Introduction
The novel coronavirus (COVID‑19) global pandemic has deeply impacted individuals, families and businesses across our province and around the world.
Above all else, my thoughts are with the those who have COVID‑19, or whose families have been directly affected.
In addition to the health impacts, COVID‑19 is impacting our economy. Markets are volatile. Entrepreneurs are worried. Employees are anxious. And families are suffering.
Through it all, the message from Premier Doug Ford and our government has been crystal clear: we will ensure the necessary resources are in place to protect the health of our people and our economy in this province. In working with our partners and other levels of government, that is exactly what we intend to do.
This economic and fiscal update provides a prudent one-year outlook based on current economic projections. It also provides certainty to hospitals, schools, municipalities and other partners for the year to come. Most importantly, it includes increased resources for our health care system and direct support for people and jobs.
We remain in a rapidly evolving situation, which continues to change daily. In recent weeks there have been significant revisions to the economic outlook that would normally be used to develop Ontario’s Budget.
As Ontario’s Minister of Finance, it is important that I introduce a financial plan for the province that is based on the most up-to-date information available. Providing this update — instead of a full Budget — is the responsible thing to do. I intend to introduce a multi-year Budget to the Legislature no later than November 15. Between now and then, we will build on our record of transparency, with regular financial updates as the situation evolves. This will ensure the people of Ontario are informed by the most up-to-date information available.
The people of Ontario can be confident their provincial government is acting decisively to weather the challenges ahead. This update will ensure our health care system has the resources required to respond to COVID‑19, that our people are supported as they deal with a global pandemic, and that actions are taken to protect jobs and ensure long-term economic growth.
The impacts of COVID‑19 are the latest reminder that Ontario is part of an integrated global economy. While we are not immune to external threats, we can control how we respond — both as a government and as individuals.
We have always said Ontario must return to a sound financial footing. Events like we have witnessed in recent weeks underscore why this is so important. Quite simply, the Province must be responsible stewards of the public’s finances so we can take whatever action is required to protect our people in an emergency like this.
Through the actions we have taken since assuming office, we are responding to COVID‑19 from a position of strength, with the flexibility to act swiftly and effectively.
I am confident that our people are equally well positioned. From the person checking in on a vulnerable neighbor, to the doctors, nurses, public health officials and other health care workers working around the clock to keep us safe, we have seen many examples of human kindness and decency in recent weeks. Continuing to act responsibly and looking out for each other is perhaps the most important thing any of us can do as individuals during this difficult time.
I was confident in Ontario before COVID‑19, and I remain equally confident today. By acting decisively, and working together with our partners, Ontario will weather the challenges ahead.
[Original Signed by]
The Honourable Rod Phillips
Minister of Finance
Economic and Fiscal Update
The Province is projecting a deficit of $9.2 billion in 2019–20 which represents an improvement of $1.1 billion relative to the 2019 Budget. As a result of the response to the COVID‑19 outbreak, the government is planning for a deficit of $20.5 billion in 2020–21.
| Actual 2018–19 |
Interim1 2019–20 |
Plan 2020–21 |
|
|---|---|---|---|
| Revenue — Personal Income Tax | 35.4 | 37.6 | 37.3 |
| Revenue — Sales Tax | 27.8 | 29.1 | 29.1 |
| Revenue — Corporations Tax | 16.6 | 15.4 | 15.2 |
| Revenue — Ontario Health Premium | 3.8 | 4.1 | 4.1 |
| Revenue — Education Property Tax | 6.2 | 6.2 | 6.3 |
| Revenue — All Other Taxes | 15.7 | 16.2 | 16.3 |
| Total Taxation Revenue | 105.5 | 108.7 | 108.2 |
| Government of Canada | 25.1 | 25.4 | 26.3 |
| Income from Government Business Enterprises | 5.5 | 5.7 | 4.1 |
| Other Non-Tax Revenue | 17.6 | 16.9 | 17.6 |
| Total Revenue | 153.7 | 156.7 | 156.3 |
| Programs — Health Sector | 61.9 | 64.4 | 67.8 |
| Programs — Education Sector2 | 28.7 | 29.8 | 30.3 |
| Programs — Postsecondary Education Sector | 11.2 | 10.4 | 10.7 |
| Programs — Children’s and Social Services Sector | 16.8 | 17.4 | 17.7 |
| Programs — Justice Sector | 4.5 | 4.6 | 4.5 |
| Programs — Other Programs | 25.6 | 26.6 | 30.1 |
| Total Programs | 148.8 | 153.1 | 161.1 |
| Interest on Debt | 12.4 | 12.6 | 13.2 |
| Total Expense | 161.1 | 165.7 | 174.3 |
| Surplus/(Deficit) Before Reserve | (7.4) | (9.0) | (18.0) |
| Reserve | – | 0.2 | 2.5 |
| Surplus/(Deficit) | (7.4) | (9.2) | (20.5) |
| Net Debt as a Per Cent of GDP | 39.5% | 39.9% | 41.7% |
[1] Interim represents the March 2020 Economic and Fiscal Update projection for the 2019–20 fiscal year.
[2] Excludes the Teachers’ Pension Plan, which is included in Other Programs.
Note: Numbers may not add due to rounding.
The COVID‑19 outbreak has negatively impacted the near-term global and Ontario economic growth outlooks, making it difficult to quantify uncertainties stemming from COVID‑19. As a result, revenue projections have been adjusted to reflect past experience in periods when there was a sudden slowdown in economic activity.
As a result, the revenue forecast is projected to be $156.3 billion in 2020–21, representing a decrease of $0.5 billion relative to the 2019–20 interim estimate.
Despite the challenging fiscal circumstances, the government remains committed to investing in the priorities of the people of Ontario. In addition to immediate resources to respond to COVID‑19, the government is making additional investments in critical programs and services. In 2020–21, program expense is expected to be $161.1 billion, representing an increase of $8.0 billion relative to the 2019–20 interim estimate.