Published on: 13/06/2014

On Thursday evening the Liberal Party won a fourth-straight mandate in the Ontario general election, the first under the leadership of Premier Kathleen Wynne. More importantly, the Liberal Party captured a majority government mandate, taking 59 out of a possible 107 seats (55% of the seats) in the legislature. At dissolution in the legislature, the Liberals held only a minority mandate, with 48 seats, while the PC Party held 37 and the NDP 21, with one seat vacant.

With a majority mandate in hand, the Liberal Party is now able to pass the Budget that was previously introduced in May without being forced to water down or appease either of the other two Parties. Wynne announced that she plans to ask the Lieutenant-Governor to recall the legislature within the next three weeks to see this happen, which also means a new Cabinet will be named and sworn in at some point over the next two-and-a-half weeks.

After seeing 10 incumbent MPPs defeated and failing to pick up any new seats in the election, PC Party leader Tim Hudak announced his resignation from the Party leadership, pending the election of a replacement.

Budget 2014

In terms of what was in the Liberal Budget, a reminder of some of the items of interest have been included below:

On Infrastructure: $130 billion in projected infrastructure spending over the next 10-years, including the creation of two new (previously announced) infrastructure funds.

1. The Greater Toronto and Hamilton Area (GTHA) fund, with up to $15 billion for investment in transit over 10-years, including $1.7 billion in 2014-15; and

2. The rest-of-Ontario fund, with up to $14 billion for investment in roads, bridges, transit, and other critical infrastructure over 10-years, including $1.6 billion in 2014-15.

In order to appropriately allocate this funding, the Ministry of Infrastructure will utilize the latest census data to spend based on population.

Budget 2014 also seeks to repurpose and dedicate a portion of both the provincial fuel tax and HST specifically to transit and transportation infrastructure. On the fuel tax, the new dedication will go over and above the existing amount dedicated to municipal infrastructure development, without increasing the current rate of 14.7 cents per litre on gasoline and 14.3 cents per litre on diesel; though it will include a limited repeal of the Fuel Tax exemption to some road building machinery (details pending).

A number of other future revenue tools were noted in the Budget that would be dedicated to infrastructure development, including: revenue from High-Occupancy Toll Lanes; the registering and plating of certain pieces of road building machinery that are presently exempt (i.e. mobile cranes, concrete pump trucks, hyrdovacs, etc.) by 2016; and, Green Bonds.

On Municipal Infrastructure Investment: The Budget allocated $2.1 billion in support to municipal infrastructure development, with $1.5 billion of this amount coming through the provincial uploading of municipal social programming costs, with the expectation that the municipality would then spend the saved amount on necessary construction. In order to facilitate this, the government is also continuing its support for the $200 million Municipal Infrastructure Strategy, which aims to help small- and medium-sized municipalities prepare asset management plans to identify required infrastructure upgrades.

On Alternative Finance and Procurement (AFP) Projects: The Budget continues to support the use of AFP projects, promoting the “on-time, on-budgetâ€Â￾ advertising line, by noting that a recent study of 30 AFP projects found that 29 came in under budget and 28 were completed ahead of schedule. It also notes that future AFP projects will require the hiring of apprentices, not making the distinction that not all construction projects require apprenticeable trades.

On the Ontario Retirement Pension Plan (ORPP): The Budget introduces the creation of the ORPP beginning in 2017. The initial plan calls a mandatory contribution of 3.8% of salary (half contributed by the employer and half by employee), with the ultimate aim being to replace approximately 15% of an individual’s earnings by the time they retire (based on 40 years of contribution). Contribution to this fund would max out at $6400 per year for those earning $90,000 or more.

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