Budget 2022: Now is the time to invest in public services—and Ontarians

In the 2018 election campaign, Ontario Progressive Conservative Leader Doug Ford faced criticism for a platform that was long on slogans but short on details. That won’t be the case in 2022: the PC platform will be Thursday’s budget, and like all budgets, it will be fully costed by Ministry of Finance staff.

But unlike most budgets, this one will not be debated or voted on by MPPs: Queen’s Park will shut down as soon as the budget is tabled. The budget debate will take place in public, on the campaign trail. Voters will render their verdict on June 2.

Compared to recent years, this is an easy time to write a budget. Buoyed by $145 billion in federal aid to Ontarians during the pandemic, provincial revenues are sharply up compared to last year’s projections. Two weeks ago, the independent Financial Accountability Office (FAO) estimated that Ontario’s budget deficit has already shrunk back to pre-COVID size and will be $1.7 billion in 2022-23, its lowest level in 14 years. Relative to the size of the economy, the provincial debt is shrinking; interest on the debt, as a share of revenue, is falling.

It’s enough to make a finance minister smile. This is a great time to invest in public services and support Ontarians.

Step one is to aim higher and spend more on public programs; on this front, no province does worse than Ontario. The premier himself says Ontario needs another $10 billion for health care. Two million students have just been through a two-year disruption at school and they need extra help to get back on track. Poverty rates, which fell in 2020 because of federal supports, have almost certainly snapped back to 2019 levels, when half a million children were growing up in poverty. And then there’s the climate emergency, which has not gone away just because we were busy with other things. For Ontario’s sake, we must do more.

Step two is to raise revenues. Inflated dollars and an economy that is bouncing back will put money into provincial coffers, but the reality is that Ontario is typically worst or second-worst among provinces when it comes to raising “own source” revenues. To fund programs to an average level compared to other provinces, we must bring revenues up to average levels as well.

Step three is to protect Ontarians from inflation. The government should target income transfers at those who have nothing to fall back on when prices rise.

There are many ways to do this: Hefty—and permanent—increases for those struggling to survive on Ontario Works and the Ontario Disability Support Program are desperately needed. Changing the rules at the Workplace Safety and Insurance Board to keep injured workers out of poverty is another important step. Increases to the Ontario Trillium Benefit would send targeted support to lower-income households. The government must scrap Bill 124, the 2019 law that makes it illegal for provincial public employees to even try to have their wages keep up with the cost of living. It should tighten rent controls, including on vacant units, so more of tenants’ income can go into basic needs and back into local economies. And if it is really serious about protecting Ontarians from inflation, the government should raise the minimum wage immediately and make it easier for workers to unionize.

Thursday’s budget may not do any of these things.

According to the FAO’s pre-budget projections, real program spending, per person, in 2022-23 will be down by 2% compared to its pre-pandemic level and will continue to fall in the years ahead. Flashy announcements in the budget of new spending on specific items are unlikely to change this underlying reality.

On the inflation front, the government has made no move to increase social assistance rates. Bill 124 remains in place. The minimum wage is stuck at $15 per hour until October.

Based on the government’s track record, it will cut taxes and fees of various kinds, which it has been doing steadily since 2018, and package the cuts as a response to inflation. Such cuts are poorly targeted—see licence plate fees, for example—and will direct precious public dollars away from public services toward high-income people and businesses who don’t need the money.

Whatever the budget contains, there will be a lot to talk about in this year’s budget debate, which will happen in every corner of Ontario between now and June 2. It should be quite the conversation.