Ontario budget 2013: Liberals spend nearly $1B to satisfy NDP, stay alive

Ontario Premier Kathkleen Wynne applauds as Finance Minister Charles Sousa tables the 2013 provincial budget at Queen's Park in Toronto on Thursday, May 2, 2013. (Nathan Denette / THE CANADIAN PRESS)

The Liberals unveiled a budget Thursday designed to keep their minority government in power, meeting many NDP demands but vowing to remain on target to eliminate the deficit by 2017-18.

Nearly $1 billion will be spent over the next five years to meet NDP demands in an effort to secure Leader Andrea Horwath’s support. Without it, the budget doesn’t pass, the government falls and Ontarians head to the polls.

The promises include:

The government will spend $127 billion this year, and the projected deficit for 2013-14 is $11.7 billion, about $1 billion less than projected in last year’s budget.

The Liberals also said they remain on track to eliminate the deficit by 2017-18, when they forecast a surplus of $500 million.

Finance Minister Charles Sousa said the budget meets many of the items on Horwath’s wish list, and expects her support.

“I would say this meets the requests the NDP have put forward, and we should be working together to get it passed,” Sousa told reporters in the budget lock-up.

Ontario Premier Kathleen Wynne denied suggestions that the budget was simply aiming to appease the NDP and avoid an election.

“There’s no doubt that we have met – and actually exceeded in many cases – the requests that (the NDP) put on the table,” she told CTV’s Power Play. “The reality is … this budget was crafted in order to meet the needs of the people of the province.”

“We got a lot of input and this budget speaks to helping people find jobs, creating jobs and helping them in their everyday lives. That’s what it’s about.”

As was previously announced, Ontario residents can look forward to an average 15 per cent reduction in auto insurance rates. And for drivers tired of sitting in gridlock, an as-yet unclear number of kilometres of high-occupancy vehicle lanes on provincial highways will be available to solo drivers willing to pay.

The budget was short on surprises, as the Liberals unveiled many of its key elements over the past few weeks in an effort to show Horwath they are serious about working with her, and keeping themselves in power.

However, Horwath would not tip her hand on whether the Liberals’ overtures have been successful in securing her support. Instead, she repeated comments she made Wednesday when she said she would first consult with voters before deciding what to do.

“Let’s face it. This government has a hard time actually doing right by the people of Ontario,” Horwath told CTV’s Power Play, “so we’re going to try to make them accountable and if we’re able to do that in a conversation with Ontarians, then we’re going to work on that.”

Horwath said the people of Ontario want to know that their tax dollars are “being respected” and they’re actually being spent on things that “make life better for them.”

“They’ve watched this Liberal government, time and time again, waste their money,” Horwath told CTV’s Power Play.

When asked how she could choose not to vote for a budget that meets so many of her demands, Horwath said, “I think it’s unfair to Ontarians to not pull them in to the discussion.”

Progressive Conservative Leader Tim Hudak said months ago that he had no intention of supporting the Liberals’ next budget.

Hudak maintained that line on Thursday, saying he wants the opportunity to show he can lead Ontario to greater economic prosperity.

”What it takes is a new plan, a new team, with the courage of its convictions to turn Ontario around,” Hudak said.

The Economy

The budget includes five planks for boosting economic growth in addition to the youth jobs strategy, which had been a key NDP demand, including measures for small businesses and the province’s struggling manufacturers.

The budget includes an increase in the Employer Health Tax exemption from $400,000 to $450,000 for small businesses while eliminating it entirely for large companies, and extends the capital cost allowance for machinery and equipment, which amounts to about $265 million over three years.

The Liberals will also continue the government’s push to open new markets for Ontario businesses, with some 60 trade missions planned over the next year.

The budget forecasts economic growth of 1.5 per cent in 2013, 2.3 per cent in 2014 and 2.4 per cent in both 2015 and 2016.

“We’re taking the right approach,” Sousa said. “Eliminating the deficit while protecting the services people rely on.”

Infrastructure

Next month, Metrolinx is expected to release a detailed report with costing options for its roads and transit plan to ease gridlock across the province. Last month, Premier Kathleen Wynne said the plan’s budget would have to be made up of new money, but has declined to say what new sources of revenue her government is looking at before the report is released.

On Wednesday, Sousa said current high-occupancy vehicle (HOV) lanes on highways could be opened up to solo drivers willing to pay a toll. The budget included few additional details except to say new HOV lanes are planned for Highways 401, 404, 410 and 427, to be built over the next 10 years.

The cost of building these lanes has yet to be determined, and revenue estimates range from $250 million to $300 million annually.

Sousa said if drivers want to pay for the privilege of driving in dedicated lanes, “all the better.”

But Horwath dismissed the toll proposal, saying it would create “Lexus lanes” in the province.

Within 25 years, some 450 kilometres of HOV lanes will be constructed, including on the QEW and the 403.

“Fair Society”

The budget also includes initiatives to build what Sousa called “a more fair society,” including a one per cent increase in spending on boosting access to home and community care. By 2015-16, that will mean an extra $700 million.

The move will deliver home care to 46,000 more Ontarians, and was a key ask from the NDP. But Horwath said Thursday the budget does not meet her demand for a five-day homecare guarantee.

And the Liberals will create an earnings exemption that will allow recipients of Ontario Works and the Ontario Disability Support Program to keep the first $200 in employment earnings before the government begins clawing back their benefits.

Those measures go beyond what Horwath had asked for, and she said she would work to ensure they get through.

“We put forward some proposals that we thought were prudent, that we thought were reasonable, that we thought were achievable, and that in fact were paid for,” Horwath said. “And if the government has chosen to do other things, that’s their prerogative. But we have to ensure that the things they say they are going to do get done.”