Ontario Minister of Finance Peter Bethlenfalvy has placed capital spending at the top of the government’s list of priorities, highlighting new and recently announced infrastructure spending in unveiling Budget 2024, titled Building a Better Ontario.
The record $214.5-billion budget also contained an additional $100 million for the government’s Skills Development Fund Training Stream as well as other new spending on the government’s Skilled Trades Strategy.
Deficit to balloon
For 2023–24, the government is projecting a deficit of $3 billion, ballooning to $9.8 billion in 2024–25 and $4.6 billion in 2025–26, before reaching a surplus of $0.5 billion in 2026–27, one year later than was projected in November’s fiscal update.
“The higher deficits, compared to what we projected last year, will be time-limited while the return on investment will be felt for decades,” Bethlenfalvy told the Ontario legislature during his budget speech March 26.
“Our public finances are not immune to economic uncertainty.”
The finance minister said the Doug Ford government will accelerate the government’s Plan to Build, valued at $190 billion over the next 10 years with spending on highways, transit, homes, high-speed Internet and other critical infrastructure. A total of $26.2 billion will be spent on infrastructure projects in the next year.
The plan builds on major infrastructure spending initiatives announced last week. On March 21 the government unveiled a pledge to allocate $1.8 billion to housing-enabling infrastructure funding, including $1 billion for the new Municipal Housing Infrastructure Program and $625 million more for the Housing-Enabling Water Systems Fund, bringing its total funding to $825 million.
The water systems fund had just been announced in January.
$200M for new community infrastructure
There was also a pledge for a new $200 million Community Sport and Recreation Infrastructure Fund to support new and upgraded sport, recreation and community facilities.
Commented Bethlenfalvy, “As we invest in key public services and infrastructure, including new roads, highways and the largest public transit expansion in North America, we refuse to offload the costs onto hardworking Ontario families or municipalities at a time when they’re counting on us to keep costs down.”
Other new allocations included an additional $100 million for the Invest Ontario Fund, boosting it to $600 million to help Invest Ontario attract investments in such sectors as advanced manufacturing, life sciences and technology; and $15 million in new funds over three years for the Critical Minerals Innovation Fund, to be spent on research and development.
Ontario’s real GDP grew by an estimated 1.2 per cent in 2023 and is projected to increase by 0.3 per cent in 2024, 1.9 per cent in 2025, 2.2 per cent in 2026 and 2.2 per cent in 2027.
New spending on Skilled Trades
In addition to the boost to the Skills Development Fund Training Stream, the government pledged to spend an additional $16.5 million annually over the next three years through the Skilled Trades Strategy to support a variety of programs to attract more young people into the skilled trades.
Budget 2024 also offered an update on plans to set up Ontario’s new infrastructure bank, announced in the November Ontario Economic Outlook and Fiscal Review.
The bank’s initial $3-billion allocation is called the Building Ontario Fund and is intended to attract capital for new infrastructure projects.
The government said the fund is “exploring opportunities to support large-scale projects in the postsecondary student housing, long-term care, energy generation and municipal infrastructure sectors,” including “an Ontario-based postsecondary institution to help finance new student housing projects.”
During his speech Bethlenfalvy suggested MPPs “take a tour” of the province with a roadmap “and maybe stick pins in the projects getting built.”
Projects identified included the Banwell Road and E.C. Row Expressway Interchange in Windsor; a new interchange at Highway 416 and Barnsdale Road in Ottawa; the new Highway 7 from Kitchener to Guelph; connecting Highway 401 to Lauzon Parkway in Windsor; and Highway 413.
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