The Hon. Peter Bethlenfalvy, Minister of Finance for Ontario, presented the government’s 2023 budget, with the theme “Creating a Strong Ontario.” This is the Provincial Government’s second budget, but it should be seen as their first real fiscal strategy and, in many ways, the first budget specifically targeted after the pandemic. The budget has a strong emphasis on “fiscal discipline” and aims to rein in programme spending now that the worst of the pandemic is over.

The budget adopts a hybrid strategy, allocating additional funds for healthcare and addressing labour shortages, while also assisting businesses through the creation of a new Ontario-made manufacturing investment tax credit and targeted assistance in high-priority sectors like the production of EV batteries, essential minerals, and “green steel.” Large contingency funds are also allocated in the budget for the economy’s current state of uncertainty.

By 2024–2025, the government promises to have a balanced budget (three years earlier than previously forecast). This budget is the greatest fiscal plan in Ontario’s history with $204.7 billion allocated.

Housing:

The budget highlights the commitment of the government to enhancing housing accessibility and affordability in Ontario. The More Homes Built Faster Act, 2022—a bill that streamlined the planning and approval processes to accelerate homebuilding in the province and ultimately reduce costs—and the province’s 2022 Housing Supply Action Plan are the main highlights of this year’s budget, which also refers to the policies introduced in last year’s budget. The cost of constructing a single-family home is expected to drop by $116,900 as a result of these adjustments, helping more Ontarians in their quest to own a home.

• In order to address the growing housing affordability crisis, the Ontario government is also using Budget 2023 as an opportunity to ask the federal government to postpone the Harmonized Sales Tax (HST) on any new large-scale purpose-built rental housing projects. The government is in favour of this policy because it thinks it will encourage the development of more rental housing units, which will boost employment growth, economic development, and provincial expansion.

Workers, Small Business & Taxation:

The government has undertaken a series of programmes under the tagline “Working for Workers” (some initiatives were introduced in the lead-up to the budget) to alleviate labour shortages, improve skill development, and produce the workforce required for the building of major infrastructure projects:

• $224 million in 2023–24 (as announced on March 21, 2023) for a new capital stream of the Skills Development Fund to leverage private-sector expertise and expand training centres, including union training halls to train more workers for careers in the skilled trades and other in-demand jobs.
• Additional investment in $75 million more over the next three years to support new and existing centres to prepare workers for careers like electricians, welders and mechanics.
• $25 million in additional funding to enhance the Ontario Immigrant Nominee Program with an additional $25 million over three years to attract more skilled workers, including in-demand professionals in the skilled trades to the province.
• $15 million in additional funding over the next three years for Better Jobs Ontario which helps eligible applicants cover expenses including child care and tuition.
• $3 million in 2023–24 to expand the Ontario Bridge Training Program to help internationally trained immigrants find employment in their fields and get faster access to training towards a license or certificate.
• $3.5 million in additional funding over three years to continue to support the Abilities Centre in Whitby to provide employment supports and programs to help people with disabilities participate in the workforce.

Infrastructure & Transportation:

The provincial capital plan remains a key component of the government’s goals for the economy of Ontario. The total amount invested in the capital plan over the next ten years is $184.4 billion (an increase of $25.6 billion from the budget for 2022), of which $20.6 billion (an increase of $0.6 billion from 2022-2023) will be used in 2023–2024. This breakdown of the 10-year capital plan shows:

• $27.9 billion over 10 years for highway planning, construction, expansion and rehabilitation. There are more than 600 expansion and rehabilitation projects that are either underway or planned over the next four years (with a heavy focus on Highway 413 and the Bradford Bypass).
• $70.5 billion over 10 years for transit projects and planning.
• More than $48 billion over 10 years to hospital infrastructure, including over $32 billion in hospital capital grants.
• $22 billion over 10 years for education and postsecondary education, including about $15 billion in capital grants over the next 10 years.
• $2.6 billion over 10 years to social infrastructure.

The government also emphasised initiatives to speed up project execution and reduce project delays, including:

• Using a variety of delivery models and procurement strategies that enable collaboration with builders on project requirements, design and pricing.
• Separating the scope of large complex projects into smaller projects so that more bids can be generated.
• Continuing to use modular builds and promoting design standardization.
• Leveraging new technology, such as digital twins (virtual representations of physical assets, systems or networks), that improve infrastructure planning and enable data-driven decision-making.
• $139.5 million for three new trainsets that will bring back passenger rail service between Timmins and Toronto. An investment that will not only work to unlock the economic potential of Northern industries, resources and minerals, but will also support tourism in the region by connecting the North and the South.

Healthcare:

Significant healthcare spending is included in the budget for 2023 in order to fix the overburdened system, reduce surgical wait times, and keep funding for huge infrastructure projects.

Key highlights include:

• Starting in the fall, expanding the program allowing local pharmacists to prescribe medication for more common ailments
• $48 billion to support 50 hospital projects that would add 3,000 new beds over 10 years to increase access to reliable, quality care.
• $72 million in 2023–24 to make more surgeries available at community surgical and diagnostic centres to connect people to care faster.
• $569 million in the 2023-24 fiscal year as part of the $1 billion announced in the 2022 Budget spent towards contract rate increases to stabilize the home and community care workforce.
• $60 million over two years to expand existing teams and create up to 18 new primary care teams in communities with the greatest need.
• $15 million to keep 100 mid‐to‐late career nurses in the workforce.
• $4.3 million to help at least 50 internationally trained physicians get licensed in Ontario

Our Analysis:

The 2023 Budget is in many ways a strategy to stay the course, with a number of brand-new initiatives and considerable contingency money to assist better navigate an uncertain future. One way to see the new initiatives, such as the Ontario Made Manufacturing Investment Tax Credit, is as corrective measures to keep Ontario on its expansionary course. There should be more success stories as a result of the increased investment tax credit. The Ford government has made it clear that they would do everything it takes to increase investment and job growth in Ontario.

Our province is just as, if not more so susceptible to the global inflation and instability that are affecting economies worldwide. The concerns about affordability remain the primary concerns for voters. Whenever we have faced such challenges, Ontarians have sought financial assistance or other policies from their governments to support the recovery of the economy and help those struggling to cope with the increasing cost of living. The government may be in a position to achieve these goals as the projected deficit is expected to be only a quarter of what was forecasted in the 2022 Budget.