adhere to federal transfer conditions and fully utilize the fiscal capacity with their jurisdictions.
Among the report’s additional findings:
> Alberta is getting $1,200 more federal support per person than any other province, yet is also leaving money on the table.
> British Columbia has been the most generous province, devoting almost three per cent of GDP to pandemic measures.
> Six provinces did not access the full federal amount available for the low-wage essential worker top-ups: B.C., Alberta, Saskatchewan, Manitoba, Nova
Scotia and New Brunswick. Of the $348 million available to Alberta, the province has accessed only $12 million.
> Six provinces do not have sufficient plans to access the full amount being made available in federal funding for long-term care: Alberta, Saskatchewan, Manitoba, Newfoundland, P.E.I. and New Brunswick.
> Half of the provinces (P.E.I., Nova Scotia, New Brunswick, Manitoba and Saskatchewan) have not met the 50-50 costsharing stipulation attached to municipal supports through the Safe Restart funding agreement with Ottawa.