Ontario Budget: May 2004
The
Plan for Change:
Focusing on Health and Education
As expected, the McGuinty government's first Budget placed a heavy emphasis on education and health. Titled The Plan for Change, the Budget delivered by Finance Minister Greg Sorbara was also designed to signal a significant departure from those of the previous Harris and Eves governments.
The McGuinty government was elected last fall promising to reinvest in public services, hold the line on tax increases and not run deficits. However, upon taking office the province was already in a deficit position, a fact confirmed by former Provincial Auditor Erik Peters who calculated the deficit at $5.6 billion. Simply put, keeping all the promises was not possible.
The Plan for Change is a balancing act of competing election commitments - offering a combination of strategic service renewal initiatives, targeted tax increases, and comes in with a $2.3 billion deficit in 2004-2005.
Overall, the Budget
projects robust growth in provincial revenues to $78.4 billion in 2004-2005,
an increase of 14.8% or $10.1 billion over last year. Spending will also
increase, rising 6.9% to $79.6 billion, and $1 billion is set aside as
a reserve.
Social Services and Programs
There is a modest, and long overdue, 3% increase in social assistance basic needs and maximum shelter allowances for Ontario Works and Ontario Disability Support Program recipients.
The federal National Child Benefit Supplement increase, scheduled for July 1st, will not be clawed back from social assistance recipients.
$25 million will be spent this year to expand community-based supports for children and youth mental health programs, increasing to $38 million by 2007-2008.
A 3% increase in funding for agencies providing prevention and early intervention services for children and families, as well as for agencies operating women's emergency shelters and hostels.
The property tax credit for seniors will be increased by $125 or 25%, at a cost of $85 million.
Healthcare
Overall healthcare spending will increase by $2.16 billion in 2004-2005, including:
- $406 million for long term care facilities that will open 3,760 new beds in 2004-2005
- $108 million increase this year for more nurses and doctors and to purchase 12,000 bed lifts
- $470 million for hospitals
- $97 million for wait time registries and e-health initiatives
- $182 million for homecare and mental health services.
In addition the province will assume 75% of the cost of public health, up from 50%, public health spending will increase by $273 million in 2004-2005.
Children's immunizations programs will be expanded to include chickenpox, meningococcus, and pneumococcus at a cost of $156 million.
The number of positions available for international medical graduates will be increased from 90 to 200. And the number of education spaces for nurse practitioners will be doubled from 75 to 150 by 2005-2006.
Community Health Centres will get an additional $14 million to enhance and expand services.
Chiropractic services will no longer be covered by OHIP. And, Physiotherapy will only be covered for people in long-term care facilities or homecare. Routine eye examinations will only be covered for seniors or people under 20.
Education
The province committed to increasing school board funding $2.1 billion by 2007-2008. Grants for Student Needs will increase by $450 million, and school boards will get an additional $400 million of stabilization funding in 2004-2005. 1,000 additional teacher training positions will be offered in 2004-2005 at a cost of $15 million.
Community organizations providing school-based children's breakfast programs will get an additional $4 million.
Additional funding will be provided to post-secondary institutions to assist them in coping with increased enrolment pending a comprehensive review aimed at creating a sustainable funding framework.
An additional $133 million will be spent in 2004-2005 to enhance literacy by creating a literacy and numeracy secretariat, training 4,000 new teaching specialists, and doubling the number of "turnaround teams" to assist under performing schools.
A series of initiatives aimed at lowering the dropout rate and promoting continued training will be established as part of the "learning to 18" strategy. These include; technology programs, and a scholarship program aimed at encouraging dropouts to return to school or enter apprenticeships.
Other Initiatives
Municipalities will receive a share of the gas tax for public transit. This funding to municipalities will be phased in staring October 2004 with one cent per litre. The funding will increase to 1.5 cents in October 2005, and then to 2 cents in October 2006.
The Budget indicates $85 million will be devoted to affordable housing. However, the bulk of the dollars will come from the federal government, and only $18 million from the province, of which $13.4 will be new funding.
As part of the federal
Provincial Framework on Early Learning and Child Care 4,000 new subsidized
child care spaces will be created in 2004-2005. The actual funding for
this initiative comes almost exclusively from federal transfers.
The big news is the
introduction of new OHIP premiums that will be collected through
the income tax system starting July 1, 2004. It will generate $1.64 billion
in 2004-2005, and double that amount in subsequent years.
Premiums will be based on a sliding income scale and phased in over two years:
- a person making
between $36,000 and $48,000 will pay $225 in 2004-2005 and $450 thereafter.
- people with income of less than $20,000 are exempt from the premiums.
Taxes on tobacco products will increase, pushing up the cost of a carton of cigarettes by $2.50, and fines for those convicted of selling to people under age or unauthorized distribution will be increased.
Effective June 21,
2004 taxes on beer, wine and spirits rise. Fees for driver's license,
and various court processes also increase.
Budget Documents Link
http://www.ontariobudget.fin.gov.on.ca/
Source: United Ways of Ontario's Government Relations Bulletin - Special Issue dd May 18, 2004
Other news ...
Consultation
Launched on Rental Housing
Legislation to Curb Sixty-Hour Work Week
New Provincial Rent Bank and Energy Emergency Fund
Legislation to Allow Family Medical Leave
Report Finds Domestic Homicides Predictable and Preventable
Minimum Wage Workers and Low-paid Worker Mobility
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Page last updated May 19, 2004