Ontario Budget Highlights for OMSSA Members


March 24, 2021

Ontario's Minister of Finance Peter Bethlenfalvy delivered the Province's 2021-22 Ontario Budget today, covering the March 2021 to March 2022 fiscal period. The budget lays out a plan to protect health, expanding on the emergency response and vaccination efforts. It also starts the transition towards economic recovery and painting a vision towards a post-pandemic future. 
 
The theme of the 2021 Ontario Budget is “Protecting People's Health and Our Economy.”  It includes $16.3 billion in allocations on health-related themes, and $23.3 billion related to economic recovery initiatives. The Province will also be spending $11.3 billion on improving cash flow for people and businesses, for a total of $51 billion over four years in pandemic supports.

Protecting People’s Health


Support for Vaccination Efforts and Hospitals

Health was a key priority, receiving the most funding in the 2021-22 budget, including more than $1 billion to support the Ontario vaccination plan and $2.3 billion for testing and contract tracing. An additional $1.4 billion has been allocated for Personal Protective Equipment (PPE). The budget also included $1.8 billion in new funding for hospitals, which will be allocated to provide care for COVID patients, address surgical backlogs, bringing the total to support hospitals to $5.1 billion since the onset of the pandemic.
 
$30.2B will be provided over 10 years for hospital capital projects, including a new inpatient wing at William Osler Health System's Peel Memorial and a new regional hospital in Windsor-Essex, along with new children's treatment centres in Ottawa and Chatham-Kent. Existing hospitals will also be modernized and expanded across the province. $3 billion in funding has been provided since the 2020 budget.
 
Announced prior to the budget, $3.7 million will be allocated to provide safe, accessible transportation for persons with disabilities and older adults with limited mobility to their COVID‑19 vaccination. appointments.
 
$50 million has been allocated to support First Nations and Urban Indigenous communities with their vaccine rollout, and another $50 million will be targeted to those living in "racially diverse, newcomer and low-income" communities for vaccines.
 
The Ontario government has also renewed calls to increase the federal health transfers from 28% to 35%. This would cost the federal government $28 billion  per year, with $10 billion allocated annually to Ontario. This new revenue would help Ontario address its aging population and provide additional revenues limiting the need for future tax hikes or cuts to services. The federal government has shown openness to discussing transfers with the provinces but has not made a firm commitment at this time.

Support for Long-Term Care 

The Province will invest an additional $933 million over four years to build 30,000 new long-term care beds. This results in a total of $2.6 billion spent on long-term care since March 2020. An additional $650 million will be spent this fiscal year on protecting long-term care homes from COVID-19, bringing the total to $2 billion. 

$4.9B over four years will be spent to increase average direct daily care to four hours per day in long-term care, by hiring 27,000 new personal support workers (PSWs) and nurses. This was announced prior to the budget, and has long been requested by the sector. Incentives will also be provided to PSWs and nurses to work in retirement homes, with financial grants of $5,000 for PSWs for a six‑month commitment and $10,000 for nurses for a one‑year commitment.

Support for Mental Health and Addictions

$175M will be allocated in 2021-22 towards mental health and addictions supports. This is part of the 10-year $3.8 billion mental health plan. This funding is targeted to the Centre of Excellence with the remainder of the funding rolled out in the years to come.
 
Four new mental health clinics will be created in remote, rural and underserved communities. $8.4 million over three years will provide support to the Ontario Provincial Police (OPP) and $7 million will be invested to support students in post-secondary institutions, for a total of $15 million to date.

Support for Vulnerable People

The provincial government will provide $2.1 million over three years to support survivors of domestic violence, human trafficking and victims of crime. This is in addition to existing funding and programs. 

$1.6 million over two years will be allocated to the Anti-Racism and Anti-Hate Grant program to support community based anti-racism initiatives focusing on anti-Black, anti-Indigenous racism, anti-Semitism and Islamophobia. This is in addition to the $60 million investment in the Black Youth Action Program.

To help seniors stay in their homes longer, Ontario has introduced the Seniors’ Home Safety Tax Credit for 2021. This new credit will provide an estimated $30 million in support for about 27,000 seniors and people who live with senior relatives.

Protecting Our Economy


Early Years and Child Care

The budget includes new direct funding to parents for early years and child care costs and to support women returning to the work force. Women have been disproportionally affected in terms of unemployment and addressing this issue was a priority in the Minister’s speech.  
 
A third round of payments totalling $1.8 billion since March 2020 will go out this year. Payments will be doubled from 2020 levels to $400 per child and $500 for children with special needs. The government is also increasing the CARE tax credit by 20% for 2021, increasing support from $1,250 to $1,500 on average. This provides $75 million in additional supports for 300,000 families. Budget allocations show a modest increase for the Ministry of Education in the years between 2021-22 and 2023-24. A similar modest increase is projected for children and social services (MCCSS) from 2021-22 to 2023-24.
 
OMSSA will dig into the budget details and speak with the Ministry of Education about administrative and cost-sharing related issues for service managers, as this was not specifically highlighted in the budget.
 
The Province will spend $14 billion in capital grants over 10 years to build more schools, upgrade existing facilities across Ontario and support education‑related projects. Hopefully some of this funding can be directed to increasing early years and child care capacity.

Employment, Training and Skills Development

The provincial government is proposing a new Ontario Jobs Training Tax Credit to provide up to $2,000 per recipient to cover 50% of eligible expenses for training and skills development. This will cost $260 million and support 230,000 people in 2021.
 
The Ontario government is investing an additional $614.3 million during 2020–21 and 2021–22 for employment and training supports, including $117.3 million to assist those who are facing the highest rates of unemployment during the pandemic such as women, racialized individuals, Indigenous peoples, youth and people with disabilities.

Broadband

Ontario is investing $2.8 billion in broadband expansion, for a total of $4 billion invested over six years beginning in 2019-20.

Support for Communities

"To support Ontario’s 444 municipalities, the province’s key partners in the fight against COVID‑19, the government is providing almost $1 billion in additional financial relief in 2021 to help preserve vital public services and support economic recovery. This builds on the $4 billion in federal–provincial support provided to communities across the province under the historic Safe Restart Agreement. Ontario joins municipalities in our continued calls for the federal government to step up and provide, at minimum, a matching amount of federal funding to these important new provincial investments."

 
Announced last week, support for people experiencing homelessness will continue to be provided. $255 million in new funding for the Social Services Relief Fund has been allocated to respond to rising COVID‑19 cases in shelter settings to service managers. This builds on the $510 million already provided through the Social Services Relief Fund, as well as other investments in the Transitional Housing Support Program and the Adult Protective Service Worker program.
 
$50M will be available in grants for faith-based and cultural organizations. The Province will double investments in the Indigenous Community Capital Grants Program and provide an additional $1 million to support hard‑hit Francophone non‑profit organizations through the COVID‑19 Relief Fund for Francophone Non‑Profit Organizations.
 
Additional support through the Regional Opportunities Investment Tax Credit will be offered to support Northern and rural communities outside of Ottawa and the GTA with economic development.  $61 million will be spent this year, bringing the total support up to $155 million by 2022-23.
 
Ontario is also spending $500 million on the Ontario Onwards Acceleration Fund to modernize and digitize government with a people-centred focus. Efforts will also be made to save money going paperless and reducing procurement costs through bulk purchases.

Support for Transit

The Ontario government will spend $21 billion over 10 years to expand and repair highways and bridges across the province. $61.6 billion over 10 years has been allocated to public transit including four subway projects in the GTA, the Hamilton LRT and GO Transit. Passenger train service was also mentioned in the Ontario budget connecting Toronto, North Bay, Timmins and Cochrane.

Support for Jobs, Targeted Sectors and Small Business

Ontario is providing a second round of Ontario Small Business Support Grant payments to eligible recipients. Approximately 120,000 small businesses will automatically benefit from an additional $1.7 billion in relief through this second round of support in the form of grants of a minimum of $10,000 and up to $20,000.  This brings the total cost in support for small businesses to $3.4 billion. Junior mining, tourism, hospital, culture, sport, electric vehicles and green sectors of the economy have also received targeted supports in the 2021-22 provincial budget. The Province will also explore green bonds.

Economic Projections and Deficit

The Ontario government is projecting 4.0% GDP growth in 2021, 4.3% in 2022, 2.5% in 2023 and 2.0% in 2024 in its budget assumptions. It is relying on economic growth and one-time funding costs being eliminated over time to reduce its deficit without tax increases or cuts to services. Contingencies have also been planned for economic growth that both exceeds or falls below these assumptions. There are also cautions about unexpected changes such as a third wave and other uncertainties resulting from the pandemic. 
 
The Ontario deficit will be $38.5B for 2020-21. The government projects steadily declining deficits of $33.1 billion in 2021–22, $27.7B in 2022–23 and $20.2 billion in 2023–24. The government has seen an increase in debt-to-GDP ratio, but will cap spending at 50.5% as a fiscal anchor. Ontario’s net debt will reach $440 billion this year. The government has no plans to balance the provincial budget until 2029-30.
 
The current Ontario unemployment rate is 9.2% down from a high of 13.5% in May of 2020. 829,400 jobs have returned or been created since June of 2020, but employment participation is down 4.1% from February 2020 levels.  

OMSSA’s Continued Support for Members:

This report is a first look at the 2021-22 Ontario provincial budget. OMSSA will continue to review the details, meet with other municipal associations and connect our members with relevant Ministries to ensure service managers are fully aware of the contents and impact on their operations in human services.

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