Ontario's pre-election budget update

 Ontario's Finance Minister, my former colleague Peter Bethlenfalvy, tabled the Province's customary Fall economic statement and budget update today. With a Provincial election coming in June 2022, there were widespread expectations that the update would include tax cuts for individuals and corporations, one promise from the last election that the Ford government has not yet delivered. As it turned out, the budget update was largely a rehash of the last full budget, which was tabled in March. Perhaps Ford and Bethlenfalvy are holding back the tax cuts for a real pre-election giveaway in the Spring.

The statement repeats promises to build a couple of new highways on the outskirts of Toronto, a vote-rich area that the Tories need to rely on to deliver them an electoral majority. There is some additional funding for the health care sector, including long-term care.  The Province is also preparing to scale back its COVID-specific funding, which will fall from more than C$ 10 billion this fiscal year to $3.4 billion in 2022-23 and zero the year after that. 

The one intriguing statistic in the report, and the one that may offer the Tories two distinct choices as they seek to win next year's vote, is the deficit projection. The shortfall for the current fiscal year (to March 2022) is now set at $21.5 billion, down from the $33 billion projected in the March budget. This is attributed in large measure to a rebound in tax revenues as the Provincial economy has recovered from the pandemic.

Come election time, the Tories can spin this as evidence that they are good economic managers and offer the voters more of the same if they are re-elected: this would certainly be the old-school Tory approach. Or they can say that their success in getting the deficit under control gives them room to introduce targeted tax cuts, bribing the electorate with its own money in the time-honoured way. The fact is, it's not a bad choice to have, if you're Doug Ford. He may not have been a great Premier for the Province, but come June the opposition parties might find it very hard to dislodge him.