2010 Ontario Budget Summary (March 25, 2010)
Jobs and Growth
Investing in Knowledge and Skills
- 20,000 new student spaces in colleges and universities, starting in 2010–11, through a new annual investment of $310 million.
- More than 1,000,000 Ontarians receive skills training and employment assistance annually.
- Full-day learning for four- and five-year-olds begins in September 2010, benefiting up to 35,000 children in nearly 600 schools.
Helping Job Creation and Economic Growth in Northern Ontario
- $150 million a year, on average, over three years for a new Northern Industrial Electricity Rate Program.
- $45 million over three years for a new skills training program to help Aboriginal Peoples and northern Ontarians benefit from developing economic opportunities such as the Ring of Fire. This Budget also announces a Ring of Fire Coordinator to work with all parties to advance the area’s economic promise.
- A proposed permanent Northern Ontario Energy Credit of up to $130 for single people and up to $200 for families (including single parents) annually, to help northern Ontario residents with the higher energy costs they face.
Job Opportunities through the Green Economy
- 50,000 jobs over three years through the Green Energy Act, 2009.
- A new water strategy to protect Ontario’s water resources and promote jobs in the water sector.
Short-Term Infrastructure Investments
- Record investment over 2009–10 and 2010–11 for roads, bridges, transit, energy retrofits and other infrastructure, creating and preserving more than 300,000 jobs.
Ontario’s Tax Plan for Jobs and Growth
- Helps create nearly 600,000 net new jobs within 10 years.
- Personal Income Tax cuts for 93 per cent of income tax payers.
- Enhanced sales tax credits and property tax credits for low- to middle-income families and individuals, starting in 2010.
- Corporate Income Tax cuts, including reducing the small business income tax rate from 5.5 per cent to 4.5 per cent on July 1, 2010.
- Over $4.2 billion in Sales Tax Transition Benefits to help Ontarians adjust to the Harmonized Sales Tax.
Advancing the Poverty Reduction Agenda
- Target to reduce child poverty by 25 per cent over five years, which would move 90,000 children out of poverty by 2013.
- $63.5 million in annual child care funding to replace discontinued federal funding, keeping approximately 8,500 Ontario children in child care.
- Increase adult basic-needs allowances and maximum shelter allowances by one per cent for people on Ontario Disability Support Program and Ontario Works. This would provide an additional $20 million to families and individuals in 2010–11.
- Ontario’s minimum wage will rise to $10.25 per hour on March 31, 2010.
- Personal income tax cuts will result in 90,000 lower-income taxpayers no longer paying Ontario personal income tax, starting in 2010.
- Number of employment standards officers increased to expand protection for some of the province’s most vulnerable workers.
Managing Responsibly
- The 2009–10 deficit is $21.3 billion, down from the $24.7 billion projected in the Fall 2009 Ontario Economic Outlook and Fiscal Review.
- The government has a realistic and responsible plan to cut the deficit in half in five years and eliminate it in eight years.
- To address the current fiscal challenge, while protecting public services, the government proposes to:
- Extend the freeze on MPP pay from one year to three years.
- Freeze the compensation structures of non-bargained political and Legislative Assembly staff for two years.
- Freeze the compensation structures for the Broader Public Sector and the Ontario Public Service for all non-bargained employees for two years.
- Respect all current collective agreements. However, the fiscal plan provides no funding for incremental compensation increases for any future collective agreements.
- Work with transfer partners and bargaining agents, as agreements are renegotiated, to seek agreements of at least two years’ duration. These agreements should help manage spending pressures, protect public services that Ontarians rely on and provide no net increase in compensation.
- The government is also:
- Phasing construction of a number of major long-term capital projects.
- Proposing to reform Ontario’s drug system to keep drugs affordable and permit savings from the program to be reinvested in health care.
- Modernizing government services to improve customer service and efficiency.
- Freezing internal operating expenses at or below 2010–11 levels.
- Launching a comprehensive expenditure management review process.
Ontario’s Economic Outlook and Fiscal
Ontario’s Economy
- Government-projected 2010 real GDP growth — 2.7 per cent.
- Projected 2010 real GDP growth, private-sector average — 3.0 per cent.
- Government and private-sector average projected 2011 real GDP growth — 3.2 per cent.
- Net new jobs since May 2009 — 91,700.
- Net new jobs since October 2003 — 331,700.
- Projected net new jobs in 2010–13 — 504,000.
Ontario’s Finances
- 2009–10 interim deficit — $21.3 billion, down from $24.7 billion forecast in the Fall 2009 Ontario Economic Outlook and Fiscal Review.
- 2010–11 deficit projection — $19.7 billion, down from $21.1 billion forecast in the Fall 2009 Ontario Economic Outlook and Fiscal Review.
- The government has a responsible plan to cut the deficit in half in five years and eliminate it in eight years.
Improved Transparency in Financial Reporting
- Starting with this Budget, changes have been made in how certain revenues and expenses are presented, in order to improve the transparency of financial reporting. These changes do not affect the province’s annual surplus or deficit result, the accumulated deficit or the underlying levels of revenue and expense.
Tax and Pension Systems for Ontario's Future
Ontario’s Tax Plan for Jobs and Growth
- Within 10 years, helps create nearly 600,000 net new jobs, attract $47 billion in business investment and increase annual incomes by up to 8.8 per cent.
- Over three years, delivers $11.8 billion in tax relief to people, including cutting income tax for 93 per cent of income tax payers.
- Eliminates Ontario income tax for 90,000 lower-income tax filers.
- Provides the lowest provincial tax rate in Canada on the first $37,106 of taxable income.
- Supports low- to middle-income families and individuals by enhancing sales tax credits and property tax credits.
- Delivers $4.2 billion in transition payments to help Ontarians adjust to the Harmonized Sales Tax.
- Cuts corporate income taxes for large and small businesses.
Modernizing Pensions and the Retirement Income System
- Bill 236, the Pension Benefits Amendment Act, 2010 — the most significant pension reform package introduced in Ontario in more than 20 years — was introduced in December 2009.
- The government will continue its consultative pension reform process in 2010, building on recommendations from the Report of the Expert Commission on Pensions and feedback from stakeholders.
- As part of the national review of the retirement income system, the government will continue to consult on how the retirement income system could be improved for tomorrow’s seniors.
Borrowing and Debt Management
- The total funding requirement for 2009–10 has declined by $6 billion since the Fall 2009 Ontario Economic Outlook and Fiscal Review, due primarily to the $3.4 billion decline in the projected deficit.
- Long-term public borrowing is forecast at $39.7 billion for 2010–11, down $4.1 billion from $43.8 billion for 2009–10.
- Interest on debt expense is $476 million lower than forecast in the Fall 2009 Ontario Economic Outlook and Fiscal Review, reflecting lower-than-forecast interest rates, more financing at shorter-term maturities and a lower deficit.
- Total debt is projected to be $212.4 billion as at March 31, 2010.
- Net debt is projected to be $193.2 billion as at March 31, 2010.
- In 2009–10, Canada’s and Ontario’s net debt-to-GDP ratios were well below those of G7 countries.
- Ontario’s net debt-to-GDP level was near the median for Canadian provinces in 2008–09, the most recent year for which data are available.
- For 2010–11, the impact of a one per cent increase in interest rates would be an estimated additional $480 million in interest cost for the Province.
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