2015 Ontario Budget Highlights

04/23/2015

Today Finance Minister Charles Sousa delivered the 2015 Provincial Budget entitled, “Building Ontario Up.”

On the whole, the budget delivers only modest changes from last year’s plan.  Program spending for 2015-16 will be $131.9 billion with a deficit of $8.5 billion.  The outlook for 2016-17 includes a deficit of $4.8 billion.  The Government is proceeding with its plan to balance the budget by 2017-18.

Modest changes of municipal interest include:

• Moving Ontario Forward infrastructure funding increases by $2.6 billion to $31.5 billion over the next ten years in light of the higher value of Hydro One and other assets.
• The Government’s plan ($16 billion) for transit in the Greater Toronto and Hamilton Area (GTHA) is proceeding.  The budget includes specific details regarding GTHA transit projects over the next ten years.  The Government’s plan for investments in the rest of the province has not yet been fully determined.  It will include the Ontario Community Infrastructure Fund, southern and northern highway projects, expanded access to natural gas, and infrastructure investments for the Ring of Fire. More consultation is to occur on this $15 billion component.
• This funding also includes this week’s announcement of a new Connecting Links program starting in 2016-17.
• Specifically on the issue of consultation mentioned above, the Budget reads, “Beginning in 2015, the Province will work with regions, communities, and the private sector to design new programs and a framework to prioritize and evaluate infrastructure needs based on their economic, social, and environmental returns.”
• The Ontario Municipal Partnership Fund envelope will be $505 million in 2016.  This is a slight improvement to the Government’s original plan for a 2016 envelope of $500 million.  Northern Ontario municipalities will benefit exclusively.  The addition $5 million will be added to the Northern Communities Grant Component.  Municipalities in the remainder of the province will experience a $10 million cut to their allocations in 2016.  This will be a considerable impact for some communities in southern Ontario.
• Social Assistance rates (ODSP and Ontario Works) will increase by 1%.  Municipalities will not be required to cost-share the Ontario Works rate increase until January 2016.  
• The budget continues to honour the Provincial-Municipal Fiscal and Service Delivery Review upload agreement of 2008.
• The Government is launching a new Transfer Payment Administrative Modernization initiative which will include municipalities.  It remains to be determined if this will simplify or add greater burden to the administrative and reporting relationship between the orders of government.  AMO’s pre-budget submission urged the Government to simplify the reporting relationship, not add greater complexity.
• There is no change in the budget to scale back the Power Dam Special Payment Program.  Work continues on exploring options to reintroduce property tax for these properties.  An announcement on these changes is expected prior to 2016.

For Northern Ontario

• The budget announces plans to proceed with the long awaited Provincial Land Tax Reform. These changes will be phased in over two years. In the first year, residential taxpayers in unincorporated areas will pay an additional $10 per $100,000 of assessed value in 2015 rising to $40 per $100,000 of assessed value in 2016. In addition, the minimums per property will be set at $50 annually in 2016. This reform addresses a longstanding concern of northern municipalities for a more equitable property taxation system in unincorporated areas. These revenues will go to the provincial treasury.
• The Government is providing the forest industry with $60 million for the Forest Access Roads Program in 2015-16.
• Support for northern industrial electricity users will continue beyond March 2016 with annual assistance of $120 million.

AMO’s budget analysis will continue and we will provide further updates as required.