2017 Ontario Economic Outlook and Fiscal Review: A Strong and Fair Ontario

Contents

Foreword

2018 Budget Talks and Pre-Budget Consultations

Chapter 1: Building Fairness for Ontario Families

• Introduction
• Ensuring Fairness for Patients
  • Increasing Provincewide Investments in Hospitals
  • Improving Mental Health and Addictions Services
  • Boosting Access to Primary Health Care
  • Supporting Health Care for People in Northern Ontario
  • Equitable Health Care for Indigenous Peoples
  • Meeting the Health Care Needs of the Francophone Community
  • Supporting Patients in Long-Term Care
  • Expanding and Strengthening Home and Community Care
  • Supporting People Affected by Dementia
  • Support for Caregivers
  • Supporting Compassionate End-of-Life Care
• Fairness for Seniors
  • Aging with Confidence: Ontario’s Action Plan for Seniors
• Supporting Families with Children
  • Making Child Care More Accessible and Affordable
  • OHIP+ — Ensuring Fairness for Parents, Children and Youth
  • Improving Youth Well-Being and Achievement
  • Ensuring Equity and Inclusion
• Helping Students
  • Fairness for Postsecondary Students
• Fairness for Workers
• Strengthening and Modernizing Retirement Security
• Improving Income Security and Mobilizing Community Solutions to Reduce Poverty
  • Launching a Basic Income Pilot
  • Enhancing Social Assistance Benefits
  • Mobilizing Community Solutions through the Local Poverty Reduction Fund
• Improving Housing Affordability
  • Implementing the Fair Housing Plan
• Ontario’s Fair Hydro Plan
  • Delivering the Single Largest Reduction to Electricity Rates in Ontario’s History
• Fairness in the Justice System
  • Transforming the Justice System
• Ensuring Women’s Safety and Security
  • Protecting a Woman’s Right to Choose
  • Protecting Women from Violence and Harassment
• Protecting Consumers
  • Regulating Financial Planners
  • Syndicated Mortgages
  • Auto Insurance
  • Protecting Innocent Co-Insureds

Chapter 2: Creating Opportunities for Everyone

• Introduction
• Strengthening Ontario’s Small Businesses
  • $500 Million to Grow Small Businesses and Reduce Costs
  • Cutting Small Business Costs
  • Supporting Small Business Growth
  • Reducing Red Tape for Small Businesses
  • Modernizing Apprenticeships for Small Businesses
  • Building on Existing Initiatives Supporting Small Business
• Supporting Ontario’s Dynamic and Competitive Business Environment
  • Early Successes of Scale-Ups in Ontario
  • Promoting Innovation through Transformational Technologies
  • Reducing Administrative Costs in the WSIB System
• Supporting Investments that Create Jobs
  • Jobs and Prosperity Fund
  • Regional Economic Development
• Embracing Financial Technology (FinTech)
• Investing in People’s Talents and Skills
  • Implementing the Highly Skilled Workforce Strategy
  • Making Postsecondary Education More Accessible
  • Modernizing Apprenticeship
  • Breaking Down Employment Barriers for People with Disabilities
  • Helping New Canadians Find Employment
  • Supporting Vulnerable Newcomers
  • Championing Women’s Empowerment
• Expanding International Trade
  • Global Trade Strategy
  • North American Free Trade Agreement (NAFTA) Renegotiation
  • Promoting Trade with States and Provinces
• Building Tomorrow’s Infrastructure Today
  • Benefits of Infrastructure Investments
  • Trillium Trust
  • Improving Transportation Options in Ontario
  • Improving Access to Public Spaces: Ontario’s Community Hubs
  • Improving Energy Supports for Rural Communities
  • Expanding Broadband Access across the Province
• Advancing a Low-Carbon Economy
  • Designing Ontario’s Carbon Market Going Forward
  • Reducing Compliance Costs
  • Investing in a Low-Carbon Economy

Chapter 3: Ontario’s Economic and Fiscal Strength

Section A: Economic and Fiscal Overview

• Introduction
• Ontario’s Balanced Budget
• Declining Net Debt-to-GDP
• Ontario’s Economic Performance and Outlook

Section B: Economic Outlook

• Outlook for Ontario’s Economic Growth
• External Economic Environment
• Ontario’s Housing Market
• Risks to Ontario’s Economic Outlook
  • Transforming Statistics to Support Policy Development
• Details of the Ontario Economic Outlook
  • Private-Sector Forecasts
  • Comparison to the 2017 Budget

Section C: Fiscal Outlook

• Fiscal Outlook
  • Revenue
  • Expense
  • Prudence
• Key Changes to the Medium-Term Fiscal Outlook since the 2017 Budget
  • Revenue
  • Expense
  • Prudence
• Key 2017–18 Changes since the 2017 Budget
  • Revenue
  • Expense
• Improved Transparency in Financial Reporting
• Details of Ontario’s Finances

Section D: Borrowing and Debt Management

• Long-Term Public Borrowing
• Leading Canadian Dollar Green Bond Market
• Interest on Debt Savings and Affordability
• Net Debt-to-GDP
  • Cost of Debt
• Reducing Ontario’s Electricity Sector Stranded Debt

Chapter 4: Working with Our Partners

• Introduction
• Working in Partnership with Municipalities
• Partnership with Indigenous Communities
  • Working in Partnership to Support Indigenous Youth
  • Strengthening Indigenous Communities
• Updates on Federal–Provincial Partnerships
  • Collaborating on Early Learning and Child Care
  • Strengthening Health Care
  • Building towards a National Pharmacare Plan
  • Preparing for the Legalization of Cannabis
  • Improving Labour Market Transfers
  • Investing in Infrastructure
  • Addressing Climate Change
  • Renegotiating NAFTA
  • Establishing the Cooperative Capital Markets Regulatory System

Chapter 5: A Fair and Sustainable Tax System

• Introduction

Section A: Business Taxation

• Cutting the Small Business Corporate Income Tax Rate
• Modernizing Employer Support for Apprenticeship Training
• Land Transfer Tax on Unregistered Dispositions
• Summary of Measures

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

• Ensuring Greater Consistency in Business Vacancy Rebate and Reduction Programs
• Finalizing Provincial Land Tax Reform
• Encouraging Small-Scale Agri-Food Business on Farms

Section C: Addressing the Underground Economy and Unregulated Tobacco

• Underground Economy
• Unregulated Tobacco

List of Tables

Chapter 2: Creating Opportunities for Everyone

• Table 2.1 Examples of Recent Initiatives Supporting Ontario Small Businesses
• Table 2.2 Examples of Recent Strategic Investments through the Jobs and Prosperity Fund
• Table 2.3 Examples of Recent Regional Development Investments
• Table 2.4 2016–17 Infrastructure Investments Supported by the Trillium Trust
• Table 2.5 Broadband Infrastructure Investments across Ontario
• Table 2.6 Carbon Pricing Scenarios — Economic Impacts of Achieving Ontario’s 2020 Emissions Reduction Target

Chapter 3: Ontario’s Economic and Fiscal Strength

• Table 3.1 Ontario's Economic Outlook
• Table 3.2 Outlook for External Factors
• Table 3.3 Impacts of Sustained Changes in Key External Factors on Ontario’s Real GDP Growth
• Table 3.4 The Ontario Economy, 2015 to 2020
• Table 3.5 Private-Sector Forecasts for Ontario Real GDP Growth
• Table 3.6 Changes in Ontario Ministry of Finance Key Economic Forecast Assumptions: 2017 Budget Compared with 2017 Fall Economic Statement
• Table 3.7 Ontario’s Fiscal Outlook
• Table 3.8 Summary of Changes to the Fiscal Outlook since the 2017 Budget
• Table 3.9 Summary of Changes to Program Expense since the 2017 Budget
• Table 3.10 2017–18 Revenue Changes since the 2017 Budget
• Table 3.11 2017–18 Expense Changes since the 2017 Budget
• Table 3.12 Impact of Changes in Provincial Reporting
• Table 3.13 Revenue
• Table 3.14 Total Expense
• Table 3.15 2017–18 Infrastructure Expenditures
• Table 3.16 Ten-Year Review of Selected Financial and Economic Statistic
• Table 3.17 Borrowing Program and Medium-Term Outlook

Chapter 5: A Fair and Sustainable Tax System

• Table 5.1 2017 Tax Measures
• Table 5.2 Provincial Land Tax Annual Residential Rate Changes

List of Charts

Chapter 1: Building Fairness for Ontario Families

• Chart 1.1 Examples of Hospital Construction and Renewals in 2017–18
• Chart 1.2 Home Care Services for Patients and Caregivers in 2017–18
• Chart 1.3 Ontario’s Aging Population, 1980–2040
• Chart 1.4 Examples of Schools to Be Opened or Under Construction in 2017–18
• Chart 1.5 Ontario Resale Housing Market
• Chart 1.6 Monthly Electricity Bill Outlook — Residential Consumers
• Chart 1.7 Additional Support through Ontario’s Fair Hydro Plan

Chapter 2: Creating Opportunities for Everyone

• Chart 2.1 Ontario FinTech Accelerator Office
• Chart 2.2 Ontario’s Response to the Global Refugee Crisis
• Chart 2.3 Ontario Is a Key Export Market for the United States
• Chart 2.4 Ontario Greenhouse Gas Emissions and Targets

Chapter 3: Ontario’s Economic and Fiscal Strength

• Chart 3.1 Ontario’s Return to Balance
• Chart 3.2 Net Debt-to-GDP
• Chart 3.3 Factors for Growth in Net Debt
• Chart 3.4 Ontario’s Growth Strengthened in Recent Years
• Chart 3.5 Ontario’s Unemployment Rate Remains below the National Average for 31 Consecutive Months
• Chart 3.6 Composition of Revenue, 2017–18
• Chart 3.7 Composition of Total Expense, 2017–18
• Chart 3.8 2017–18 Borrowing
• Chart 3.9 Interest on Debt-to-Revenue Ratio
• Chart 3.10 Net Debt-to-GDP and Accumulated Deficit-to-GDP
• Chart 3.11 Effective Interest Rate (Weighted Average) on Total Debt

Chapter 5: A Fair and Sustainable Tax System

• Chart 5.1 Corporate Income Tax Rates for Small Business — Ontario and G7 Member Countries