Budget 2020

Here is our quick summary the 2020 Ontario Budget

The 2020 budget, released in November 2020,  invested heavily in managing COVID-19, subsidizing businesses, and increasing infrastructure spending.

There were, however, only very modest supports for housing, social programs, equity and income supports for people living in poverty. 

What was announced in the social policy area was often re-announcements, such as previously announced commitments to child care expansion, front line workers’ “danger pay,” transit infrastructure, and LTC beds. Other social policy budget items mentioned are provincial implementations of federal investments. The $800 million in new investments in the social service sector reflect almost exactly increased federal transfer in that area. Spending on transit and schools relies on over $2 billion in federal funds, and the Safe Restart Agreement investment relies primarily on federal dollars.

Healthcare Costs
Funding for healthcare is set to increase, but a lengthy account of various spending plans in the end only bring Ministry spending up by  $2.5 billion from last year, as the sector manages Ontario’s on-going COVID-19 response. This and some draws on reserves enable hospital investments that include:

  • $1.4 billion to reduce testing backlogs;
  • $351 million in added hospital capacity;
  • $200 million to purchase additional PPE;
  • $572 million for increased operating costs.

Another $461 million was announced to raise PSW wages $3 in Long-Term Care and Community Care settings until March 2021. This falls short of the call for a $4 pay increase, and is not permanent.

An additional $176 million has been allocated towards the Mental Health and Addictions Roadmap to Wellness plan, adding on to the $380 million already announced,

The new Seniors’ Home Safety Tax Credit offers a 25% credit towards home renovations up to $10,000, that increase safety and accessibility, regardless of income level and whether income tax is owed. While multi-generational homes can also benefit – with live-in family members considered eligible – the tax credit appears to exclude disabled people under 65.

The government has also announced $1 million per year for Inclusive Community Grants to help provide supports for healthy and active aging for seniors, and added $3.1 million in new programs for seniors at home to fight social isolation.

Investments in Long Term Care will raise the minimum standard of care to 4 hours/day over a four year period; as well as accelerating the creation of the previously committed 30,000 new beds over 10 years, by ensuring hundreds are fast tracked in Toronto and Peel by 2022.

Child Care and Education
The government reiterated its commitment to adding 30,000 child care spots over the next 5 years, but provided no new funding beyond current commitments.

$1.3 billion was “made available” to support a range of investments in safe school openings, but 1/3 of this comes from school boards being allowed to draw on their own local reserves, and another $381 million comes from the federal Safe Return to Class Fund.

The government has announced a $13 billion investment, over the next 10 years, to fund the construction and renewal of schools, including the allocation of $1.4 billion towards the repair of existing facilities.

There will also be a $361 million increase in Developmental Services to support existing clients and new high-risk clients.

There was limited investments in housing, despite calls from Municipalities to match major investments in the sector. The Social Services Relief Fund is topped up with $212 million, adding to about $300 million in federal funds, to reach $510 million to address COVID related pressures on shelters, provide further rent relief and invest in long-term housing.

Commitments on new housing in the budget was limited to assurances that the Transit Oriented Communities Act would help to deliver more housing around new transit stations, but did not include any new investment for capital costs. Other than investments in the Safe Restart Agreement, provincial funding in housing is actually falling by over $300 million.

Income Supports
Parents will again receive a one-time payment of $200 per child up to 12 years old, or $250 for children with special needs up to 21.

While touting an increase in funding for system improvements to social assistance, there has been no increase in rates or willingness to retreat from claw-backs on federal income supports. The $526 million in added social assistance spending appears to reflect the costs associated with the reversal of planned cuts to the Transition Child Benefit and the decision not to proceed with a change to the definition of disability that would have disqualified many from ODSP. These seem to be less a matter of spending increases than cancelled cuts.

There will be an additional $60 million invested in the Black Youth Action Plan, over 3 years; doubling its base funding to extend the current program and create new training and employment programs.

Last year’s reduction in the departmental budget for Indigenous services from $146 million to $74 million will be partially restored, to $82 million by next year.

Beyond this, there was limited discussion of equity issues in the budget, with little acknowledgement that people continue to be differently affected by the pandemic. The combined references to women, Indigenous people, and Black people equalled 38 total mentions, while references to alcoholic beverages were made a total of 40 times.

Digital Supports
$680 million was announced, over four years, to ensure Broadband or cell infrastructure reaches every community. An investment of $500 million into the Ontario Onward Acceleration Fund will improve digital access to government services, over four years. $57 million has been allocated towards helping businesses transition online.

Besides investing $15 million for 30,000 new devices to help more students get online, the budget has no plan to facilitate internet access for individual households without it.

The Nonprofit Sector
Compared to funding for other sectors of the economy, like the $100 million in supports for Tourism, the support level for non-profits was low.

Investments of $25 million for arts and $1 million for Francophone non-profits were announced.

Despite the crucial role of non-profits in sustaining the province throughout the first wave of the pandemic, the budget contains very little relief for the sector, and makes no mention of the $680 Million Non-profit Stabilization Fund proposed by the Ontario Non-profit Network.

Industry Relief, Tax Cuts, and Business Subsidies
There are considerable supports and subsidies to private for-profit businesses in the budget, including:

  • $300 million in energy subsidies;
  • $60 million in one-time grants;
  • $241.2 million of the $900 million total invested in federal government’s Canada Emergency Commercial Rent Assistance for small businesses.

Significant tax cuts were also outlined, including:

  • A Business Education Tax cut of $450 million;
  • An Employer Health Tax cut of $360 million;
  • Penalty-free deferrals on income tax and Workplace Safety and Insurance Board premium payments.

The province also empowered municipalities to cut property taxes on small businesses, and offered to match those cuts for up to $385 million in potential reductions.

Transportation Infrastructure 
As previously announced, Ontario will continue with the $62.7 billion investment, over 10 years, for the Scarborough subway, Hurontario LRT and GO trains. $2 billion (shared 50/50 with the federal government) will address transit operating pressures, with another $2 billion to ensure COVID compliance. An investment of $22 billion, over 10 years, was announced for roads.

Overall, this budget addressed the short-term need to manage COVID and sustain the business sector, but did not tackle the broader social impacts of the pandemic and the need to invest in communities to fuel an effective recovery.

If you have questions about the budget or this update please feel free to email sean@conveneTO.ca