Published on: 24/04/2015

On April 23, the Ontario Liberal Party introduced its provincial Budget for 2015. The budget was interesting in that it does not propose any new personal or corporate tax increases, while at the same time does not contain any major spending cuts on government programs. In advance of the Budget being released, it was commonly believed that there would be tax increases; however the government has clearly signalled that it believes it can eliminate the deficit (projected at $8.5 billion for the coming year) by 2017-18 through provincial growth initiatives and spending restraint. The Budget has forecasted economic growth at 2.7% for the year.

Total program spending in the Budget was $131.9 billion with many projected increases in program spending significantly reduced (i.e. annual increases to health and education spending were limited to 1.9% and 2% respectively) or eliminated. This was true for almost every Budget sector except infrastructure, which actually saw increases in funding. During his speech in the Legislature, Finance Minister Charles Sousa stated "For a long time now, we have not been building fast enough to keep up with our needs. Government after government has delayed investing in infrastructure. We can't afford any more delays." He went on to further state that now is the time "…to undertake the biggest infrastructure build in Ontario's history."

Highlights of some of the key infrastructure and related commitments are included below:

• Given the increases in infrastructure funding, the Government will look to enhance the reliability of asset management planning by moving towards a common standardization program for evaluating and prioritizing needed investments at the regional and municipal levels. The Government will be consulting with regional and municipal governments, as well as the private sector, on how to develop this process design using economic, social, and environmental metrics to measure need.

o OSWCA has been advocating for the need for a standardized process for several years, given the economic, social, and environmental benefits of investing in sewer and watermain infrastructure. This process will help to prioritize needed core infrastructure over recreational infrastructure investments.

• The Budget has allocated $11.9 billion in 2015-16 for investments in water systems, roads, bridges, public transit, hospitals and schools, though individual allocations to each sector are not broken down (outside of transit/transportation funding).

• Transit and Transportation Infrastructure funding received an additional $2.6 billion in funding commitments over ten-years, bringing the commitment to $31.5 billion due to the higher-than-expected-value sale of Hydro One and other government assets;

o The already announced $16 billion plans for transit in the Greater Toronto and Hamilton Area (GTHA) are moving forward under this funding, while the plans for the $15 billion for the remainder of the province are still being developed but will include the Ontario Community Infrastructure Fund, southern and northern highway projects, expanded access to natural gas, and infrastructure investments for the Ring of Fire.

• The Ontario Municipal Partnership Fund has been set at $505 million in 2016, focussed on small infrastructure rehabilitation, particularly in rural and Northern Ontario municipalities. This funding is combined with the continued provincial uploading of social program costs (Ontario Works benefits; court security and prisoner transportation; Ontario Drug Benefit; Ontario Disability Support Program admin costs), with the expectation that money saved in this uploading will be dedicated to infrastructure repair and rehab.

• Dedicated funding for infrastructure will continue to be an item the government presses forward on, including: 7.5 cents of the existing Gas Tax; repurposing revenues for the existing HST on gas and diesel; and, revenue from closing tax loopholes that currently allow large corporations from claiming small business deductions.

• Language around the registration requirements for road building machines has softened, noting that “The government is currently reviewing potential registration and licensing requirements to be imposed on some of these vehicles, developing a registration process and meeting with various stakeholders to receive input on this measure.â€Â￾

o A hard target date for implementing this process was expected to be announced in this Budget, but no firm date was committed to. Consultations are ongoing.

Analysis

Expanding provincial investment in infrastructure development and rehabilitation amidst cuts to other program spending increases is a welcome change in the provincial budgeting process. The Health and Education portfolios typically hold the primary focus of government and its spending priorities; however Premier Wynne seems to be adopting the role of “Transit and Infrastructure Premier.â€Â￾

Historically, infrastructure is one of the first portfolios to see cuts in a budget process that seeks out spending restraint; however the government appears to understand that cuts to this portfolio are no longer a viable option. The full budget can be found by clicking on the following link.

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