|Ministry of Finance
Toronto ON M7A 1Y7
|Ministère des Finances
Toronto ON M7A 1Y7
For Immediate Release
May 9, 2001
TORONTO Finance Minister Jim Flaherty today
introduced Ontario's third consecutive balanced budget, outlining the
responsible choices made to support strong economic growth, fiscal
responsibility and accountability.
The 2001 Budget includes the largest debt reduction in the province's history, the fulfillment of the Government's promise of a 20 per cent personal income tax cut and competitive business tax cuts. Record investments in health care and education are matched by accountability and value for money measures. Other proposed initiatives include significant transportation and environmental investments as well as support for society's most vulnerable people.
"It is the first time in nearly 100 years that an Ontario government has presented three consecutive balanced budgets. No other government has provided the people of Ontario with such certainty. No other government has made such responsible choices," Flaherty said. "We must act responsibly in order to guarantee the exceptional quality of life that the people of this province deserve," he said.
Cutting Your Taxes
Noting that tax dollars belong to the people of Ontario, not the government, the Minister said, "we believe that, given the opportunity, the hard-working people of this province will invest and spend their money in ways that will help the economy to grow."
Since 1995, Ontario's economy has grown by almost 25 per cent, reported Flaherty. The privatesector consensus is that Ontario's economy continues to grow this year at 2.3 per cent and growth is expected to accelerate to 3.6 per cent in 2002.
The Minister went on to report that every province in Canada is following Ontario's tax cut lead. However, Flaherty said the federal government needs to do more, noting that "in Ontario, we've told 660,000 lower-income earners that we don't want their income tax money. With the changes proposed in this Budget, an additional 75,000 people would pay no Ontario income tax. Yet these same 735,000 lower-income earners would continue to pay income tax to the federal government," he said as he challenged Ottawa to match Ontario's income tax cuts for people with lower incomes.
Minister Flaherty announced another Mike Harris Government promise kept with the proposal to "... complete our 20 per cent personal income tax cut promised in 1999. Ninety-five per cent of taxpayers - virtually everyone earning less than $100,000 a year - would see a cut of at least 20 per cent."
The Government is proposing to take the first step toward eliminating the personal income surtax, removing this burden for more than 340,000 middle-income earners.
Since Ontario started cutting taxes, tax revenues have increased by more than $15 billion and business investment in the province has increased by 66 per cent. Since 1995, businesses have created more than 822,000 net new jobs.
"I believe the first priority of every business in Ontario should be paying wages, not paying taxes," Flaherty said as he announced Ontario's Edge, a package of initiatives intended to make Ontario the best place to do business.
Ontario's Edge consists of four components, three of which involve proposals to build on Ontario's tax competitiveness:
The fourth component of Ontario's Edge
builds on Ontario's high quality of life, including addressing the
gridlock on highways and roads. The Budget provides for $500 million of the $1
billion SuperBuild Millennium Partnerships Initiative to be focused on
transportation and environmental initiatives.
Clean air and water are important aspects of Ontario's quality of life. The Government proposes to significantly increase its investment in the environment by $25 million. Since 1997-98, the Ministry of the Environment's operating funding will have increased by 51 per cent.
Value for Money
Minister Flaherty announced the Government has increased health care spending by almost $6 billion since coming to office, exceeding the Government's commitment to increase health care spending by 20 per cent.
"People told us that health care is their top spending priority," Flaherty said. "We listened and we responded. We have invested as no other government before in this vital area. This year alone we are increasing health operating spending by $1.2 billion or 5.4 per cent."
In 1995-96, 38 cents of every dollar the Government spent on programs went to health care. This year, 45 cents of every dollar spent on programs will go to health care. The Government will continue to invest in health care to meet the needs of the province as the population grows and people age.
"Today we are spending $745 per second on health care ...", the Minister said. "We cannot continue to increase our spending on health care at this rate. It is simply not sustainable.
" "The Ontario government believes that fundamental reform is necessary to save Canada's health care system," Flaherty said. He called on the federal government to provide its fair share - 50 per cent of all health care funding increases - and for an open and honest dialogue about the future of health care. "One of the first steps in health care reform is accountability," he said. To that end, the Government intends to introduce legislation that will require hospitals to balance their budgets each year.
More than 80 cents of every dollar the Government spent last year on programs and capital went to individuals and organizations in the broader public sector. The Government is proposing a new Public Sector Accountability Act requiring all major organizations, including hospitals, that receive taxpayer dollars from the Ontario government to balance their budgets each year and to publicly establish their objectives and report their progress in meeting those objectives.
To further support accountability, a private sector panel will be formed to review the role of government in the 21st century, and a value-for-money review of all government spending will be conducted. "This value-for-money review will direct us to wasteful activities that could be eliminated," Flaherty said. "It will generate savings to invest in our highest priorities." To launch this process, Flaherty announced in his Budget that the Province is "getting out of the banking business" and seeking a buyer for the Province of Ontario Savings Office.
Today's Debt Payment: Tomorrow's Tax Cut
The Budget reports the largest debt reduction made by any government in the history of the province of Ontario.
As a result of prudent management, the budget surplus in the fiscal year just ended allowed the Government to reduce net provincial debt by a record $3 billion. After only two years, the Government has achieved 80 per cent of the $5 billion reduction in net provincial debt promised during this current term of office.
Helping the Most Vulnerable
"Supporting our most vulnerable people is, perhaps, the most responsible thing we can do," Flaherty said. "It is our duty as a government."
Measures announced in support of people most in need include:
Investing in Our Young People
"Our young people are perhaps our biggest resource. This government has invested strongly in the well-being of children and young people - from the moment they take their first steps to the day they start their first job."
In order to reach children early, the Minister announced an increased investment in Early Years programs of $114 million this year, growing to $193 million.
"Our Throne Speech set out a vision for education in this province - a vision of high standards for students and more choice for parents," Flaherty said. The allocation for the publicly funded school system will be increased by $360 million this year. In addition, the Government proposed a partial tax credit for parents of children at independent schools, to be phased in over the next five years.
The Budget announced one of the largest investments ever made in Ontario's post-secondary education system. In the fall of 2003, when Grade 12 and OAC students graduate together for the first time, combined with demographic and participation rate increases, a record number of students will enrol in colleges and universities. "Today, I am pleased to announce that we are providing certainty to each and every one of these students - and their parents - that there will be a place for them at an Ontario college or university," said Flaherty.
The Minister announced that operating grants to colleges and universities will increase by an estimated $293 million by 2003-04.
Flaherty also announced $60 million for the Ontario Institute of Technology, a new university to be located on the campus of Durham College, responsive to the global and local marketplace and offering a mix of hands-on experience and academic knowledge.
The Budget also proposes measures related to skills training, including:
A Plan for the Future
The Minister said in closing "the responsible choices we make today guarantee tomorrow's prosperity."
"Our plan is a solid one: cut taxes for growth, spend accountably, spend responsibly. Our plan is common sense. We must continue to focus on our pledge to make Ontario the best place to live, work and raise a family in the 21st century."