The Honourable Rod Phillips, Minister of Finance has released the 2020 Provincial Budget. It provides a three-year fiscal outlook for Ontario and this comes after being delayed by the emergence of the COVID-19 pandemic this Spring.\u00a0 The budget touches on several economic scenarios related to the speed of economic growth but does not articulate a path forward toward a balanced budget. This will be provided in the 2021 Spring budget.<\/p>\n
Below are the immediate highlights of new items in the 2020 Provincial Budget of a municipal interest. Within the budget document, the word “municipal” is found over 140 times reflecting a great deal of focus and priority placed toward Ontario\u2019s municipal sector.<\/p>\n
These items are wide-ranging and provided at a high level. The expectation is that a more detailed Budget Bill will follow shortly.<\/p>\n
Fiscal Outlook<\/strong><\/p>\n COVID-19 has impacted the global economy and Ontario has felt the impact. Provincial GDP declined by 12.3 per cent in the second quarter of this year.\u00a0 Despite some economic improvement of late, the economy is expected to contract by 6.5 per cent in 2020. The volatility created by the pandemic will result in a ranging economic growth projection for 2021 with it expected to narrow in 2022.\u00a0 Finally, the provincial debt-to-GDP ratio is projected to hit 50 per cent within two years.<\/p>\n Minister Phillips has outlined Ontario’s 2020 Budget<\/a> as the next phase of Ontario’s Action Plan. Through three main pillars of Protect, Support<\/em>, and Recover<\/em> the government is making $45 billion ($30 billion already announced) in commitments over the next three years to manage the pandemic, focus on addressing the COVID-19 challenges and economic difficulties, and support key investments to deliver on an economic recovery.<\/p>\n Budget Impacts to Municipal Governments:<\/strong><\/p>\n Business Education Tax<\/strong><\/p>\n The government is lowering the Business Education Tax rates in recognition of this long-standing municipal concern. These rates will be lowered 0.88 % (10 basis points lower than 0.98%) and the Province is expected to adjust payments to school board to off-set reductions in education property taxes.\u00a0 The Province expects this to produce $450 million in savings for 2021.<\/p>\n Property Tax Relief for Small Business<\/strong><\/p>\n Municipalities will be provided flexibility to target property tax relief for small businesses with a provincial commitment to consider matching these reductions. Through a new optional property subclass for business properties, municipalities will be able to define this for their own local needs.<\/p>\n Addressing Speculative Sales<\/strong><\/p>\n Addressing speculative sales amendments to the Assessment Act<\/em> are being introduced to allow for the potential creation of optional new assessment tools to address concerns regarding redevelopment and speculative sales. This reflects an earlier private member\u2019s bill (i.e. Bill 179) put forward by MPP Robin Martin.<\/p>\n Broadband and Infrastructure<\/strong><\/p>\n The Budget confirmed recent announcements on broadband and cellular<\/a> as well as infrastructure<\/a> investments. Yesterday, the government announced an additional $680 million to support broadband and cellular connectivity for unserved and underserved communities, including a doubling of the ICON program to $300 million. Also noted was the recent COVID-19 Resiliency Stream of the Investing in Canada Infrastructure Program, which makes $250 million of provincial and federal funding available to municipalities with no local cost match required.<\/p>\n Long-Term Care<\/strong><\/p>\n The Budget announced previous commitments made which included the increase of daily direct care<\/a> for long-term residents to four hours a day over a four-year period. It also reiterated the Province\u2019s commitment to the Accelerated Build Pilot Program<\/a> made in July 2020.<\/p>\n These investments build on supports announced as part of the first phase of Ontario\u2019s response to COVID-19, and the investments made to protect vulnerable seniors through the COVID-19 Fall Preparedness Plan<\/a>.<\/p>\n Stormwater Investments<\/strong><\/p>\n New investments in stormwater systems include:<\/p>\n\n
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