2017 Ontario Budget: A Stronger, Healthier Ontario

Contents

Foreword

Chapter 1: Restoring Balance — Ontario’s Economic and Fiscal Strength

• Introduction
• Ontario’s Return to Balance
• Ontario’s Balanced Budget
• Declining Net Debt-to-GDP
• Ontario’s Economic Performance
  • Ontario: A Growth Leader
  • Ontario: Creating High-Quality Jobs
  • Ontario’s Diverse Economy
  • Ontario’s Strong Trade Connections with the United States
  • Maintaining Tax Competitiveness
  • Healthy Outlook for Ontario’s Economy
• The Path Forward for All

Chapter 2: Helping You and Your Family

• Introduction
• Helping with Everyday Costs
  • Delivering the Largest Single Reduction to Electricity Rates in Ontario’s History
  • Reducing Electricity Costs for Businesses
  • Modernizing the Province’s Electricity Markets
  • Expanding Access to Natural Gas
  • Elimination of the Drive Clean Emission Test Fee
• Helping Parents
  • OHIP+: Children and Youth Pharmacare
  • Helping Families Access and Afford Child Care
  • Supporting Community Hubs
• Helping Students
  • Making Postsecondary Education More Affordable
• Helping Seniors
  • Promoting Healthy and Active Aging
  • Lowering Public Transit Costs for Seniors
  • Ensuring Sprinklers Are Installed in Licensed Retirement Homes
• Supporting Seniors’ Health
  • Supporting Ontarians Affected by Dementia
  • Community Investments
  • Increasing Investments in Long-Term Care
  • Expanding Seniors’ Access to Affordable Drugs
• Housing Affordability
  • Rising Prices and Rents
  • Actions Underway
  • Restoring Stability to the Housing Market
• Consumer Protection
  • Strengthening Financial Services and Pension Regulation
  • Strengthening Consumer Protection for Owners of Newly Built Homes
  • Regulation of Financial Planning
  • Supporting Financial Literacy
  • Strengthening Investor Protection
  • Improving Auto Insurance

Chapter 3: Creating Opportunities and Security

• Introduction
• Investing in People Today
• Investing in People’s Talents and Skills
• Ontario’s Career Kick-Start Strategy
• Ontario Lifelong Learning and Skills Plan
• Inclusive Skills Development
• Changing Workplaces Review
• Investing in Jobs for Today and Tomorrow
  • Long-Term Infrastructure Plan
  • Business Growth Initiative
  • Promoting and Diversifying Trade
  • Strategic Partnerships
  • Supporting Growth in Ontario’s Agricultural Sector
  • Promoting Regional Economic Development
  • Aboriginal Community Capital Grants Program
  • Helping Businesses Find Skilled Newcomers
  • Social Enterprises
  • Supporting the Sharing Economy
  • Transitioning to a Low-Carbon Economy
• Improving Retirement Security
  • Enhancing the Canada Pension Plan
  • Implementing Pooled Registered Pension Plans
  • Reviewing the Solvency Funding Framework
  • Introducing a Framework for Target Benefit Pension Plans
  • Expanding the Framework for Defined Contribution Pension Plans
  • Expanding the Powers of the Superintendent
  • Missing Beneficiary Requirements

Chapter 4: Public Services You Can Count On

Section A: Strengthening Health Care

• Introduction
• Summary of New Investments
  • Increasing Access
  • Reducing Wait Times
  • Enhancing the Patient Experience
• Increasing Access
  • Building More Health Infrastructure
  • Increasing Operating Funding for All Public Hospitals
  • Investing in Primary Care
  • Increasing Equitable Access to Health Care through Ontario’s First Nations Health Action Plan
  • Advancing Timely Cancer Care and Stem Cell Transplants
  • Improving Pain Management
  • Acting on Ontario’s Opioid Strategy
  • Preventing Fetal Alcohol Spectrum Disorder (FASD) and Supporting Those Affected by FASD
• Reducing Wait Times
  • Improving Critical Procedures and Wait Times
  • Streamlining Access and Reducing Wait Times for Specialized Care
  • Expanding Home and Community Care
  • Faster Access to Mental Health and Addiction Services
  • Increased Access to Structured Psychotherapy
  • Providing More Supportive Housing
  • Bringing Together Youth Services in One-Stop Hubs
• Enhancing Patient Experience
  • Supporting Seniors in Their Communities
  • Enhancing Long-Term Care
  • Ensuring the Best Quality of Care for Patients
  • Making Northern Health Travel More Affordable
  • Improving Care for Mothers, Babies and Children
  • Integrating Local Health Care Services
  • Easy Access to Health Services
• Protecting Health Care for Tomorrow
  • Encouraging a Smoke-Free Ontario
  • Health Innovation
  • Health System Research Fund

Section B: Investing in Education

• Introduction
• Achieving Excellence
  • Reducing Class Sizes
  • Improving Math Knowledge and Skills
  • Supporting Education for the Changing Economy
  • Implementing Ontario’s Indigenous Education Strategy
  • Developing a Master Education Agreement with the Anishinabek Nation
• Ensuring Equity
  • Strengthening Supports for Students with Special Needs
  • Enhancing Autism Supports
• Promoting Student Well-Being
• Building New and Improved Schools
• Negotiating Central Agreements for Teachers and Education Workers
• Ensuring a High-Quality, Accessible Postsecondary Education System
  • Envisioning a French-Language University
  • Investing in Postsecondary Education Infrastructure
  • Advancing Education and Career Opportunities for Indigenous Learners

Section C: Building Transit and Transportation

• Introduction
• Investing in Transit Projects
  • GO Transit
  • Rapid Transit Projects
  • Municipal Infrastructure Projects
• Investing in Highway Infrastructure
• Other Investments in Transportation Infrastructure
  • Supporting Ontario’s Small and Northern Communities
  • High-Speed Rail
• Moving Ontario Forward with the Trillium Trust
  • Broadening Hydro One Ownership
  • Merging Hydro One Brampton
  • Realizing Value from Ontario’s Real Estate Assets

Section D: Building Inclusive Communities and Improving the Justice System

• Introduction
• More Stable and Secure Incomes
  • Introducing a Basic Income Pilot
  • Reviewing the Income Security System
  • Improving Social Assistance Benefits
• Increasing Access to Affordable and Adequate Housing for All Ontarians
  • Implementing the Updated Long-Term Affordable Housing Strategy
  • Leveraging Provincial Land Assets to Build Affordable Housing
  • Social Infrastructure Fund
• Helping Vulnerable People
  • Supporting Adults with Developmental Disabilities
• Supporting Children and Youth
  • Child Welfare Reform
  • Collective Impact for At-Risk Youth
  • Improving Autism Services
• Addressing Racism
  • Anti-Racism Strategy
  • Indigenous-Focused Anti-Racism Strategy
  • Ontario Black Youth Action Plan
• Welcoming New Ontarians
  • Ontario’s Response to the Global Refugee Crisis
  • Multicultural Community Capacity Grant
• Improving the Justice System
  • Building Safer Communities
  • Ensuring Wage Parity for First Nation Police Officers
  • Expanding Indigenous Supports
  • Taking Steps to End Human Trafficking
  • Streamlining and Modernizing the Court System
  • Transforming the Corrections System
  • Enhancing Mental Health in Corrections
  • Justice Infrastructure

Chapter 5: Working with Our Partners

• Introduction: Continued Collaboration with Our Partners
• Working in Partnership with Municipalities
• Partnerships with Indigenous Communities
  • The Journey Together: Ontario’s Commitment to Reconciliation with Indigenous Peoples
  • Walking Together: Ontario’s Long-Term Strategy to End Violence against Indigenous Women
  • Partnering with First Nations on Tobacco
  • Modernizing the Ontario Gas Card Program
  • Protecting Sensitive and Confidential Information
• Achieving Federal–Provincial Fiscal Sustainability in the Federation
  • Ontario’s Growing Contribution to the Federation
• Federal–Provincial Collaboration: Effective, Efficient and Equitable Intergovernmental Relations in Canada
  • Protecting the Canadian Health System
  • Taking a Balanced Approach to the Next Phase of the Federal Infrastructure Investment
  • Renewing Labour Market Transfers to Meet Modern Labour Market Demands

Chapter 6: Responsible Fiscal Management

Section A: Transforming Government for Sustainability and Fairness

• Introduction
• Evidence-Based Decision-Making
  • Improving Programs and Services through Behavioural Science Research
• Transformation and Efficiency Initiatives
  • Government Made Simple
• Ensuring Everyone Pays Their Fair Share
  • Addressing the Underground Economy
  • Addressing Unregulated Tobacco
• Managing Compensation
  • Recent Negotiations and Compensation Outcomes
  • Broader Public-Sector Executive Compensation
  • Going Forward: Leveraging Collective Bargaining to Promote Transformation
• Government Transparency, Financial Management and Fiscal Accountability
  • Government Transparency
  • Financial Management
  • Fiscal Accountability

Section B: Details on Ontario’s Finances and Economic Outlook

• Ontario’s Fiscal Outlook
• 2016–17 Interim Fiscal Performance
  • In-Year Revenue Performance
  • In-Year Expense Performance
• Medium-Term Fiscal Outlook
  • Key Changes since the 2016 Budget
  • Ontario’s Revenue Outlook
  • Medium-Term Revenue Outlook
  • Key Changes in the Medium-Term Revenue Outlook since the 2016 Budget
  • Medium-Term Expense Outlook
  • Fiscal Prudence
• Details of Ontario’s Finances
• Economic Outlook Details
• External Economic Environment
• Ontario Economic Outlook Details
• Uncertain Global Environment
• Private-Sector Forecasts
• Comparison to the 2016 Budget

Section C: Borrowing and Debt Management

• Introduction
• Long-Term Public Borrowing
• Ensuring Preferred Market Access
• Leading Canadian-Dollar Green Bond Market
• Extending Term of Borrowing
• Interest on Debt Savings and Affordability
• Ensuring Adequate Liquidity Levels
• Reducing Net Debt-to-GDP
• Total Debt Composition
• Cost of Debt
• Limiting Risk Exposure
• Using Derivatives to Mitigate Risks
• Reducing Ontario’s Electricity Sector Stranded Debt
• Consolidated Financial Tables

Chapter 7: A Fair and Sustainable Tax System

• Introduction

Section A: Taxation

• Paralleling Federal Measures
  • Clarifying the Treatment of Fertility-Related Expenses under the Medical Expense Tax Credit
  • Consolidating Tax Credits for Caregivers
• Other Measures
  • Lowering Public Transit Costs for Seniors
  • Granting Municipalities the Authority to Levy a Hotel Tax
  • Supporting Renewable Biodiesel in the Coloured Fuel Market
  • Strengthening Ontario’s Tax System
  • Income Tax Avoidance
  • Employer Health Tax Avoidance
• Technical Measures
  • Multijurisdictional Tax Filers

Section B: Tobacco

• Supporting Smoke-Free Ontario

Section C: Strengthening Ontario’s Property Tax and Assessment System

• Strengthening the Governance of the Municipal Property Assessment Corporation
• Property Tax Measures
  • Modernizing Railway Right-of-Way Property Taxation
  • Encouraging Small-Scale Agri-Food Business on Farms
• Moving Forward with Provincial Land Tax Reform
• Ensuring the Ongoing Integrity of Education Property Tax Revenue
• Summary of Measures
• Technical Amendments
• Other Legislative Initiatives

List of Tables

Chapter 1: Restoring Balance — Ontario’s Economic and Fiscal Strength

• Table 1.1 Strong Sectors in Ontario’s Economy

Chapter 3: Creating Opportunities and Security

• Table 3.1 Progress Update on the Business Growth Initiative
• Table 3.2 New Investments through the Business Growth Initiative
• Table 3.3 Recent Strategic Investments through the Jobs and Prosperity Fund
• Table 3.4 Recent Regional Development Investments
• Table 3.5 Carbon Pricing Scenarios — Impacts by 2020

Chapter 4: Public Services You Can Count On

• Table 4.1 Newly Approved Major Hospital Projects
• Table 4.2 Examples of Projects Benefiting from Shared Investments under the Post-Secondary Institutions Strategic Investment Fund in Ontario
• Table 4.3 Highlights of Highway Projects

Chapter 6: Responsible Fiscal Management

• Table 6.1 Ontario’s Fiscal Plan and Outlook
• Table 6.2 2016–17 In-Year Fiscal Performance
• Table 6.3 Summary of Revenue Changes since the 2016 Budget
• Table 6.4 Summary of Expense Changes since the 2016 Budget
• Table 6.5 Change in Medium-Term Fiscal Outlook since the 2016 Budget
• Table 6.6 Summary of Medium-Term Revenue Outlook
• Table 6.7 Personal Income Tax Revenue Outlook
• Table 6.8 Sales Tax Revenue Outlook
• Table 6.9 Corporations Tax Revenue Outlook
• Table 6.10 Summary of Medium-Term Revenue Changes since the 2016 Budget
• Table 6.11 Selected Economic and Revenue Risks and Sensitivities
• Table 6.12 Summary of Medium-Term Expense Outlook
• Table 6.13 Selected Expense Sensitivities
• Table 6.14 Revenue
• Table 6.15 Total Expense
• Table 6.16 2017–18 Infrastructure Expenditures
• Table 6.17 Ten-Year Review of Selected Financial and Economic Statistics
• Table 6.18 Ontario Economic Outlook
• Table 6.19 Outlook for External Factors
• Table 6.20 The Ontario Economy, 2015–20
• Table 6.21 Impacts of Sustained Changes in Key External Factors on Ontario’s Real GDP Growth
• Table 6.22 Private-Sector Forecasts for Ontario Real GDP Growth
• Table 6.23 Changes in Ministry of Finance Key Economic Forecast Assumptions: 2016 Budget Compared with 2017 Budget
• Table 6.24 Borrowing Program and Medium-Term Outlook
• Table 6.25 Consolidated Derivative Portfolio Notional Value
• Table 6.26 Net Debt and Accumulated Deficit
• Table 6.27 Medium-Term Outlook: Net Debt and Accumulated Deficit

Chapter 7: A Fair and Sustainable Tax System

• Table 7.1 Proposed Measures to Modernize Railway Right-of-Way Taxation
• Table 7.2 Tax Measures

List of Charts

Chapter 1: Restoring Balance — Ontario’s Economic and Fiscal Strength

• Chart 1.1 Ontario’s Return to Balance
• Chart 1.2 Net Debt-to-GDP
• Chart 1.3 Net Debt Growth after Balance Is Due Only to Investments in Capital Assets
• Chart 1.4 Ontario’s Economic Growth Outpacing G7
• Chart 1.5 Employment Gains since June 2009 Concentrated in Full-Time and Private-Sector Positions
• Chart 1.6 Ontario Is a Key Export Market for the United States
• Chart 1.7 Ontario’s Internationally Competitive Corporate Income Tax Rate
• Chart 1.8 Ontario’s Growth To Continue to Outpace Canada

Chapter 2: Helping You and Your Family

• Chart 2.1 Making Tuition More Affordable: Jacqueline in College — Living at Home
• Chart 2.2 Making Tuition More Affordable: Jerome in University — Living away from Home
• Chart 2.3 Greater Toronto Area Price Increases Outstrip Other Cities

Chapter 3: Creating Opportunities and Security

• Chart 3.1 Support from Early Years to Adulthood
• Chart 3.2 Significant Infrastructure Investments
• Chart 3.3 Economic Impact of the Ontario Government’s Infrastructure Plan
• Chart 3.4 Ontario among the Leaders in Venture Capital Investment
• Chart 3.5 Reducing Red Tape for Ontario Businesses Is a Key Element of the Government’s Plan to Create Jobs and Grow the Economy
• Chart 3.6 Ontario’s Exports Expanding to New Markets
• Chart 3.7 Planned Use of Carbon Allowance Proceeds
• Chart 3.8 Retirement Income from the Canada Pension Plan Enhancement

Chapter 4: Public Services You Can Count On

• Chart 4.1 Hospital Projects Completed and Underway
• Chart 4.2 Examples of Schools To Be Opened or Under Construction in 2017–18
• Chart 4.3 Aboriginal Postsecondary Education and Training Institutes in Ontario
• Chart 4.4 Investments in Transit and Transportation over the Next 10 Years
• Chart 4.5 Ontario’s Response to the Global Refugee Crisis

Chapter 5: Working with Our Partners

• Chart 5.1 Growth in Ongoing Provincial Support for Municipalities
• Chart 5.2 Net Contribution to the Equalization Program, 2017–18
• Chart 5.3 Ontario’s Economy Is Strengthening Relative to the Canadian Average

Chapter 6: Responsible Fiscal Management

• Chart 6.1 Ontario Public/Private Wage Settlement Trends
• Chart 6.2 Composition of Revenue, 2017–18
• Chart 6.3 Composition of Total Expense, 2017–18
• Chart 6.4 Ontario Economic Growth Expected to Broaden
• Chart 6.5 900,000 Jobs Created by 2020
• Chart 6.6 Demographic Fundamentals to Support Housing Starts over the Medium Term
• Chart 6.7 2016–17 Borrowing
• Chart 6.8 Canadian Dollar and Foreign Currency Borrowing
• Chart 6.9 Weighted-Average Term of Borrowing in Years
• Chart 6.10 Interest on Debt: Budget Forecast versus Actual
• Chart 6.11 Interest on Debt-to-Revenue Ratio
• Chart 6.12 Average Unrestricted Liquid Reserve Levels
• Chart 6.13 Net Debt-to-GDP and Accumulated Deficit-to-GDP
• Chart 6.14 Factors for Growth in Net Debt
• Chart 6.15 Total Debt Composition as of March 31, 2017
• Chart 6.16 Effective Interest Rate (Weighted Average) on Total Debt
• Chart 6.17 Net Interest Rate Resetting and Foreign Exchange Exposure