Ontario budget 2016: Low-income seniors, students get relief

The Ontario government tabled an optimistic budget Thursday that boosts health spending, offers major tuition relief for most low-income students and includes robust growth projections that will allow it to fulfil its promise of balanced books by 2017-18.

• Liberals pitch grant to cover average tuition for low-income students
• Liberals' cap and trade plan expected to generate $1.9B
• More seniors to qualify for low-income drug program, others to pay more
• What's going to cost you more? (Sorry, wine drinkers)

The $133-billion spending plan, tabled Thursday, will, however, also make life more expensive for some Ontarians.

Students were the big winners, with a pledge to overhaul the Ontario Tuition Grant program to cover the average post-secondary tuition for students from families that earn $50,000 a year or less.

The government has also increased funding for health-care sectors identified as priorities during pre-budget consultations, including palliative care ($75 million), cancer care services ($130 million) and $333 million to "redesign and consolidate" services for children and youth with autism.

"Our economy only hums, only improves, when everybody's contributing," Finance Minister Charles Sousa told reporters on Thursday.

"And we're not going to leave anybody behind."

But opposition leaders accused the government of making life more expensive for Ontarians by hiking drug costs for low-income seniors and eliminating the Children's Activity Tax Credit.

"I almost feel this budget is one step forward, two steps back," Progressive Conservative Leader Patrick Brown told reporters.

'Caution in our numbers'

The budget projects GDP growth of 2.2 per cent in 2016, outpacing national growth, with projections of 2.4 per cent in 2017, 2.2 per cent in 2018 and 2.0 per cent in 2019.

With those numbers, the Liberals project a $4.3 billion budget deficit for 2016-17 before hitting balance in 2017-18.

Asked by reporters whether the government is promising balanced books based on factors outside its control, Sousa pointed out that it beat its projected deficit figure by more than $2 billion for 2015-16.

"We're balancing the budget because we have taken the necessary steps to ensure we have prudence and caution in our numbers," Sousa said.

He denied that the government used the partial sale of Hydro One and other one-off revenue sources to help fulfil its budget balance pledge.

Jean-Paul Lam, a professor of economics at the University of Waterloo, said the government's growth projections are generally in line with what private forecasters have projected, but he raised one concern.

"The growth projections are based on the U.S. economy," Lam told CBC News. "The big question is, what would happen if we saw a slowdown in the U.S.?"

Cap-and-trade system

Revenue from the new cap-and-trade system will boost government coffers starting next year. The government announced new details about its plan in the budget, saying it will bring in $1.9 billion per year starting in 2017, making it by far the province's largest new revenue generator.

However, under the plan, the average household could pay about $8 more per month in gas costs and $5 more in monthly natural gas costs by 2017.

The Canadian Taxpayers' Federation slammed the new system, and the increased costs that will result.

"Commuters in Ontario already pay high taxes at the pump, and this gas tax hike will make life in this province even more unaffordable," said Christine Van Geyn, the federation's Ontario director.

"And now we can't even find solace about the state of the province's economy in a nice glass of wine, because the premier is hiking the tax on that, too. The fiscal train wreck in Ontario needs to end."

'Life is harder'

Some costs will be going down for Ontarians, who may be most pleased to hear that the $30 fee to have their car tested as part of the Drive Clean program is being eliminated. The program itself will remain.

However, as hinted in a government report released last week on modernizing Ontario's wine sales regime, the cost of a bottle of vino is set to rise. The minimum price for a bottle of table wine will be set at $7.95, while the LCBO will be permitted to raise the markup it charges to bring it in line with spirits and beer.

"Life is harder and more expensive under the Liberals," Brown said. "And life will continue to get more expensive for the people of Ontario."

He said he doubted the government would balance its books by 2018.

Brown also criticized the Liberals for what he said was a failure to come up with a plan to not just eliminate the budget deficit, but to pay down the debt.

According to the government's projections, the net debt is forecast to hit $296.1 billion as of March 31. While that is nearly $3 billion lower than forecast in last year's budget, Brown said he was concerned to see the debt-to-GDP ratio at more than 39 per cent.

"The government doesn't seem to have a plan to address that," Brown said.

The Liberals are vowing to reduce the ratio to its pre-recession level of 27 per cent.

NDP Leader Andrea Horwath dismissed the budget as lacking a plan to create jobs, improve health care and invest in education.

"At its heart, this is a stretch-goal budget," Horwath told reporters.

"For most Ontarians, nothing changes for the better."