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Information Alert 
2016 Budget Roundup 

February 26, 2016
The provincial budget, Jobs for Today Jobs for Tomorrow, included $133 billion in spending commitments.

Adding to the OMSSA 2016 budget highlights document, the following provides highlights of the full budget.
 
The information is courtesy of Allison Smith's Queen's Park Today report.

Spring budget highlights
  • The province is projecting a deficit of $5.7 billion in 2015-16.That is forecasted to drop to $4.3 billion in 2016-17and reach balance by the following year.
  • In the 2017-18 school year, the province will launch the Ontario Student Grant, which will provide free college and university tuition for students from families with incomes of $50,000 or less.
  • The province expects to bring in $1.9 billion from cap-and-trade auctions in 2017.
  • Hospital funding is increasing by $345 million this year - the first increase in five years. The NDP calls it a "token increase."
  • " Sin taxes": Prices are going up on wine,cigarettes and gasoline - but household electricity bills will go down.
  • Th e government will face criticism for its revenue forecasts and post-secondary grant funding being too reliant on the federal Liberal Party's campaign promises.
  • Some new healthcare funding is here: Funding for home and community care will increase by $250 million over next two years; Investment in community-based hospices and palliative care will increase by $155 million over three years; The shingles vaccine will be made available for free to seniors age 65 to 70.
  • Ontario Works and Ontario Disability Support Program rates will increase by 1.5 per cent in 2016.
  • Ontario is ending the $30 fee consumers pay to take the Drive Clean test.
  • Ontario Drug Benefit contribution costs for most seniors are increasing.    
By the numbers

Economic forecasts
  • Ontario's 2015-16 budget deficit is $5.7 billion .  This is a $1.8 billion improvement compared to projections in the 2015 Fall Economic Statement. The 2016-17 deficit is forecasted to drop to $4.3 billion.
  • The ministry said the province is on track to eliminate the deficit by 2017-18 and retain a balanced budget in 2018-19.This will be achieved by limiting average program spending growth to less than two per cent until 2018-19.
  • Th e budget projects 2.2 per cent real GDP growth in 2016. The net debt-to-GDP
    r a ti o is not forecasted to rise above its current 39.6 per cent.
  • The medium-term revenue outlook notes it is dependent on "prudent assumptions" related to the "current federal government's commitments for additional funding for infrastructure, home care, and jobs and training.
     
Revenue and spending
  • The province is forecasting to bring in $126.5 billion in revenue in 2015-16, which is $2.2 billion more than projected in the 2015 budget.
  • The government is forecasted to spend $120.9 billion on general program spending and another $11.2 billion on interest on debt.
  • The government said it has generated $930 million through initiatives that addressed the underground economy. 
     
Alcohol tax increases

  • The LCBO will increase the mark-up on all wine p r od u c t s by two percentage points each year for three years, and one per cent in the fourth year, totaling
    seve n percentage points by 2019.
  • If manufacturers decide to pass on the increase, a $7.95 bottle of wine will increase 10 cents each year for three years and five cents the final year.
  • Th i s is expected to bring the government $15 million per year in revenues in
    2016 - 17 , increasing to $75 million by 2018-
    19.
     
Other tax increases
  • Th e province is increasing the tobacco tax by $3 per carton of 200 cigarettes.
    Th e province will use the $5 million in expected revenues from the tax increase to fund access to smoking cessation services for priority populations .
     
Post-secondary education
 
Ontario Student Grant
  • Tuition will be free for students with financial need from families with incomes of $50,000 or lower.
    • Most students in this income bracket will receive grants greater than the average cost of tuition.
  • This will be achieved by redirecting funding from the Ontario Tuition Grant,  Ontario Student Opportunity Grant, Ontario Access Grants and other OSAP grants.
  • All students will be the same of better off as under the Ontario Tuition Grant.
    • More than half of students from families with incomes of $83,000 or less will also receive non-repayable grants that exceed average tuition.
Cap and trade
The province is projecting it will raise $1.9 billion in 2017 from the cap-and-trade  auction. Permits will be auctioned quarterly until 2020, the end of the first compliance  period. Carbon will be priced at $18 per tonne.
  • Th e cap-and-trade program is expected to result in a small negative change in GDP - about 0.03 per cent lower in 2020 than if the program was not  implemented.
  • The program is expected to raise the average household's energy costs by $13 dollars a month - $8 in gasoline prices and $5 in natural gas costs.
  • According to government projections, household electricity charges will go down $2 per month.
Health care
  
Primary care
  • Ontario is investing an additional $85 million over three years to help primary  care teams, such as nurse-led clinics and Aboriginal Health Access Centres, effectively recruit and retain staff.
  • The province pledged to expand the scope of registered nurses to allow them to prescribe some medications to patients.
  • P h a r m a c i s t s will be authorized to administer more vaccines , including travel vaccine.
Ontario Drug Benefit Program
  • Ontario's Drug Benefit Program will be redesigned for "long-term sustainability."
  • Th e changes will benefit low-income seniors by increasing the income-eligibility thresholds for the low-income seniors' benefit.
  • I t will also increase the annual Ontario Drug Benefit deductible and co-payment rates for middle-income seniors.
Health care funding amounts
  • The shingles vaccine will be made available for free to seniors age 65 to 70, saving eligible seniors $170 in out-of-pocket expenses.
  • Base hospital funding will increase by $345 million. This is the first increase in five years.
  • Funding for cancer care services will increase by $130 million over the next three years.
  • Funding for home and community care will increase by $250 million,or about five per cent since last year.
  • Residential hospices and palliative care services will receive an increase of $155 million in funding.
  • $10million in additional funding for Behavioural Supports Ontario, which will help long-term care residents with dementia.
Social services
 
Affordable housing
  • Budget includes an investment of $178 million over three years for affordable housing subsidies, including the construction of 1,500 new units.
  • This funding will:
    • P ro v i d e $45 million for the Community Homelessness Prevention Initiative.
    • P ro v i d e $2.4 million for a new portable housing benefit that would provide options for those fleeing domestic violence.
Other services
  • Ontario is investing $333 million over five years to redesign and improve autism services.
  • Ontario Works and Ontario Disability Support Program rates will increase by 1.5 per cent in 2016.
    • Singles without children receiving Ontario Works will receive additional
      $2 5 per month. 
  • Th e budget promises "modernization" of Service Ontario, including an increase in online services and the ability to renew health cards online by 2018.
"Making everyday life easier"
  • Ontario is removing the $30 fee consumers pay for the Drive Clean
    program . The program remains mandatory but consumers will no longer have to pa y out-of-pocket for the tests.
Economic growth initiatives

Business growth
 
The province will invest $400 million over five years to modernize business regulations, reduce red tape and lower business costs.
 
The budget promises the establishment of a Strategic Investments Office that will serve as a "one-window point of entry" to provide "investment attraction services" to businesses. It will include an online portal to help firms navigate government investment programs.
 
A new Going Global Export Strategy will invest $30 million over three years to help firms expand their exports.

R&D

The 2016 budget is:
  • I nv e s ti n g $50 million at the Perimeter Institute - a global research centre for theoretical physics;
  • A nno u nc i n g a $35 million investment in the Advanced Manufacturing Consortium, made up of three universities - McMaster, Waterloo and Western- to help traditional manufacturers transform and innovate; and
  •   E s t a b li s h i n g a $20 million fund to connect colleges with companies for applied research programs.  
R&D funding cuts
  • The province is cutting the Ontario Research and Development Tax Credit rate from 4.5 per cent to 3.5 per cent.
  • It is also cutting the Ontario Innovation Tax Credit rate from 10 per cent to eight percent.  
Clean tech
  • The budget pledged a $55 million commitment to make investments in exchange for equity in clean tech firms.
Auto sector
  • The province pledged a new $15 million investment to the auto sector by establishing an Automotive Supplier Competitiveness Program and to create the Canadian Urban Transit Research and Innovation Consortium.
Biotechnology
  • The budget pledged $3 million over four years to Bioindustrial Innovation Canada to grow southwestern Ontario's bioeconomy and biochemical sector.
Innovation
  • The budget pledged $15 million to University of Toronto's Centre for Engineering Innovation and Entrepreneurship to strengthen the province's "Innovation Super Corridor."
Beer
  • The province is extending funding for the Ontario Microbrewery Strategy, which will provide $1.4 million over two years in support to complement brewers' launch in grocery stores.
Lottery and gaming
  • The province will extend its funding of the horse racing industry through a provincial transfer payment program - the program will be extended beyond its previous planned end date of March 2019, to March 2021.
Auto insurance in the sharing economy
  • The province is working with the Financial Services Commission of Ontario to regulate auto insurance in the sharing economy. The FSCO has approved one product and is currently reviewing other proposals
  • The government and FSCO want this to happen quickly and are considering the possibility of approving interim proposals.