This afternoon, the Hon. Peter Bethlenfalvy, Minister of Finance, delivered Ontario’s 2023 Budget. While many of the budget’s initiatives have been previously announced, there are some new items of note. Here are the highlights:
Capital Investments
- The government plans to invest more than $184 billion over the next 10 years in public infrastructure. This includes $70.5 billion for transit; $27.9 billion for highways; $48 billion for hospital infrastructure; $15 billion in capital grants for schools and childcare spaces; and, $4 billion for broadband.
- The Ontario Highways Program includes more than 600 expansion and rehabilitation projects that are either underway or planned over the next four years.
- In 2023–24, Ontario is investing $3.2 billion towards projects to expand and repair provincial highways and bridges.
- In 2023, the government will provide approximately $400 million through the Ontario Community Infrastructure Fund for municipal roads, bridges, water, and wastewater projects.
Project Delivery
- The government stated that it is mitigating schedule delays for projects, including:
- Using a variety of delivery models and innovative procurement strategies “to make it easier to collaborate with builders on project requirements, design and pricing”;
- Separating the scope of large complex projects into smaller contracts;
- Using modular builds and promoting design standardization; and,
- Working with municipalities to enable faster approvals.
- The government is looking to use technology, such as “digital twins”, to improve infrastructure planning, delivery, and operations.
- The government also wants to better use available traffic and transportation-related information.
Manufacturing, Mining and Energy
- The government is proposing to launch the new Ontario Made Manufacturing Investment Tax Credit, which would provide a 10% refundable Corporate Income Tax credit.
- The government is working with municipalities and utilities on engineering designs and infrastructure upgrades for potential mega-sites that can support large manufacturing investments.
- The government is investing an additional $3 million in 2023 – 24 and $3 million in 2024 – 25 in the Ontario Junior Exploration Program, which helps junior mining companies finance early exploration projects.
- The government intends to launch a voluntary clean energy credit registry.
- This tool is intended to help businesses meet their environmental and sustainability goals by demonstrating that their electricity has been sourced from clean resources.
Conservation
- In 2023-24, the government will invest an additional $14 million in the Greenlands Conservation Partnership, which helps secure new, privately owned natural areas, and ensure they are protected and managed.
- The government has committed $9.5 million over the next three years to improve soil data mapping and soil evaluation and monitoring, and to support key commitments under its Agricultural Soil Health and Conservation Strategy.
- The government is exploring the creation of a new provincial protected area in the Township of Uxbridge.
Fiscal Outlook
- The government now forecasts that it will balance the budget in 2024–25, three years earlier than previously forecast.
- It is projecting a deficit of $2.2 billion in 2022-23, a deficit of $1.3 billion in 2023 – 24, and surpluses of $0.2 billion in 2024 – 25 and $4.4 billion in 2025 – 26.
- Some of the other key changes to the fiscal outlook (as compared to the 2022 Budget) include:
- Weaker real and nominal GDP growth between 2023 and 2024, but stronger in 2025;
- Slower growth in nominal household consumption over the forecast period;
- Stronger employment growth in 2022, followed by slower growth in 2023 and 2024; and,
- Weaker home resale market in 2023, followed by a strong rebound in 2024.
- Moreover, CPI inflation is now projected to be 3.6% in 2023 and moderate to 2.1% in 2024 before converging to the Bank of Canada’s target rate of 2.0% in 2025 and 2026.
Tax Measures
- The government is looking to expand the number of small businesses that qualify for the preferential small business corporate tax rate of 3.2%.
- The phase-out range would be extended from between $10 million and $15 million of taxable capital to between $10 million and $50 million of taxable capital.
- This change would mirror the corresponding federal measure and apply to taxation years that begin on or after April 7, 2022.
- The government announced that it will be reviewing the province’s tax system.
- The review will also focus on modernized administration tools.
To read the full budget, please visit: https://budget.ontario.ca/2023/index.html.
Should you have any questions, please contact do not hesitate to contact Doug DeRabbie, Director, Government and Stakeholder Relations, at dderabbie@acecontario.ca.