2024 Ontario fall economic statement: Deficit cut to $6.6B, few new initiatives

As the Ford government aims to advance an agenda centred around building Ontario infrastructure and jobs, officials have unveiled few new initiatives beyond what was previously announced in the 2024 budget as they slash the projected deficit by more than $3 billion.

In the 2024 Ontario fall economic statement unveiled at Queen’s Park Wednesday afternoon, the government is currently set to run a $6.6-billion deficit for the 2024-2025 budget year as it’s on track to spend more than $218 billion.

The current forecast deficit is down from $9.8 billion forecast in the 2024 Ontario budget unveiled in March, which is attributed to increased government revenues as well as an improved economic forecast due to population and job growth, lower interest rates and inflation in recent months.

The Ontario government projected a nearly $7-billion increase in revenue compared to when it tabled the budget at the end of the March due to increases in personal income, sales and corporation taxes.

With speculation growing about a potential early election call ahead of the fixed date in mid-2026, officials say they’re set to cut the deficit to $1.5 billion in 2025-2026 while keeping a separate $1.5 billion in reserves before a projected $900 million surplus in 2026-2027.

“I’m putting forward the most credible plan based on the information that we have, putting that plan out to the people of Ontario,” Finance Minister Peter Bethlenfalvy told reporters Wednesday afternoon.

“We’re putting more money back in the pockets of Ontarians when they need it most, and keeping taxes and fees low for families and businesses. At the same time, we are building roads and highways, building transit, building hospitals and building schools.”

While many initiatives continue from previous budgets and announcements, the fall economic statement, which acts as a mini-budget, included a few new measures:

• $100 million over two years for mainly small, rural and northern municipalities (it’s unclear how the funding will be divided)
• $100 million to Invest Ontario program to assist with “attracting major investments” to the province
• $17 million over three years to create 100 new “active living centres” for seniors

Bethlenfalvy and Premier Doug Ford already announced two main affordability items from the fiscal update: a continuation of a temporary cut to the gas tax until June, and a $3-billion plan to send $200 cheques to every Ontario taxpayer.

In the lead-up to the fall economic statement, opposition critics suggested the cheques set to be mailed early next year are timed to arrive ahead of a possible spring election.

Meanwhile, the provincial government is still on track to spend more than $191 billion on infrastructure over the next 10 years with more than $97 billion of that total on transit ($68.1 billion), highways ($27.8 billion) and other transportation-related projects. Hospitals are the second-biggest sector to see infrastructure spending with a projected

The fall economic statement also discussed feasibility studies related to the Ford government’s contemplation of building a lengthy tunnel under Highway 401.

However, the financial blueprint didn’t contain specific details on how much is being spent or how much has been allocated to study the concept of building a tunnel, or other major projects like Highway 413.

When it comes to housing, it barely was mentioned in Bethlenfalvy’s speech in the legislature Wednesday afternoon. The financial blueprint lowered projections for how many new homes will get built in Ontario, raising doubts on whether it can reach its goal of building 1.5 million homes by 2031.

The province has not met its annual target yet, but it came close last year after it started counting new long-term care beds. The Ontario government reported 81,300 housing starts to date this year versus the original goal of 125,000.

After the fall economic statement was tabled in the legislature, Ontario’s opposition parties slammed it shortly after and politicians who spoke said a potential election sooner rather than later might be a factor in some of the announcements seen this year.

“[It] is a reminder that life in Ontario after more than six years of this conservative government has gotten more expensive and not better. The government has failed to deliver on the basics,” Ontario NDP leader Marit Stiles said, adding her priority for funding would be on housing, schools and other affordability measures.

“Instead of making the right choices to guide Ontario towards a better future, all we got were more distractions.”

Ontario Liberal Party leader Bonnie Crombie said Ford “failed once again to do his job” by running deficits and adding to the provincial debt.

“His priorities are not your priorities because Doug Ford and his conservatives are not in it for the people of Ontario,” she charged.

“Our priorities would be to invest that $7 billion (of extra revenue) into health care, into education, into building homes. We don’t share the same priorities as the government.”

Green Party of Ontario leader Mike Schreiner said the fall economic statement doesn’t address the needs of residents.

“(It) abandons so many people,” he said.

“Young people leaving the province because they can’t afford to buy a home, full-time workers who can’t pay the rent in the communities they work in, people experiencing homelessness at an unprecedented level, the 2.5 million Ontarians looking for a family doctor are the people being cared for in hallways in our hospitals, the people who come to me living in legislated poverty on ODSP, the people whose homes and basements were flooded this summer because the government fails to invest in the infrastructure to protect us from climate-fueled weather events.”

With files from The Canadian Press