The latest provincial budget reveals a quiet shift in the governing philosophy at Queen’s Park over the past eight years. While the numbers themselves are measured, the underlying approach to governing has undergone a significant transformation.
The budget, titled “A Plan to Protect Ontario,” echoes the sentiment of the government’s first budget in 2019, “Protecting What Matters Most.” However, the *how* of that protection has dramatically changed. The initial vision of minimizing government intervention in business has given way to a proactive strategy of support, investment, and direct assistance.
Ontario is now actively entering the business of funding businesses, exemplified by the newly created $4-billion Protect Ontario Account Investment Fund. This fund isn’t intended as a giveaway, but as a catalyst, designed to attract further investment from pension funds and private capital.
The goal, as articulated by the Finance Minister, is to identify and capitalize on opportunities that will secure Ontario’s economic future, not just for the next decade, but for the next century. It’s a deliberate attempt to shape the province’s economic landscape.
This represents a stark departure from the past, where the prevailing wisdom held that governments shouldn’t attempt to “pick winners and losers.” Now, that’s precisely what’s happening, driven by a changing global economic reality.
The rise of protectionist policies, initially spearheaded by the United States, has fundamentally altered the business landscape. Governments worldwide are adopting a more interventionist approach than previously seen, responding to a rapidly evolving global trading order.
While $4 billion appears substantial, it represents a relatively small portion – 1.6% – of the province’s total projected spending of $244 billion for the coming year. It’s a targeted investment within a larger financial framework.
Overall, government spending is projected to increase by 2.4%, while revenues are expected to rise by 2.3%, slightly outpacing inflation. Personal income tax revenues are predicted to grow, while corporate and sales tax revenues are expected to remain stable.
The projected budget deficit stands at $13.8 billion, but historical trends suggest this figure may be conservative. The Finance Minister has consistently projected higher deficits than ultimately realized, delivering more favorable results.
Debt servicing will consume a significant $17.2 billion, representing 6.7 cents of every tax dollar collected. The government points to a more manageable debt burden compared to the federal government as a relative success.
The most substantial increase in spending is directed towards healthcare, surpassing the $100-billion mark for the first time. From $91.1 billion projected last year, actual spending reached $97.8 billion, with a further increase to $101.2 billion projected for this year.
Healthcare now accounts for 41% of the total government budget, a testament to the government’s commitment to the sector. Since taking office, healthcare spending has increased by a remarkable 63%, from $62.2 billion to its current level.
Education will see a modest increase, moving from $40.5 billion to $40.8 billion. Spending on post-secondary education and other programs remains largely unchanged. These increases provide context to criticisms of cuts to vital public services.
