April 2024
On March 27, Finance Minister Peter Bethlenfalvy delivered the 2024 Ontario Budget. The main takeaway is the change in the fiscal position of the province from the projections made in the Fall Economic Statement. The province will run a $9.8 billion deficit, up from $3 billion last year. Lower economic growth, higher interest rates paid on Ontario debt, and implications resulting from Bill 124 (wage restraint efforts) being found unconstitutional were the main reasons for the change. The province will also take in less tax revenue than initially projected. The provincial government plans to return to balance ahead of the 2026 election. The province projects it will collect $204.3 billion in revenue for the upcoming fiscal year.
In the budget speech, the Minister highlighted a budget designed to avoid raising taxes, making cuts or downloading on municipalities. However, with a rate of inflation expected just below 3 per cent, the rate of new spending over the next two years will be reduced. MCCSS will only see a $200 million increase from $19.9 billion in total spending, representing a 1 per cent increase over two years. Total health spending on programs for homelessness will only grow 1 per cent per year over the next two years and housing dollars could be reduced in the event the federal government withholds funding due to Ontario missing its housing targets. This does not leave much fiscal room for high ticket items such as social assistance rate increases, new money to support CWELCC implementation, new investments in supportive or community housing or a significant increase in spending to address the growing crisis in homelessness. As we delve deeper into program delivery funding, allocations, and funding formulas in the upcoming years, we may uncover significant details.
In terms of budget highlights, $1 billion for municipalities to support housing infrastructure and an additional $625 million to support water systems was the big ticket item for municipalities. It should be noted that Bill 23 resulted in a loss of revenues for municipalities on development charges with the new funding designed to replace some of this lost revenue. There were also measures to incentivize rental construction by allowing municipalities to offer a reduced property tax rate for rentals. All Ontario municipalities will be given the ability to charge a tax on vacant homes. $152 million in new money was allocated to supportive housing and there was a $396 million increase for mental health and addiction support.
Unfortunately, the budget did not make any commitment to working with municipalities on a social and economic prosperity review as requested by all municipal associations in their pre-budget submissions. OMSSA will continue to work with our Members, the province and our stakeholder partners advancing our advocacy work and ensuring the voice of our Members is heard by the provincial and federal government.
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Darryl Wolk is Manager of Policy Development and Public Affairs for the Ontario Municipal Social Services Association. Darryl started with OMSSA in 2017. He has over ten years of government relations experience and graduated with an MBA from the University of Windsor in 2004. Darryl appreciates the opportunity to advocate and consult with Ontario’s municipal service managers, province and federal government to advance priority issues in the health and human services sectors.
Blog categories: Ontario Government, Budget, Housing and Homelessness, Child Care