Supermarket beer sales and a sell-off of Hydro One will help fuel Premier Kathleen Wynne’s massive ten-year, $130-billion infrastructure push.
Finance Minister Charles Sousa used Thursday’s provincial budget to tout the fact Wynne’s Liberals — re-elected last June with a majority — are “building Ontario up” to tackle the need for transit, highways, bridges, waterworks, and hospitals.
“This will be one of the largest infrastructure investments in Canada since the Last Spike was driven, completing the Canadian Pacific Railway,” Sousa told the legislature as he tabled his $131.9-billion spending plan with an $8.5-billion deficit.
“Right now, gridlock is choking our growth potential. This is not a ‘Toronto traffic’ problem — everyone from Bowmanville to Brampton to Burlington knows how hard it is to get across the Greater Toronto and Hamilton Area in rush hour,” said the Mississauga South MPP.
“Gridlock costs our economy up to $11 billion per year in the GTHA alone. The bottom line is we are losing revenue and losing growth because for a long time now we have not been building fast enough to keep up with our needs. Government after government has delayed investing in infrastucture. We can’t afford any more delays.”
The treasurer said former TD Bank CEO Ed Clark’s panel on privatization and monetizing government assets, which last Thursday recommended grocery beer sales and selling 60 per cent of Hydro One, was key to help fund the historic expansion.
That includes previously announced improved GO and TTC services, a new Hurontario LRT linking Mississauga and Brampton, extending Hwy. 407 from Brock Road in Pickering to Oshawa’s Harmony Road, which will open later this year, and one-third of the funding for Toronto Mayor John Tory’s SmartTrack surface rail system.
Saddled with a budget shortfall he hopes to eliminate in 2017-18 — in time for the October 2018 provincial election — Sousa said average annual increases on health and education would be limited to 1.9 per cent and 2 per cent respectively over the next few years.
Overall spending on other services — except justice and children and youth services — will be cut by 5.5 per cent, though no public-service jobs will be eliminated. Some of the reductions will come from time-limited expenditures such as this summer’s Pan Am Games, which are already funded.
One of the biggest savings is coming from decreasing public-sector pension costs thanks to reforms to civil service retirement benefits and a wage freeze over the past few years — in 2015-16 it’s $1.9 billion less than had been forecast in 2012.
Sousa said “managing compensation costs” for the 1.2 million employees on the public payroll along with reviewing and modernizing government programs are crucial to balancing the books.
“Every program is being examined with fresh eyes … is it still relevant? Is it effective? Is it efficient and is it sustainable?”
There are no tax hikes in the budget other than a three cents a litre beer charge starting this November. That will increase three cents per litre per year until 2018, the equivalent of a penny a bottle hike annually. That will bring in $100 million to the province’s thirsty coffers.
The expansion of wine sales in supermarkets will have to wait for another report from Clark’s panel that will be delivered by the end of the summer.
Ontario’s debt will rise to $298.9 billion next year, but propelled by low oil prices and a weaker Canadian dollar against the U.S. greenback the government predicts the economy will grow by 2.7 per cent.
Still, the amount owed by every man, woman, and child in the province has skyrocketed from $12,142 in 2006-07 to $21,642 this year.
“Since the recessionary low in June 2009, Ontario’s employment is up by more than 500,000 net new jobs, more than recovering our jobs lost,” crowed Sousa.
“In fact, three-quarters of these new jobs are in sectors that pay above-average wages (and) more than 83 per cent are in the private sector and 94 per cent are full time,” he said.
But interim Progressive Conservative Leader Jim Wilson, whose party has long called for more austerity measures, said the Liberal spending spree is not sustainable, noting “interest on the debt is the highest growth area in this budget — an average annual increase of 5.7 per cent.”
“That’s higher than education, higher than on health and yet there’s no plan to deal with the debt. It’s just going up and up,” he told reporters in the budget lock-up.
Wilson predicted the government — with debt-rating agencies breathing down its neck — will foist “future tax increases” on Ontarians.
NDP Leader Andrea Horwath warned the Liberal budget actually “weakens social services” because funding is not keeping up with inflation.
“Ontarians didn’t vote for a platform of cuts and privatization,” said Horwath, whose refusal to prop up the then minority Liberals’ May 1, 2014 budget triggered the election last June 12.
“This budget cuts education and closes schools, cuts health care and fires nurses,” she said, adding further labour strife looms.
“It is bad for Ontarians.”