The Government of Ontario plans to spend $17 billion over the next year as part of its response plan to the current global pandemic. The economic and fiscal update outlines a deficit of $20.5 billion in 2020-21.
“During this global pandemic, I want the people of Ontario to be focused on their health, not worrying about losing their job.”
The provincial government brought forth the plan on Wednesday when it was originally scheduled to present its budget for 2020. Last week, the government decided to revised the economic outlook given the current economic volatility seen around the world due to COVID-19.
The update, entitled Ontario’s Action Plan: Responding to COVID-19, outlines measures that the province has already announced and also provides further detail and capital. Ontario is committing $7 billion for the health care system and support for people and jobs, as well as $10 billion for individuals and businesses through tax and other deferrals.
“My number one priority right now is ensuring that our front-line health care professionals have the resources they need to fight the COVID-19 outbreak,” said Ontario Minister of Finance Rod Phillips. “These additional resources will enhance hospital capacity, protect our loved ones in long-term care, and support our public health officials’ work to flatten the curve and slow the spread.”
Along with billions of dollars to support health care capacity issues, screening, and care, Ontario is promising $3.7 billion to support people and jobs, which includes around $2 billion in targeted supports, and $290 million in tax measures. These measures include:
- Approximately $5.6 billion for electricity cost relief programs in 2020-21, for eligible residential, farm, and small business consumers.
- Cutting taxes by $355 million for about 57,000 employers through a proposed temporary increase to the Employer Health Tax (EHT) exemption.
- Setting electricity prices for residential, farm, and small business time-of-use customers at the lowest rate, known as the off-peak price, 24 hours a day for 45 days.
- A proposed new Corporate Income Tax Credit, the Regional Opportunities Investment Tax Credit.
Ontario’s plan also includes $10 billion through tax deferrals, for both individuals and businesses. These measures include:
- Five months of interest and penalty relief for businesses to file and make payments for the majority of provincially administered taxes, making available $6 billion.
- Allowing employers to defer Workplace Safety and Insurance Board (WSIB) payments for up to six months, making available $1.9 billion.
BetaKit has highlighted the measures that are most likely to affect Ontario businesses. The full list of measures can be found here.
“During this global pandemic, I want the people of Ontario to be focused on their health, not worrying about losing their job or how to make ends meet as they deal with unexpected additional expenses,” Phillips said. “We are helping make life a little more manageable for every person in Ontario, while providing additional support to those who need it the most.”
Ontario noted that as a result of the response to the COVID-19 outbreak, the government is planning for a deficit of $20.5 billion in the coming fiscal year, with $2.5 billion in reserve, which the government stated was the provinces’ largest reserve in history.
The province plans to provide regular updates on its fiscal and economic outlook throughout the year, with a multi-year provincial budget set for November 15, 2020. “This responsible approach will allow the government to continue assessing the economic situation and put forward a long-term outlook based on the most recent and reliable data,” the government stated.
Image source office of the Premier of Ontario via Flickr