After 15 years of the previous government's mismanagement, Ontario's Government for the People has kept its promises, and continues to take action to restore trust, transparency and accountability in Ontario's finances, while making life more affordable for individuals, families and businesses.
Minister of Finance Vic Fedeli released the 2018 Ontario Economic Outlook and Fiscal Review, outlining the government's plan to help people make ends meet — and get ahead — while making government more efficient.
Ontario is now projecting a 2018-19 deficit of $14.5 billion — that's already $0.5 billion less than the $15 billion deficit inherited from the previous government as reported by the Independent Financial Commission of Inquiry just 11 weeks ago.
The government is aggressively pursuing every opportunity to find new efficiencies and savings. The Province has saved $3.2 billion, or about two per cent, in program expenses by reducing spending — while not reducing front-line services. It has done so while giving individuals, families and businesses important tax relief, by not proceeding with the previous government's $308 million in planned tax increases, and cancelling the cap-and-trade carbon tax in order to strengthen Ontario's economy. These measures would keep almost $2.7 billion in the pockets of people and businesses.
"The magnitude of our fiscal challenge is real. It will require difficult decisions as we work to get Ontario's finances back on track," said Minister Fedeli. "This government believes balancing the budget and reducing Ontario's debt burden is not only a fiscal imperative, it is a moral one. The previous government spent well beyond its means, creating a structural deficit that is unsustainable. Doing nothing is not an option — we need to spend smarter and reinvent government."
Keeping the government's promises means doing better for the people of Ontario. That's why the Province is proposing one of the most generous Ontario tax cuts for low-income workers in a generation. The vast majority of low-income workers would pay no Ontario Personal Income Tax at all. The Low-income Individuals and Families Tax (LIFT) Credit would benefit 1.1 million people across the province. It would provide low-income and minimum wage workers up to $850 in Ontario Personal Income Tax relief and couples up to $1,700.
The government is making it easier to do business in Ontario by proposing to repeal much of the job-killing Fair Workplaces, Better Jobs Act, 2017 (Bill 148) and to keep the minimum wage at $14 per hour. This would reduce employer costs by $1.4 billion in 2019. Ontario is also taking steps to cut red tape by 25 per cent by 2022. In addition, the Province proposes to reverse the previous government's announced changes to Ontario's small business deduction that would have raised taxes by up to $40,000 per year for about 7,900 companies, and increase the amount of payroll that is exempt from the Employer Health Tax for eligible Ontario employers.
The Province inherited $347 billion in public debt from the previous government. That's over $24,000 for every man, woman and child — and the debt continues to grow every minute of every day. Interest on debt is the Province's fourth largest expense item after health care, education and social services. It is costing the province more than $1.4 million an hour, or every person in the province almost $900 a year.
"Ontario's plan is modest, pragmatic and reasonable — recognizing that the Province has a spending problem, not a revenue problem," said Minister Fedeli. "The plan does not raise taxes, makes life more affordable for people, and safeguards vital public services and programs they rely on every day. A government that puts its fiscal house in order is a government that is truly working for the people."