Ontario Budget 2007: Papers

Table of Contents

Foreword

Chapter I: Investing in People and Expanding Opportunity

Section A: Expanding Opportunities for Children and Families

• Overview
• New Ontario Child Benefit
  • Key Features of the OCB
• Other Supports for Children and Youth
  • Best Start
  • Children with Special Needs
  • At-Risk Youth
  • Family Responsibility Office
• Increased Support for Families Receiving Social Assistance
  • Building on Previous Initiatives
• Additional Support for Vulnerable Working Ontarians
  • Flowing Through the Working Income Tax Benefit
  • Minimum Wage
  • Employment Ontario
• Affordable Housing
  • New Housing Initiatives
  • Ongoing Housing Programs
  • Homelessness Prevention
• Supports for Seniors
  • Locked-in Accounts
  • Ontario Property and Sales Tax Credits for Seniors
  • Pension Income Splitting
• Other Supports for Vulnerable Ontarians
  • Improvements to Workplace Safety and Insurance
  • Employment Standards Program
  • Legal Aid Ontario
  • Developmental Services
  • Investments to Improve Social Infrastructure
  • Social Innovation Generation

Section B: A Fair Property Tax System

• Overview
• Introduction
• Cutting Business Education Property Taxes
  • The Economic Benefits of Reducing High BET Rates
  • Details of Proposed $540 Million BET Cut
  • Province-Wide Benefits of BET Cuts
• Ending GTA Pooling
• Fair and Predictable Property Taxes
• Timing of Reassessments — A Four-Year Cycle
• Phase-in of Residential Assessment Changes
• Assessment Appeal System

Section C: Expanding Opportunities for Students

• Overview
• Investments to Support Higher Student Achievement
• Foundations for a Better Future
  • Improved Literacy and Numeracy
  • Reduced Primary Class Sizes
• Student Success Strategy/Learning to 18
  • Engaged and Targeted Curriculum
  • Increased High School Graduation Rates
• Better Schools for Better Learning
  • Good Places to Learn
  • Textbook and Learning Resources
• Reaching Higher in Postsecondary Education
  • Investing in Postsecondary Education
  • New Investments in Postsecondary Education
  • Solid Progress in Student Assistance

Section D: Expanding Opportunities for Better Health

• Overview
• Achieving Better Health
  • Shortening Wait Times
  • Improving Access to Nurses, Doctors and Other Health Professionals
  • Promoting Wellness and Preventing Illness
  • Improving Efficiency and System Integration to Meet Patients’ Needs
• Details of Investments in the Health Sector

Section E: Expanding Opportunities for a Greener Ontario

• Overview
• The Clean Air and Climate Change Trust
• Incentives for Early Actions
• Innovation for Jobs and a Green Economy
• Building Green Communities
• Natural Resources Stewardship
• Looking Ahead

Section F: Expanding Opportunities for Economic Growth

• Overview
• A Changing Global Context: Fostering a Strong Business Environment
  • Competitiveness
  • Eliminating the Capital Tax in 2010
  • Business Education Tax Reduction
• Building on Ontario’s Innovation Advantage
• Building an Innovative Economy through a Skilled Workforce
  • Modernizing and Expanding the Training System
  • Breaking Down Barriers for New Canadians
• Modern Business and Financial Regulation
• Investing in Strong Communities
  • Provincial–Municipal Fiscal and Service Delivery Review
  • Support for Communities
  • Community Justice
  • Strong Rural Communities
  • A Strong Northern Economy
  • Aboriginal Peoples
• A Strategy to Further Boost Jobs and Economic Renewal
• Enhancing Growth in Ontario’s Industrial Sectors
  • Supporting Ontario’s Small Business Sector
  • Manufacturing
  • Resource Industries
  • Ontario’s Knowledge-Based Service Sectors

Section G: Investing in Ontario’s Infrastructure

• Overview
• Investing in Ontario’s Infrastructure to Expand Opportunity
  • Transportation Infrastructure
  • Ontario’s Electricity Infrastructure
  • Community and Social Infrastructure
  • Communications Infrastructure
• Ontario–Municipal Infrastructure Investments
  • Long-Term Funding of Infrastructure
  • Ontario’s Municipal Roads and Bridges
  • Municipal Water and Wastewater Infrastructure

Section H: Expanding Opportunities through a Modern and Efficient Government

• Overview
• Improving Services — Ontarians Benefit from Public Services Daily
  • Health
  • Education
  • Business
  • Improved Access and Response Times
• Strengthened Transparency and Accountability
• Management of Government Resources
  • Information and Information Technology
  • Human Resources

Chapter II:  Ontario's Economic Outlook and Fiscal Plan

Section A: Overview

• Ontario’s Economic and Fiscal Outlook
• Economic and Fiscal Progress
  • Ontario’s Economic Progress
  • Achieving Fiscal Balance
• Ontario’s Medium-Term Economic and Fiscal Outlook
  • Ontario’s Outlook for Stronger Economic Growth
  • Ontario’s Medium-Term Fiscal Outlook

Section B: 2006–07 Interim Fiscal Performance

• In-Year Revenue Performance
• Revenue Changes
• In-Year Expense Performance
• Expense Changes

Section C: Ontario’s Economic Outlook

• Private-Sector Economic Forecasts
• More Favourable Economic Environment
  • Lower Oil and Gas Prices Provide Relief for Ontario Consumers and Businesses
  • U.S. Economic Growth to Strengthen
  • The Canada—U.S. Exchange Rate Expected to Stabilize
  • Exports Set to Make a Strong Comeback
  • Interest Rates and Inflation to Remain Low
  • Impact of Changes in the External Economic Environment
• Ontario’s Domestic Economic Outlook
  • 270,000 More Jobs Expected Over Next Three Years
  • Solid Household Spending to Continue
  • Strong Investment Spending to Continue
• Details of the Ontario Economic Outlook
• Comparison to the 2006 Ontario Budget

Section D: Ontario’s Revenue Outlook

• Medium-Term Revenue Outlook
  • Canada—Ontario Agreement Commitments Addressed
• Medium-Term Revenue Changes Since 2006 Ontario Budget
• Potential Risks to Provincial Revenues

Section E: Ontario’s Fiscal Outlook

• Medium-Term Fiscal Outlook
  • Key Elements of Ontario’s Medium-Term Fiscal Plan
• Medium-Term Expense Outlook
  • Details of Expense Outlook
  • Risks to Expense Outlook
• Potential Risks and Cost Drivers
  • Expense Risks and Sensitivities
  • Compensation Costs
• Reserve
• Maintaining a Prudent Debt-to-GDP Ratio
• Key Changes Since the 2006 Ontario Budget

Section F: Accountability, Transparency and Financial Management

• Enhancing Transparency in Financial Reporting
• Strengthening Accountability to The Public
  • Pre-Election Report
  • Amendments to the Election Act and Election Finances Act
  • Interim Appropriations Act
  • Amendment to the French Language Services Act
• Improving Accountability of the Broader Public Sector
  • Amendment to the Auditor General Act
  • Consolidation of Hospitals, School Boards and Colleges
• Strengthening Financial Management in the Ontario Public Service

Section G: Details of Ontario’s Finances

• Fiscal Tables and Graphs
  • Support from Gaming for Health Care, the Ontario Trillium Foundation and Communities
  • Revenue from Lotteries, Charity Casinos and Slot Machines at Racetracks
  • Benefits from Commercial Casinos
  • Other Beneficiaries of Charity Casinos and Slot Machines at Racetracks
• Contingent Liabilities

Chapter III: Ontario’s Tax System Supports Prosperity

• Overview
• Enhancing Ontario’s Investment Climate
  • Eliminating the Capital Tax in 2010
  • Corporate Tax Harmonization
  • Enhanced Dividend Tax Credit
• Supporting Key Priorities
  • Relief for Low-Income Ontarians
  • Supporting the Environment
  • Supporting an Innovative and Knowledge-Based Economy
• Corporate Tax Harmonization and Simplification
  • Supporting Research and Development
  • Further Enhancements to Tax Harmonization and Simplification
• Paralleling Federal Tax Measures
  • Pension Income Splitting
• Technical Measures
  • Corporations Tax Act
  • Electricity Act, 1998
  • Fuel Tax Act
  • Retail Sales Tax Act
  • Tobacco Tax Act
• Non-Tax Revenue
  • Diamond Royalty
• Other Technical Amendments

Chapter IV: Borrowing and Debt Management

• Long-Term Public Borrowing
• Debt
• Total Debt Composition
• Debt Management
• Debt Maturities
• Cost of Debt
• Net Debt-to-GDP
• Consolidated Financial Tables
• Derivative Financial Instruments

Glossary

 

List of Tables

Chapter 1: Investing in People and Expanding Opportunity

• Table 1: Maximum Annual Ontario Child Benefit Payment
• Table 2: Bet Annual Ceiling Rates
• Table 3: Business Education Property Tax Cuts
• Table 4: Grants for Student Needs
• Table 5: LHINs and Related Health Services Providers
• Table 6: Expanding Opportunities for Better Health
• Table 7: Electricity Supply Projects
• Table 8: New Electricity Generation Projects in Progress
• Table 9: Education Challenges and Solutions
• Table 10: Economic Stimulus Package Investments for Vulnerable Populations
• Table 11: Selected Economic Stimulus Package
• Table 12: Total Program Review Savings and Efficiencies

Chapter 2: Ontario’s Economic Outlook and Fiscal Plan

• Table 1: 2006–07 In-Year Fiscal Performance
• Table 2: Summary of In-Year Changes to Revenue in 2006–07
• Table 3: Summary of In-Year Expense Changes in 2006–07
• Table 4: Ontario Economic Outlook
• Table 5: Private-Sector Forecasts for Ontario Real GDP Growth
• Table 6: Oil Price Outlook
• Table 7: The Canadian Dollar Outlook
• Table 8: Canadian Interest Rate and Inflation Outlook
• Table 9: Impacts of Changes in Key Assumptions on Ontario Real GDP Growth
• Table 10: The Ontario Economy, 2005 to 2009
• Table 11: Changes in Key Economic Forecast Assumptions, 2006 Budget Compared to 2007 Budget
• Table 12: Medium-Term Revenue Outlook
• Table 13: Personal Income Tax Revenue
• Table 14: Corporations Tax Revenue
• Table 15: Canada–Ontario Agreement Equivalent Revenue, 2006–07 to 2009–10
• Table 16: Sources of Medium-Term Revenue Changes Since 2006 Budget
• Table 17: Selected Economic and Revenue Risks and Sensitivities
• Table 18: Medium-Term Fiscal Plan and Outlook
• Table 19: Selected Expense Risks and Sensitivities
• Table 20: Selected Compensation Costs
• Table 21: Impact of Key Changes on Medium-Term Fiscal Targets
• Table 22: Medium-Term Fiscal Plan and Outlook
• Table 23: 2007–08 Fiscal Outlook
• Table 24: Revenue
• Table 25: Total Expense
• Table 26: 2007–08 Infrastructure Expenditures
• Table 27: Ten-Year Review of Selected Financial and Economic Statistics
• Table 28: Support for Health Care, Charities, and Problem Gambling and Related Programs
• Table 29: Support for the Agricultural Sector and Municipalities

Chapter 3: Ontario’s Tax System Supports Expanded Prosperity

• Table 1: Ontario’s Proposed Accelerated Capital Tax Elimination Plan
• Table 2: Ontario Dividend Tax Credit Rate
• Table 3: 2007 Budget Impact Summary

Chapter 4: Borrowing and Debt Management

• Table 1: 2006–07 Borrowing Program: Province and OEFC
• Table 2: Medium-Term Borrowing Outlook: Province and OEFC
• Table 3: Net Debt and Accumulated Deficit
• Table 4: Debt Maturity Schedule
• Table 5: Medium-Term Outlook
• Table 6: Derivative Portfolio Notional Value

 

List of Charts

Chapter 1: Investing in People and Expanding Opportunity

• Chart 1: Increases to Spending on Children’s and Social Services Since 2003—04
• Chart 2: 2007—08 Program Expenses
• Chart 3: Number of Recipient Families with Children by Income Security Program
• Chart 4: Supporting Families Receiving Social Assistance
• Chart 5: Investments Since 2003—04
• Chart 6: 2007—08 Program Expense
• Chart 7: Grants for Student Needs (School Year)
• Chart 8: Percentage of Grade 3 and Grade 6 Students in Ontario Achieving Provincial Standards
• Chart 9: Combined Operating Grants to Colleges and Universities
• Chart 10: Improvements in Student Assistance Under the McGuinty Government
• Chart 11: Priority Spending in Health Sector: Spending Increases Since 2003—04
• Chart 12: 2007—08 Program Expense
• Chart 13: Cumulative Change in Health-Related Revenues and Expense, 2003—04 to 2009—10
• Chart 14: Ontario Has Competitive Corporate Income Tax Rates
• Chart 15: Ongoing Operating Support to Municipalities Is Increasing
• Chart 16: Ontario’s Tax-Rate Advantage for Manufacturing Is Growing

Chapter 2: Ontario’s Economic Outlook and Fiscal Plan

• Chart 1: Ontario Real GDP and Employment
• Chart 2: Ontario’s Fiscal Performance
• Chart 3: Ontario Real GDP Growth
• Chart 4: Ontario’s Medium-Term Fiscal Plan
• Chart 5: Crude Oil Prices
• Chart 6: U.S. Real GDP Growth
• Chart 7: Canadian Dollar
• Chart 8: Ontario Real International and Interprovincial Trade
• Chart 9: Ontario’s Top Six Merchandise Export Partners
• Chart 10: Share of Ontario Interprovincial Exports, 2003
• Chart 11: Ontario’s Top Six Merchandise Import Partners
• Chart 12: 10-Year Government of Canada Bond Rate
• Chart 13: Ontario Employment
• Chart 14: Ontario Unemployment Rate
• Chart 15: Canadian Household Debt Interest Costs
• Chart 16: Mortgage Payments
• Chart 17: Business Balance Sheets Are Strong
• Chart 18: Real Business Investment
• Chart 19: Projected Debt-to-GDP Ratio
• Chart 20: Composition of Revenue, 2007—08
• Chart 21: Composition of Total Expense, 2007—08
• Chart 22: Composition of Program Expense, 2007—08

Chapter 4: Borrowing and Debt Management

• Chart 1: Borrowing — Domestic Market
• Chart 2: Borrowing — All Markets
• Chart 3: Debt
• Chart 4: Total Debt Composition
• Chart 5: Interest Rate Resetting Exposure
• Chart 6: Foreign Exchange Exposure
• Chart 7: Debt Maturities
• Chart 8: Effective Interest Rate (Weighted Average) of Debt
• Chart 9: Net Debt-to-GDP