Ontario 2019 Budget Analysis

There is little that is radical in this budget, which will come as a surprise to those who believe Doug Ford’s PCs are on a mission to destroy the world.
There is little that is radical in this budget, which will come as a surprise to those who believe Doug Ford’s PCs are on a mission to destroy the world.

Thursday’s Ontario budget is an ideas explosion, but that’s no surprise from a Progressive Conservative government that has been working overtime since it was elected. The party that ran on a short, simplistic platform has now put forward a four-year plan that touches every conceivable area of government activity.

There is little that is radical or shocking in this budget, which will come as a surprise to those who believe Doug Ford’s PCs are on a mission to destroy the world as we know it. Health and education spending are both up, despite all the talk about deep cuts.

NDP leader Andrea Horwath had a different take, saying the budget was driven by “irresponsibility and outright cruelty.” Someone should have given her a copy of the document.

Ford’s core promise is to balance the budget, but he’s taking a relatively leisurely five years to do it, and that’s after acknowledging that the 2018-19 deficit will be $11.7 billion. That’s still a whack of money, but quite a bit less than the $13.5 billion the PCs said they expected. Revenue was higher than anticipated.

Eliminating the rest of the deficit will not be easy. The budget mentions in passing that revenue will grow at an average of three per cent a year, but program expenses will rise only one per cent. Keeping spending that low is the magic trick of budgeting. There is quite a bit of information on how the PCs will pull it off, but it’s too soon to know if this is a credible plan to balance the budget, as the government claims.

The task is not made easier by adding new spending, but it’s still refreshing to see a government keeping its election promises. The new tax credit for child care will give families an additional $390 million a year in total support. The best part of it is that provides help for all types of child care. The previous government’s focus was on expensive, institutional child care that mostly benefited those wealthy enough to afford it or those poor enough to get a subsidy. This is a fairer, more realistic approach.

The government asserts that it can make auto insurance cheaper and better. Sounds good, but the details offered in the budget are not persuasive. Ontario insurers say they lose money on car insurance now. It’s difficult to see how they will offer more options, for less money, than they do now. The government is also sticking with the plan to “end the unfair practice of discriminating against drivers based on where they live.” This would undermine the entire basis of risk assessment and drive insurance costs up for drivers outside the GTA.

It was a happy budget day for business. Holding the line on the minimum wage, carbon tax savings, reducing workers insurance premium reductions and tax cuts will save businesses about $5 billion a year. It’s what one would expect from the Open For Business government, but nothing is said about the government’s abundance of special corporate handout funds. PCs used to call this corporate welfare and say it should be abolished. Sounds like a great place to help balance the budget.

Speaking of which, the cost of artificially reducing power bills is more than $4 billion a year. This was the Liberals’ single worst idea, and the PCs have made it their own. It’s difficult to think of a less useful way to spend public money.

The Ministry of Drinking has been working overtime. Expanding where Ontarians can buy beer and wine is only the beginning. In addition to the previously announced tailgating parties, the government opened the door to drinking in public parks, selling alcohol at 9 a.m., advertising happy hours, and cheaper drinks at Legion halls. In general, liberalizing booze rules makes sense, but trivial changes can be a distraction from more important work.

That said, this budget is a refreshing return to what budgets used to be. The focus is on facts and numbers, not the political rhetoric that consumed recent Liberal budgets. Unlike the federal budget, there is not a gender lens in sight.

This is not a balanced budget, in the fiscal sense, but it’s a politically balanced budget. There is limited public enthusiasm for a two-year slash to balance the books or a budget that makes everything worse.

Every government wants to be re-elected, and this one is no different. To do so, it will need to prove that it can act responsibly and deliver on its promises. This budget is the first big step toward that goal.

See Also:

(1) Ontario budget offers useful distractions while Doug Ford makes lasting change

(2) Ford Government Unveils New Ontario Licence Plates

(3) Ontario government plans to balance budget in five years, with deficit now at $11.7-billion

(4) 2019 BUDGET HIGHLIGHTS: Tuition rate cuts will save $450M

(5) TCHC and the $1.3-billion question

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