2016 Ontario Budget
Foreword

Jobs for Today and Tomorrow

The 2016 Budget is the product of open and extensive consultations. Our pre-Budget consultations, including Budget Talks online, collected input from tens of thousands of people and many of their ideas are contained in this plan.

The global economic downturn that began in 2008 hit Ontario hard. People worked together to confront the challenges that came with the recession. The government put a plan in place to protect and create jobs. Today, Ontario is a leader in growth and job creation. For the last two years, Ontario attracted more foreign direct investment than any other province or U.S. state.

Economic uncertainty is once again facing much of the world. The price of oil and the Canadian dollar have fallen considerably — two factors that affect different parts of Canada in different ways. These, combined with Ontario’s underlying economic strength, provide our manufacturers, exporters and services sector with opportunities for growth and job creation.

While Ontario’s economy is projected to be one of the fastest growing in Canada, the government continues to plan for future prosperity. We are balancing optimism about Ontario’s economy with the uncertainty around us. To grow the economy and create more jobs, the government is building new partnerships and making key strategic investments.

Building Prosperity

Ontario’s economic growth is outpacing Canada’s, and our businesses will secure future success through ongoing innovation, which will help them develop new products and services. They also need markets for these products. Modern, well-planned infrastructure that is built with long-term vision will support the economy and also help people in their everyday lives.

A solid long-term economic plan, combined with strong fiscal management, will further build investor confidence. The government’s plan lays out a clear roadmap for economic growth and job creation for today and tomorrow.

Fostering a More Innovative and Dynamic Business Environment

Ontario is fostering a more innovative and dynamic business environment. We have cut the marginal effective tax rate on new business investment in half since 2009. We have reduced the cost of doing business by eliminating regulatory requirements and duplication. Business owners know they will find highly skilled, highly educated workers in Ontario to deliver their products and services.

The Province’s economic plan supports good jobs today in communities across Ontario by investing in infrastructure and in a low-carbon economy driven by innovative, high-growth, export-oriented businesses. The plan invests in people’s talents and skills and their ability‎ to get and create the jobs of the future, by expanding access to high-quality college and university education. The plan also helps all Ontarians achieve a more secure retirement.

More than 600,000 net new jobs have been created since the depths of the recession. The government is projecting the creation of an additional 323,000 jobs between 2016 and 2019. That would bring the total number of jobs created to more than 900,000 over 10 years. Ontario’s unemployment rate of 6.7 per cent is below the national average.

The Business Growth Initiative is Ontario’s new strategy to increase the province’s global competitiveness. It builds on existing strengths and is based on creating an innovation-driven economy, catapulting more Ontario firms into global leadership, modernizing the regulatory system and continuing the reduction of red tape.

Investing in a Low-Carbon Economy

The global fight against climate change presents new opportunities for driving Ontario’s economic growth. Ontarians have the skills, talent and innovation to become a model for sustainable growth and prosperity. Ontario has already taken strong measures to end smog days, cut pollution and fight climate change. In 2014, we eliminated coal-fired electricity generation, the single largest greenhouse gas reduction initiative of its kind in North America. Ontario’s proposed cap-and-trade program — in addition to reducing emissions — will direct resources and investment to encourage companies to be more innovative and ensure households thrive during the transition to a low-carbon economy.

Building Tomorrow’s Infrastructure Now

Infrastructure investments stimulate economic growth and create jobs today, while supporting future jobs and helping people in their everyday lives. Infrastructure moves goods more competitively, attracts private investment and expands opportunities for suppliers, buyers and skilled workers. We are making the largest investment in infrastructure in Ontario’s history by investing about $160 billion over a 12-year period, starting in 2014–15. While we are investing in short-term projects that create jobs now, we are also putting long-term projects into place that will yield dividends for generations to come.   

The 2016 Budget invests in new highway projects and expands the Ontario Community Infrastructure Fund and the Connecting Links program to support local communities. This Budget is also increasing investments in health care infrastructure to maintain hospitals in good repair.  

Ontario is maximizing the value of its assets so we can build the infrastructure we need for today and tomorrow.

Investing in People’s Talents and Skills

Ontario’s greatest strength is its people. We are making investments that build on Ontario’s highly skilled workforce. We are transforming financial assistance so that, starting in the 2017–18 school year, average tuition will be free for students, with need, from families who earn a household income of $50,000 or less. More than 50 per cent of students from families with incomes of $83,000 or less will have grants in excess of average tuition. No Ontario student will receive less than they are currently eligible for through the 30% Off Ontario Tuition grant. Overall, tuition will be less of a barrier to entry and students will graduate with less debt.  The end result will be more young people who are better educated and better prepared to enter the workforce — a competitive advantage for Ontario.

Strengthening Retirement Security

Ontario’s plan for jobs and the economy also strengthens retirement security. The Ontario Retirement Pension Plan would narrow the savings gap for millions of people who lack the security of a workplace pension plan. More people will enter their retirement with confidence.

Fair Society

Ontario continues to build a fair society. Ontario is improving the supports necessary to lift people out of poverty and help them live a meaningful life to the benefit of Ontario’s economy and society. Social assistance rates will increase by 1.5 per cent, while a further top-up will be provided to those with the lowest social assistance rates. Progress on the goal to end chronic homelessness is accelerating through further support for families in need of housing units, counselling and addictions treatment.

The government is making it easier for a greater number of children and youth with autism to receive critical interventions sooner and will ensure services are better matched to meet their needs. Through such initiatives as the Long-Term Strategy to End Violence against Indigenous Women and acting on the recommendations of the Truth and Reconciliation Commission of Canada, we are improving social conditions and economic opportunities for Indigenous peoples. In implementing the Commission’s Calls to Action, we are working with First Nation, Inuit and Métis peoples to acknowledge and teach the history and legacy of residential schools, take action to close gaps in outcomes, and develop culturally sensitive and community-based services. This will help Indigenous peoples and their communities succeed economically.

Investing in Health Care

Ontario’s economy supports strong public services. Health care is one of the most important provincial services that Ontarians rely on. The 2016 Budget supports continued commitments to increase patients’ access to primary care, to provide more care for people at or close to home, and to help all Ontario families continue to receive quality health care. In public consultations, there were repeated calls for the expansion of hospice care. The government plans to increase its investments in residential hospice and palliative care.

Making Everyday Life Easier

The 2016 Budget also contains several measures to make everyday life easier, and to maintain the high quality of life that Ontarians rightfully expect. We are using technology to make it easier to use public services. Steps have been taken to lower everyday costs for things like hospital parking fees and auto insurance. We are eliminating the Drive Clean emissions test fee. Home energy-efficiency incentives are being enhanced to help homeowners reduce their energy bills. We have increased choice and convenience by expanding beer sales to grocery stores and are now expanding wine sales to grocery stores.

A Stronger Ontario and Stronger Canada

For years, Ontario has called on the federal government to be a willing partner. Ontarians are net contributors to Canada’s finances and Ontario is sensitive to the needs of other provinces. Canada’s new government in Ottawa has shown itself willing to work with Ontario to continue growing the economy and creating jobs, and we look forward to further collaboration.

Strong Fiscal Management on the Path to Balance

We are on track to balance the budget in 2017–18. While we continue to invest in the key public services relied on by families, Ontario provides value for tax dollars spent by focusing on outcomes through Program Review, Renewal and Transformation — and by retaining the lowest per capita program spending in Canada.  This has helped us beat our fiscal targets and we are on track to do this for the seventh year in a row. For 2015–16, the deficit is forecast to be $5.7 billion, which is $2.8 billion lower than projected in the 2015 Budget. The government is projecting a deficit of $4.3 billion in 2016–17, and balanced budgets in 2017–18 and 2018–19. A key indication of fiscal sustainability is the Province’s management of its debt. Net debt-to-GDP is expected to peak at 39.6 per cent in 2015–16, remain level in 2016–17 and begin to decline in 2017–18.

Conclusion

People from all corners of the world choose Ontario, knowing it is a great place to live, work and raise a family. We have a strong, diversified economy that is creating good jobs and will provide retirement security. Our current strong economic performance shows that our plan is working. We will continue to focus on our number-one priority — creating economic growth and more jobs. The people of Ontario are looking past economic cycles, election cycles, and even life cycles to do what is right for our children and grandchildren. These are not easy choices but they are the right ones — an economic plan that is creating jobs for today and tomorrow.

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The Honourable Charles Sousa
Minister of Finance