Ontario’s 2022 Budget: Setting the Stage for an Election

Doug Ford and the Ontario PC Party fired the final salvo of their four-year government earlier today with the tabling of their 2022 budget, and have set the stage for June’s general election.

Finance Minister Peter Bethlenfalvy’s 268-page budget will serve as the de facto platform for the Ontario Progressive Conservatives. Over the last weeks, the Ford government has been rolling out hundreds of millions of dollars in new and voter-friendly spending as it makes the case for re-election.

Ford is positioning himself as the “guy who says yes” on key priorities around transit, infrastructure, healthcare and highways. Over the last couple of weeks, Ontario PC advertising has rolled out the slogan “Get It Done” while trying to juxtapose NDP Leader Andrea Horwath and Liberal Leader Steven Del Duca as intransigents who say “no” to the big things Ford is trying to achieve.

The campaign will officially begin imminently, but with the NDP releasing a platform earlier this week, today’s budget, plus advertising from all sides, we are already in the early days of the battle.

After two years of pandemic governance, today’s budget attempts to put COVID-19 in the rear-view mirror and focus attention on Doug Ford’s re-election pitch to Ontarians: that his party is the only party prepared to lead Ontario’s recovery while looking out for ordinary people.

Ford Government Strategy

The Ford Government is casting itself as the party looking out for the working class. A tax reduction for individuals earning less than $50,000 and the previously announced temporary cut to the provincial gas tax reflect Ford’s desire to help “the little guy.” This approach, combined with progress on key infrastructure priorities as well as attracting large-scale investments in Ontario’s auto manufacturing sector, is an attempt to protect against areas the Ford government is weak and differentiate Ford from his opponents on things like transit and highway infrastructure.

Budget Highlights

The PC’s plan is focused around five themes: Keeping Costs Down, Working for Workers, Building Highways and Key Infrastructure, Rebuilding Ontario’s Economy, and a Plan to Stay Open. Each theme explains the main policies Ford will bank on to lead him to a second majority mandate.

Keeping Costs Down

• Enhancing the Low- Income Individuals and Families (LIFT) tax credit for people earning less than $50,000
• Cutting the gas tax by 5.7 cents per litre and fuel tax by 5.3 cents per litre for 6 months, starting July 1, 2022
• Removing Tolls on Highway 412 and Highway 418

Working for Workers

• An additional $114.4M over three years towards the Skilled Trades Strategy
• $268.5M over three years to Employment Ontario to strengthen skills and training programs
• $15.1M over three years to the Ontario Immigrant Nominee Program to attract more skilled workers to Ontario
• Raising the minimum wage to $15.50 an hour, starting on October 1, 2022

Here the Ford government tries to solidify its position as the party representing the working class. Although the personal income tax cut falls short of the tax cut Ford promised during the last election, it is a direct appeal to the individuals and families struggling the most following a period of economic instability and amid a rising cost of living. This approach – strengthened by an increase to minimum wage and an attempt to stabilize housing prices by increasing the non-resident speculation tax – is core to the Ford brand and markedly different from conservative campaigns of the past. Although both the Liberals and the NDP propose a higher increase to minimum wage, it will be difficult for opposition parties to wedge Ford on policies traditionally championed by left-leaning parties.

Building Highways and Key Infrastructure

• Funding for early works and property acquisitions along Highway 401, signalling future expansion
• $25.1B over ten years for highway expansion and rehabilitation projects including the QEW Garden City Skyway, two bridges over Grand River, and widening Highway 17
• Expanding GO service to Bowmanville and reducing travel times for London GO service
• Planning and design work to connect the Eglington Crosstown West Extension to Pearson

This pillar is central to the PC’s campaign slogan, “Get it Done.” In addition to touting its existing $28.5 billion transit infrastructure program in Toronto, the construction of Highway 413 and the Bradford Bypass, and a $4 billion investment in broadband infrastructure, the Ford government commits to billions of dollars in new transit and infrastructure investments. By highlighting future infrastructure investment, complemented by progress already made on major projects like the Ontario Line, voters are more likely to have confidence in Ford’s ability to deliver on his promises. This is likely to resonate with voters across Ontario as the budget is careful to callout projects spanning the entire province.

Rebuilding Ontario’s Economy

• Community Jobs Initiative to bring jobs at provincial agencies to communities across Ontario.
• Releasing a Critical Minerals Strategy and a Low-Carbon Hydrogen Strategy
• Launching a consultation in Fall 2022 to support Phase 3 of the Natural Gas Expansion Program
• Attracting over $12B in auto sector investments and committing $91M to make electric vehicle chargers more accessible
• Extending the temporary enhancement to the Regional Opportunities Investment Tax Credit to the end of 2023

For the government to deliver on its above priorities, it needs to demonstrate strong stewardship of the Ontario economy. Here Ford highlights his plan for future economic growth thanks to a Critical Minerals Strategy and proven results to-date from multi-billion dollar investments in the auto sector. Despite billions of dollars of new spending included in the budget’s fiscal plan, the government is projecting economic growth to fuel an increase to provincial revenues that could result in a balanced budget by 2027-2028, or by 2024-25 under a more ambitious growth scenario.

A Plan to Stay Open

• Investing $764M over a two-year period to retain nurses and investing $142 to recruit and retain healthcare workers
• Investing $230M to enhance healthcare capacity, including for critical care in hospitals
• Investing $2.8B over three years to make PSW/DSW wage enhancement permanent

Although announced by President of the Treasury Board Prabmeet Sarkaria last month, the government repackaged its Plan to Stay Open in the budget. With measures to address staffing shortages, healthcare capacity, and the availability of PPE, Ford is attempting to demonstrate to the electorate that his government has learned from the pandemic and is taking action to address some of the major issues COVID-19 highlighted. The Ford government’s pandemic record is sure to be a major discussion point over the course of the campaign.

Opposition Reaction

Not surprisingly, both NDP Leader Horwath and Liberal Leader Del Duca noted their opposition to today’s budget. While the NDP and Liberals have come out strongly against the budget, it will be interesting to see how both parties differentiate against a PC budget that isn’t light on government spending.

New Democrats

The NDP countered the budget by releasing a video on social media accusing Ford of cutting billions of dollars from healthcare, seniors care, and education, with a plan to cut $2.7 billion more. The NDP will likely continue this line of attack throughout the campaign, positioning themselves as the only party willing to make the investments needed to support families and get the province back on track.

Liberals

In a release, Liberal Leader Steven Del Duca stated that the budget lacks in ambition and that it did not present any new ideas to improve schools or provide better care for seniors. Unsurprisingly, Del Duca attacked Ford on the government’s cuts to public education. Del Duca also took the opportunity to announce that tomorrow the Ontario Liberals will release four new tax changes that are “smart and fair.” The full release of their platform is expected soon.

What comes next?

The election is set to officially begin on May 4. The NDP released their platform earlier this week, and the Liberals are expected to release theirs imminently. Doug Ford’s record, particularly on pandemic management, will be heavily scrutinized. Daily media events from each party leader will compete for the attention of media and, ultimately, the voters.

Andrea Horwath will ask Ontarians for their vote for the fourth time as leader of the NDP; Steven Del Duca is introducing himself as Liberal leader for the first time; and Doug Ford is vying for a second majority mandate after two years of a global pandemic. The race will be fierce, and it’s just getting started.