2016 Ontario Budget
Chapter IV: Together Towards a Stronger Ontario and a Stronger Canada

Collaborative Action to Face Shared Challenges

In 2016, Canada will continue to face complex challenges. Uncertain global economic growth, greater international competition, the dangers of climate change and the far-reaching impacts of an aging population are a persistent reality for the federation. Canada’s governments must collaborate to achieve meaningful and lasting solutions.

A collaborative approach will help grow the economy, increase productivity and support job creation. Ontario remains committed to working with the federal government, provinces, territories, municipalities and Indigenous partners to take forward-looking action to build up Ontario and Canada. As Canada enters the next phase of federal–provincial collaboration, the Province will continue to be a champion of principles-based partnerships that recognize and build on Ontario’s investments and priorities.

Recent Progress on Shared Priorities

A collaborative approach to federalism has already begun to yield results.

Meeting of Canada’s First Ministers

In November 2015, federal–provincial–territorial first ministers met as a group for the first time since 2009. Premier Kathleen Wynne, along with other Premiers and the Prime Minister, discussed matters of importance to Canadians and how governments can work together to make real progress on these issues.

  • Leaders showed national unity on the international refugee crisis. Ontario will continue to work with a committed federal partner on this issue to welcome more refugees. The Province has committed $12.5 million for international relief efforts and to increase the number of refugees Ontario can welcome, and support the communities and agencies that will help them settle and integrate once they arrive. See Chapter I, Section E: Towards a Fair Society for further details.
  • This meeting set the tone for Canada and Ontario’s successful participation at the 2015 United Nations Conference on Climate Change in Paris and advanced the national discussion on addressing climate change.

Meeting of Canada’s Finance Ministers

In December 2015, Canada’s finance ministers met in Ottawa to discuss ways to work together to support job creation and economic growth.

  • Minister Charles Sousa and his fellow finance ministers discussed how governments can support job creation, enhance productivity and grow the economy through long-term, predictable investments in public infrastructure.
  • Ministers also discussed the newly proposed Canada Child Benefit, which will build on the work done by the Province through Ontario’s Poverty Reduction Strategy. If implemented by the federal government, these enhancements would help reduce the number of children living in poverty and complement the Ontario Child Benefit (OCB). Ontario looks forward to working collaboratively with the federal government to make progress on reducing child poverty.
  • Canada’s finance ministers also discussed the need to strengthen retirement income security. See Chapter I, Section F: Strengthening Retirement Security for further details.

Meeting of Canada’s Health Ministers

In January 2016, federal, provincial and territorial ministers of health met in Vancouver to move ahead on shared health priorities. Ministers agreed to work individually and collectively on the following areas where efforts will yield the greatest impact:

  • Enhancing the affordability, accessibility and appropriate use of prescription drugs;
  • Improving home and community care, and mental health services to better meet the needs of patients closer to home; and
  • Fostering innovation in health care services that improves both the quality of care and value for money.

In the spirit of collaboration, all ministers agreed that new resources are needed to stimulate and support health care and drive transformation. The federal minister also confirmed the federal government’s commitment to work collaboratively with provinces and territories towards a long-term funding arrangement for health care.

Other Meetings

In addition, Ontario, the federal government and the other provinces and territories continue to work together in a number of key areas. Ministers responsible for the environment, social services, transportation and highway safety, and Indigenous and northern affairs, among others, have all held productive meetings.

The Province looks forward to building on this foundation of constructive collaboration and continuing to make progress in these and other shared priority areas for Ontarians and Canadians.

Getting It Right: Principles to Guide the Next Phase of Federal–Provincial Collaboration

Ontario is committed to continuing to be a collaborative partner in the federation, and Ontarians recognize the long-standing, important role that the Province has historically played as a net contributor to the federation. In 2016–17, Ontarians are projected to contribute approximately $6.9 billion to Equalization, while the Province will only receive approximately $2.3 billion in return.

The Province is ready to work with a federal partner to build on Ontario’s investments and create an effective federation that will support sustainable public services, economic growth and job creation. Ontario is also committed to collaboration to make progress on a national solution that addresses the needs of future retirees.

The federal government has recognized that coordinated and collaborative action is needed to address the issues facing Ontarians and Canadians. As Ontario enters the next phase of relations with the federal government, it is seeking to build a shared agenda for economic growth and transformation and will continue to champion principles-based partnerships.

Canadian Infrastructure Partnership for Economic Growth

In 2013, provinces and territories invested over three times as much as the federal government on infrastructure (see Chart 4.2).

Ontario is making public infrastructure investments of more than $137 billion over the next 10 years, or about $160 billion over 12 years, starting in 2014–15.

The Province welcomes the new federal government’s commitment to build on existing programs and provide both immediate infrastructure investments and longer-term funding to support shared infrastructure priorities. A recent report by the Canadian Centre for Economic Analysis said that a small increase in federal government contributions generates significant benefits for Ontario’s economy and fiscal health.1 As the design of these new federal investments is finalized, it is critical that the federal government work together with the provinces and territories to ensure that programs are predictable, support jobs and economic growth, and respect fiscal plans.

New federal infrastructure funding should give provinces and territories a greater ability to identify those projects that can be acted on to maximize the positive impact on the economy, both now and in the future. Ontario is working with the federal government to secure its per capita share to further invest in shovel-ready and shovel-worthy projects for transit, social and green infrastructure. See Chapter I, Section B: Building Tomorrow’s Infrastructure Now for further details.

Finding Meaningful Health Care Partnerships

Ontario will continue to seek additional funding so that support for health care is adequate, responds to the needs of Ontarians and ensures the sustainability of the health care system over the long term.

Ontario remains focused on delivering excellent health care in the community. The Province is pleased that the federal government has committed to additional funding for home care. This new funding will support Ontario’s home and community care priorities.

Ontario welcomes the federal government’s decision to join the pan-Canadian Pharmaceutical Alliance, which negotiates lower drug prices on behalf of public drug plans. The Province continues to lead intergovernmental work to explore ways to improve coverage and equitable access to appropriate prescription drugs for Canadians, and is pleased that the federal government agreed, at the invitation of Ontario, to join a federal–provincial–territorial working group on this priority issue.

National Fight against Climate Change

The Province continues to lead in fighting climate change. Ontario recently signed a memorandum of understanding with Quebec and Manitoba, signalling the intention to link future cap-and-trade markets and committing to concerted climate change actions.

In reaching a new global agreement in Paris to limit temperature increases to under two degrees Celsius, the world is taking the strong and coordinated action required to reduce emissions and address and prepare for the challenges of a changing climate before it is too late. Ontario is pleased to participate with all provinces and territories and the federal government on a pan-Canadian climate change framework, and is looking forward to the upcoming meeting of Canada’s first ministers to make progress on this shared and critical priority.

Ontario has already made significant contributions towards addressing this global challenge. The Province successfully phased out coal-fired electricity generation in 2014, the single largest greenhouse gas (GHG) reduction initiative of its kind in North America. Between 2005 and 2013, Ontario’s emissions reductions of 40 megatonnes (Mt) surpassed Canada’s total emissions reductions of 23 Mt, meaning Ontario’s reduction represented over 170 per cent of the national total.2

As the federal government continues to engage provinces and territories on national initiatives, it is critical that any action recognize the steps Ontario has already taken to reduce GHG emissions. In addition, Ontario is eager to share the benefit of its experiences to help inform the development of potential national initiatives based on its own experience of developing a broad provincial climate policy. See Chapter I, Section A: Fostering a More Innovative and Dynamic Business Environment for further details.

Building Up Skills and Training Programs

The current system of labour market agreements between Ontario and Canada supports an array of skills training and employment programs and services for Ontarians. However, there is room for improvement.

Ontario is pleased that the federal government committed to additional funding of $700 million for skills training, including an increase of $500 million for Labour Market Development Agreements (LMDAs) each year to provinces and territories. The Province is looking forward to working with the federal government to ensure that new labour market funding is able to best meet the needs of Ontario.

Broader client eligibility in the LMDAs would provide flexibility to serve more vulnerable workers and allow more unemployed Ontarians to receive the skills training they need, while a proportionate and fair allocation of LMDAs and other skills funding would help Ontario better meet the needs of unemployed workers.

In general, federal decisions regarding labour market programs should recognize the experience of provinces and territories, which are best positioned to design and deliver the programs and services required to meet the needs of their workers and employers. These programs should also adapt to reflect the labour market of today.

Attracting Skilled Newcomers

Flexibility within immigration programs is key to allowing provinces and territories to attract skilled newcomers who contribute to a growing economy.

To help Ontario build a skilled workforce, the Ontario Immigrant Nominee Program can now nominate up to 5,200 highly skilled newcomers for permanent residence annually — 2,700 more than in 2014. Two new categories designed to attract economic immigrants (Human Capital Priorities and French-Speaking Skilled Workers) were launched through the federal government’s Express Entry system in 2015. Ontario is the first jurisdiction to launch a category dedicated to French-speaking prospective immigrants within its Immigrant Nominee Program. In December 2015, the Province also successfully launched two new Business Streams: the Corporate and Entrepreneur Streams. These new streams are designed to attract foreign corporations and entrepreneurs — with their new business ideas, talent and investment — to Ontario.

When highly skilled newcomers integrate smoothly, they can better contribute to the province’s economic growth. That is why Ontario has invested $26.4 million in 2015–16 in Ontario Bridge Training programs, which help highly skilled newcomers integrate into the labour market. Since 2003, the program has helped close to 50,000 people in more than 100 professions continue their careers in Ontario. The Province has also reduced financial barriers through a renewed $5 million investment in the Ontario Bridging Participant Assistance Program. Ontario will work with the federal government to renew its support for bridge training programs, which is set to expire in March 2016, to continue to serve as many participants as possible.

Ontario will continue to take action in partnership with the federal government to attract a skilled workforce and build a stronger economy, help newcomers and their families achieve success, and secure international trade and investment opportunities for the benefit of all Ontarians.

Reducing Poverty in Canada

The Province is making strategic investments in health, education and housing through Ontario's Poverty Reduction Strategy. See also Chapter I, Section E: Towards a Fair Society for further details. Ontario will collaborate with the federal government on the development of a Canadian Poverty Reduction Strategy, ensuring alignment and a shared agenda to achieve maximum benefits for Ontarians.

Continued Collaboration with Ontario’s Partners

Provincial–Municipal Partnerships

The government has a strong record of supporting and working with municipalities, while also taking measures to ensure local accountability. In 2016, the government will provide municipalities with ongoing support of over $3.8 billion — an increase of $2.7 billion above the support provided in 2003.

Ontario will continue to fulfil its commitment to upload social assistance benefit programs, as well as court security and prisoner transportation costs off the property tax base. This will ensure that municipalities have more property tax dollars to invest in local priorities such as roads, transit and economic development.

These uploads will be fully implemented by 2018. This represents a significant milestone in the provincial–municipal relationship and will help put municipalities on a financially sustainable footing. Going forward, the government’s focus will be on investing in the infrastructure that is vital to the health, prosperity and quality of life of Ontarians.

In partnership with communities, Ontario is making significant investments to revitalize infrastructure and grow the economy. The Province’s infrastructure commitments include transit, transportation and other priority infrastructure through Moving Ontario Forward, which is supported by $31.5 billion in dedicated funds, with about $15 billion available outside the Greater Toronto and Hamilton Area (GTHA) and about $16 billion available within the GTHA. As part of Moving Ontario Forward, the Ontario Community Infrastructure Fund is being expanded to $300 million per year by 2018–19, which will provide ongoing support for critical local infrastructure priorities.

Both the Province and municipal governments face fiscal challenges resulting from demographic, economic and other pressures. Ontario will continue to work in partnership with municipalities to promote a mature, positive and stable provincial–municipal financial relationship. Provincial measures are helping to improve municipal fiscal sustainability, but the Province must also consider its responsibility to protect key public services such as health, education and infrastructure.

Strengthening the Provincial–Municipal Partnership

In addition to implementing the provincial uploads, the Province has worked in partnership with municipalities to introduce measures that support communities. These measures include:

  • Sharing provincial gas tax revenues, which ensures a guaranteed source of funding for eligible municipalities to improve and expand their transit services. Since 2004, the government has allocated more than $3.4 billion in gas tax funding to municipalities, including over $330 million in 2015.
  • Providing annual unconditional funding through the Ontario Municipal Partnership Fund — $505 million in 2016.
  • Working with municipal and policing partners to develop a new Ontario Provincial Police billing model for municipalities that is fair and equitable.
  • Providing long-term predictable funding through the Ontario Community Infrastructure Fund, which is supporting the revitalization and repair of roads, bridges and other critical infrastructure in small, rural and northern communities.
  • Implementing the Connecting Links program that will provide $20 million in 2016–17, up from $15 million announced in the 2015 Budget, to help municipalities pay for construction and repair costs for municipal roads that connect two ends of a provincial highway through a community or to a border crossing. Funding for this program will increase to $30 million per year by 2018–19.
  • Working in partnership with municipalities to enhance the fairness, effectiveness and predictability of Ontario’s property tax and assessment system.
  • Consulting with municipal partners through the Memorandum of Understanding with the Association of Municipalities of Ontario, as well as through other forums.
  • Undertaking an integrated review of the Municipal Act, the City of Toronto Act and the Municipal Conflict of Interest Act to ensure that municipalities continue to be accountable, open, flexible and responsive to the people they serve.

Indigenous Partners

Ontario has made it a priority to act on the Calls to Action from the Truth and Reconciliation Commission of Canada. The Province will work with First Nations, Inuit and Métis peoples to acknowledge and teach the history and legacy of residential schools, take action to close gaps in outcomes, and build culturally sensitive and community-based services. Ontario will continue to work with Indigenous partners as the Province responds to the Commission’s final report, released in December 2015. See Chapter I, Section E: Towards a Fair Society for further details.

Ontario has a solid foundation from which to act on the report. Most recently, Ontario signed a historic Political Accord that represents a renewal of the relationship between First Nations and Ontario. The Political Accord is an important step in the ongoing empowerment of First Nation communities and will help in the continued pursuit of reconciliation.

Ontario welcomes the federal commitment to ensure quality education for First Nation children on-reserve, address violence against Indigenous women and girls, and improve essential physical infrastructure for First Nation communities including clean drinking water, access to sustainable electricity and adequate housing. Together with Indigenous partners in Ontario, the Province is ready to work with the federal government as it acts on these commitments.

Moving towards Community-Based Regulation

The government remains committed to a dialogue with First Nation communities and leaders on tobacco and gasoline, including discussions on self-regulation of tobacco on-reserve and revenue-sharing. Self-regulation of tobacco on-reserve helps support First Nations oversight of tobacco sales on-reserve, and provides a basis for mutually beneficial solutions regarding revenue-sharing.

The government has demonstrated this commitment through the tobacco pilot projects with the Chippewas of the Thames First Nation and the Mohawk Council of Akwesasne, and it welcomes similar discussions with other First Nation communities.

In 2015, the Province appointed Kathleen Lickers and Peter Griffin to lead a formal review of the First Nations Cigarette Allocation System. Kathleen Lickers is a Seneca from the Six Nations of the Grand River First Nation in southern Ontario, and has been practising law for 20 years. Peter Griffin is a lawyer who has practised civil and commercial litigation in Toronto since 1980.

  • In February 2016, the facilitators provided the government with their First Nations Cigarette Allocation System: Independent Review Report, which offers an overview of perspectives on the allocation system, and on-reserve sales of tobacco in general.
  • The Independent Review notes that while there are varying perspectives on the sales of tobacco on-reserve, a number of key principles are shared among First Nations, the government, industry and public health experts, including the following:
    • Further developing the long-term relationship shared by Ontario and First Nations;
    • A need to support economic development and diversification on-reserve;
    • The importance of protecting children and youth from tobacco, and encouraging smoking cessation both on- and off-reserve;
    • The recognition that individual First Nation communities have different needs and perspectives on tobacco; and
    • An acknowledgment that an alternative approach to tobacco sales on-reserve must generate revenue for First Nation community programs and services.
Next Steps

The government is currently examining the findings of the Independent Review to determine the most appropriate path forward, including hosting a tobacco forum.

The Province and the Anishinabek Nation, which represents 39 First Nation communities across Ontario, have agreed to work together to begin developing a framework for tobacco and gasoline that would support revenue generation for the Anishinabek Nation from on-reserve sales.

Beginning in March 2016, the government will engage First Nation communities on modernizing the Ontario Gas Card Program to improve customer service and program integrity. Advice received from this engagement process will also support the work underway with the Anishinabek Nation.

Other Ongoing Partnerships

The Province continues to lead the commitment to complete a comprehensive renewal and modernization of the Agreement on Internal Trade. Additionally, Ontario and Quebec have agreed to a series of economic roundtables that will identify initiatives that would support business development, strengthen regional economic growth and job creation, and facilitate action on issues related to investment and the environment.

150 Years of Ontario and the Federation

In 2017, Ontario will celebrate the 150th anniversary of its place as a province within Canada. This anniversary provides an opportunity to celebrate its achievements as a society and to position Ontario as a place of economic growth and prosperity for future generations.

As reported in the 2015 Budget, the government will deliver a program that will recognize and celebrate the past, while building a strong and secure foundation for the future.

Ontario has always been a leader on the national and international stage, as well as in innovation, cultural expression and community diversity. This celebratory year will create a strong economic, social and cultural legacy for Ontarians, with a particular focus on youth.

Produced with community organizations, municipalities and the federal government, the Ontario 150 programming will be a proud commemoration of the sesquicentennial for Ontarians in all regions across the province.

1 D. Stiff and P. Smetanin, “Ontario Infrastructure Investment: Federal and Provincial Risks & Rewards,” Canadian Centre for Economic Analysis, (2016).

2 United Nations Framework on Climate Change, “National Inventory Report 2015– Part 3”, (2015) http://unfccc.int/national_reports/annex_i_ghg_inventories/national_inventories_submissions/items/8812.php

Chart Descriptions

Chart 4.1: Net Contribution to the Equalization Program, 2016–17

This chart shows that in 2016–17, Ontario is expected to be the largest net contributor to the Equalization program. Ontario is followed by Alberta, British Columbia, Saskatchewan, and Newfoundland and Labrador. All other provinces receive more in Equalization payments than their taxpayers contribute through federal taxes.

Return to Chart 4.1

Chart 4.2: Contribution to Infrastructure Investment in Canada by Order of Government in 2013

This bar chart illustrates the share of total public infrastructure investment made in Canada in 2013 by the federal government, provincial and territorial governments combined, and municipal governments combined. The three bars show that the federal government contributed 14 per cent to total public infrastructure investment, compared to 46 per cent by provinces and territories, and 40 per cent by municipalities. These shares demonstrate that provinces and territories invested three times as much as the federal government in infrastructure in Canada in 2013. These calculations are based on data from the Council of the Federation’s Fiscal Arrangements Working Group, Infrastructure Sub-Group.

Return to Chart 4.2