The Ford government is now projecting a $6.6-billion deficit this year — including the $3 billion it’s planning to spend sending $200 cheques to almost every Ontarian.
Still, the new deficit projection is $3.2 billion lower than the government forecast in the spring, thanks to a tax windfall that comes from the federal government’s capital gains tax change — which is expected to add $3.3 billion to the province’s bottom line over three years, beginning this year — and the impact of inflation and stronger-than-forecast economic growth.
The "rebate" cheques will be mailed in early 2025 to all adult Ontarians who have filed their 2023 income tax returns and who are not bankrupt or incarcerated in 2024, and families will receive $200 per child under the age of 18.
“I’m under no illusions that this will relieve all of the affordability pressures facing Ontario families, but it will help,” said Finance Minister Peter Bethlenfalvy in his speech to the legislature. “It’s real support. And — most importantly — it allows the people of Ontario to choose how this money can best help them.”
However, the cheques were roundly criticized by economists and public policy experts who spoke with The Trillium.
"With the province running a deficit, they're not giving taxpayer money back: they're drawing on borrowed money and increasing Ontario's debt-servicing costs, to the detriment of other budget items,” said Brett House, an economics professor at Columbia Business School, a fellow with Canada’s Public Policy Forum and a senior fellow with the University of Toronto’s Munk School.
Nor are the cheques “targeted in a way that would maximize their impact on household spending and economic growth,” he said.
Next year, the government is forecasting a $1.5-billion deficit, followed by a surplus of $0.9 billion in 2026-27.
At a press conference, reporters pressed Bethlenfalvy on whether he was hoping to set up the government for a balanced budget in the spring as a set-up for an early election call.
He didn’t rule out the possibility but denied that was his government’s plan and said that unforeseen events could throw that projection off-track.
“Would I like to beat those numbers? Absolutely? I mean, what finance minister wouldn't want to beat their numbers,” he said.
The government forecasts slow economic growth this year, with real GDP rising by 0.9 per cent — an improvement over the 0.3 per cent the province was forecasting in the spring budget.
Real GDP is expected to rise to 1.7 per cent in 2025 and 2.3 per cent in both 2026 and 2027 — but the province notes these are “prudent” forecasts and slightly below those of private-sector economists.
The fall economic statement includes alternate fiscal projections based on stronger- or slower-than-projected growth, which would result in vastly different fiscal outlooks in the coming years, ranging from an $11.4-billion surplus in 2026-27 if the economy is strong to an $8.3-billion deficit that year if it’s weak.
In his speech, Bethlenfalvy boasted of the province’s debt-to-GDP ratio of 37.8 per cent — down from the forecasted 39.2 per cent in the budget — as “the best level it’s been in a decade.”
The finance minister also highlighted the province’s efforts to boost manufacturing jobs in Ontario, asking MPPs to call out to him whether something is “good” or “bad.”
“Let’s start with a simple one, under the Liberals — 300,000 manufacturing jobs were lost in the province. Red tape held back investment, energy costs soared and fees and taxes on businesses were high,” he said.
“Tell me, is that good or bad?”
“Now let’s compare — our government has saved businesses almost $8 billion, and cut red tape. We’ve attracted $44 billion in auto and EV-related investments over the past four years that will help create over 14,000 jobs. How about that? Is that good or bad?” he continued.
While the government has been spending on boosting manufacturing jobs, Statistics Canada has found that manufacturing employment has remained essentially flat since the government took power in 2018.
The province announced it’s adding another $100 million to the Invest Ontario Fund, bringing its total to $700 million, and credits it for creating 4,012 jobs.
Overall, the government projects to increase spending by 5.6 per cent from 2023-24, more than doubling this year’s projected 2.5 per cent inflation rate.
However, base spending on the government’s biggest file, health, is projected to be essentially flat.
Despite spending an extra $1 billion “to address pressures related to compensation and growing demands,” overall Ministry of Health spending is down slightly from last year. The change is due to a lack of “extraordinary costs” from personal protective equipment purchases in the previous two years, the mini-budget states.
Amid significant changes to the number of international students higher education institutions can accept, Ontario projects a base funding cut for colleges and universities of $1.1 billion, from $11.9 billion in 2023-24 to $10.8 billion this fiscal year.
True to the economic statement's “building Ontario” theme, infrastructure funding has jumped from $2.7 billion last year to $4.8 billion. Base funding is up, and the largest line item in the ministry is now high-speed internet. There is still no breakdown of costs for the government’s various highway projects.
This year, the government’s electricity cost relief programs are expected to total $7.3 billion, up from $6 billion last year.
After a $900-million top-up, the government will maintain a $1.7-billion contingency fund “to support greater flexibility in the fiscal plan to help protect against unforeseen changes and mitigate expense risks.”
The fund has been criticized by watchdogs and opposition parties as a way to avoid telling taxpayers exactly what the government is spending their money on.
It’s separate from Ontario’s $1-billion “reserve,” which serves a similar purpose, per the government: “to protect the fiscal plan against unforeseen adverse changes in Ontario’s revenue and expense.”
Opposition leaders said the government was playing a “shell game” with Ontarians’ money.
“They do it with the contingency fund. They transfer the money over. They say, ‘Oh, lookit, we're very strong fiscal managers,” NDP finance critic Catherine Fife said.
Opposition parties cast the economic statement as a missed opportunity to help Ontarians struggling with affordability. Sensitive to the potential for an early election, leaders made sure to frame themselves as problem-solvers.
“When I'm premier, my government is going to take care of the basics — building homes, hiring doctors, fixing schools and making life more affordable,” NDP Leader Marit Stiles said, arguing Ontarians are tired of the Ford government’s “gimmicks.”
“They wanna know, where are the homes? Where are the homes we were promised? Because we can't find any,” she said. “The only thing that gets built in Ontario are encampments under Doug Ford.”
Liberal Leader Bonnie Crombie focused on the deficit and spending, pushing her message that Ford’s friends are benefitting while Ontarians are being left behind.
“Doug Ford is more focused on billion-dollar giveaways to his cronies than he is on fixing health care and helping you and your family get ahead,” she said, pointing to the Ontario Place deal, early alcohol liberalization and the Greenbelt scandal.
Green Leader Mike Schreiner had a similar message of Ford prioritizing those who don’t need help over those who do — including young people who can’t afford housing, homeless people, and those on welfare programs living in “legislated poverty.”
“This fall economic statement fails to invest in the people of Ontario,” he said. “It abandons them and instead sends $200 cheques to millionaires and billionaires who don't need it.”
This story has been updated to include additional information and comments from politicians at Queen’s Park.
