Chamber News

Ontario government commits $17 billion in response to COVID-19 as part of its spring economic update

Todd Smith, MPP for Bay of Quinte and Ontario’s Minister of Children, Community and Social Services, welcomed the government’s significant investment of $17 billion to address COVID-19 as part of Minister of Finance Rod Phillips’ March Economic and Fiscal Update.

“My top priority is keeping Bay of Quinte families safe and well,” said Smith. “Ontario’s Action Plan: Responding to COVID-19 will provide our health-care workers the tools they need, while also providing tangible relief to the people of Ontario and to our business community as well.”

A critical first step to position the Province to weather the challenges ahead, the $17-billion package will provide $3.3 billion to bolster health care, $3.7 billion to support people and jobs, and an additional $10 billion to improve cash flow through tax deferrals and other measures.

Within today’s announcement, the government is showing historic levels of fiscal prudence. In addition to an unprecedented $2.5 billion reserve, the plan includes a dedicated $1-billion contingency fund as part of the additional investment in health care and a $1.3-billion contingency fund to respond to changing global circumstances.  The government is projecting a $9.2-billion deficit in 2019-2020 – an improvement of $1.1 billion relative to the 2019 budget – and, due to the COVID-19 outbreak, is planning for a $20.5-billion deficit in 2020-2021.  Phillips has also committed to releasing a full multi-year budget by Nov. 15, 2020.

“Our government has taken a responsible approach that will allow us to make life more manageable, while still having the ability to reassess changing conditions and prepare for the future,” said Smith.

The specific measures included in today’s action plan are as follows…

HEALTH CARE

Investments of $2.1-billion in new measures related to COVID-19, $1.2 billion to improve health-care system.

• A commitment of a dedicated $1-billion COVID-19 contingency fund for emergency needs related to the pandemic response.
• Investment of $935 million for the hospital sector, including $594 million to accelerate progress on the government’s commitment to address capacity issues, as well as $341 million for an additional 1,000 acute care and 500 critical care beds and additional assessment centres.
• An increase of $160 million in public health funding to support COVID-19 monitoring, surveillance, and laboratory and home testing, while also investing in virtual care and Telehealth Ontario.
• An investment of $243 million for surge capacity in the long-term care sector, as well as funding for 24/7 screening, more staffing to support infection control, and supplies and equipment to help tackle the COVID-19 outbreak.
• An investment of $75 million to supply personal protective equipment and critical medical supplies to frontline staff to tackle COVID-19.

PEOPLE AND JOBS

Investments of $2 billion for targeted supports, $1.5 billion for electricity cost relief, and $290 billion for electricity cost relief.

• The provision of a one-time payment of $200 per child up to 12 years of age, and $250 for those with special needs, to help families pay for the extra costs associated with school and daycare closures during the COVID-19 outbreak.  This funding is also available for children enrolled in private schools.
• A proposal to double the Guaranteed Annual Income System (GAINS) payments for low-income seniors for six months.
• Provision of approximately $5.6 billion for electricity cost relief programs for eligible residential, farm, and small business consumers in 2020-2021, an increase of about $1.5 billion in comparison to the 2019 Budget plan.
• Provision of further support for more affordable electricity bills by setting electricity prices for residential, farm, and small business time-of-use customers at the lowest rate, known as off-peak, 24 hours a day for 45 days to support ratepayers in their increased daytime usage due to COVID-19.
• Cutting taxes by $355 million for about 57,000 employers through a proposed temporary increase to the Employer Health Tax (EHT) exemption.
• The provision of $9 million in direct support for families for their energy bills by expanding eligibility for the Low-Income Energy Assistance Program (LEAP) and ensuring their electricity and natural gas services are not disconnected for non-payment during the COVID-19 outbreak.
• Providing emergency childcare options to support parents working on the front lines, such as health-care workers, police officers, firefighters and correctional officers.
• Provision of expanded access to the emergency assistance program administered by Ontario Works to provide financial support to people facing economic hardship and help more people meet basic needs such as food and rent during this public health emergency.
• Enhancing funding by $148 million for charitable and non-profit social services organizations such as food banks, homeless shelters, churches, and emergency services to improve their ability to respond to COVID-19 by providing funding directly to Consolidated Municipal Service Managers and District Social Service Administrative Boards who would allocate this funding based on local needs.
• Providing six months of Ontario Student Assistance Program (OSAP) loan and interest accrual relief, leaving more money in people’s pockets.
• Helping to support regions lagging in employment growth with a proposed new corporate income tax credit, the Regional Opportunities Investment Tax Credit.
• Providing additional supports of $26 million to Indigenous Peoples and communities, including emergency assistance for urban Indigenous people in financial need, and costs for health-care professionals and critical supplies to reach remote First Nations.

CASH FLOW SUPPORTS

Providing $10 billion to support improved cash flow for people and businesses during COVID-19 outbreak.

• Making available $6 billion by providing five months of interest and penalty-free relief for businesses to file and make payments for the majority of provincially administered taxes.
• Deferring the upcoming June 30 quarterly municipal remittance of education property tax to school boards by 90 days, which provides municipalities the flexibility to, in turn, provide property tax deferrals to residents and businesses while ensuring school boards continue to receive their funding. A measure valued at over $1.8 billion.
• Making available $1.9 billion by the Workplace Safety and Insurance Board, allowing employers to defer payments for up to six months.

QUICK FACTS

• The March 2020 Economic and Fiscal Update provides planning assumptions for the year ahead. The government will provide regular updates of the Province’s fiscal and economic outlook throughout the year.
• Ontario’s $2.5-billion reserve fund is the highest in its history.

ADDITIONAL RESOURCES

Ontario’s Action Plan: Responding to COVID-19: https://news.ontario.ca/mof/en/2020/03/ontarios-action-plan-responding-to-covid-19.html

General information on COVID-19: www.ontario.ca/coronavirus