Ontario tabled its fall economic statement Thursday that shows the province delaying its path to balance by a year and the government proposing to launch its own infrastructure bank to fund major projects. Here are the highlights:
Deficit
The province says there will be a larger than anticipated deficit for this fiscal year.
The spring budget projected a $1.3-billion deficit this year, with the province then getting to balance in 2024-25 with a small surplus.
But Finance Minister Peter Bethlenfalvy now says Ontario will be $5.6 billion in the red this year, with a $5.3-billion deficit next year, followed by a small surplus in 2025-26.
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Ontario Infrastructure Bank
The province is launching the Ontario Infrastructure Bank, saying taxpayers cannot fund major capital projects alone. The province is contributing $3 billion in initial funding to get the arm’s-length bank up and running.
Ontario plans to target “trusted institutional investors” such as public-sector pension plan organizations.
Bethlenfalvy says the projects funded through the bank will initially be focused on long-term care homes, energy infrastructure, affordable housing, municipal and community infrastructure and transportation.
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Invest Ontario Fund
The province is investing $100 million more into the Invest Ontario Fund, bringing it to a total of $500 million.
The province says the money is used to attract companies to Ontario.
The province cites a $3.1 million investment from the fund given to Mitsui HighΓÇÉtec, a motor parts manufacturing company, which invested more than $100 million to expand its capacity to build parts for electric vehicles.
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Water fund
The province is launching what it calls a new “housing-enabling water systems fund.”
Ontario will invest $200 million over three years into the fund that will be available for municipalities to apply to for the “repair, rehabilitation and expansion of core water, wastewater and stormwater projects that promote growth and enable housing development.”
The province says the new fund will complement its recently announced “building faster fund,” a $1.2-billion purse over three years available to municipalities to help them reach housing targets set by the province.
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Contingency Fund
The province is squirrelling away billions of dollars to help it respond to surprise expenses.
The province set aside $1 billion in its March budget for the year towards the contingency fund.
It has now added another $2.5 billion to the fund this year, which now has a balance of $5.4 billion.
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Vaping Tax
The province plans to join the federal government’s excise tax on vaping in an effort to fight the growing issue.
The province says public health experts, the World Health Organization and the Canadian Cancer Society say taxation is a useful tool to reduce vaping.
Research in the Canadian Medical Association Journal shows that for every six non-smokers, one person will begin smoking.
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Gas Tax Cut
The province announced earlier this week it would extend its gas tax cut for another six months.
The province first cut the 5.7-cent tax in July 2022 and has extended it several times since.
The reduction and a 5.3-cent cut to the price of diesel fuel will remain until June 30, 2024.
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Rental Housing
The province is scrapping its portion of the harmonized sales tax on new purpose-built rental housing construction.
Ontario had been asking the federal government to drop its goods and sales tax on purpose-built rental housing for more than a year.
The federal government did that in September and Ontario has officially joined them in an effort to spur construction in the rental housing market.
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Mammograms
The province will be lowering the age for regular breast cancer screenings from 50 to 40, in an effort to detect cancer earlier.
Health Minister Sylvia Jones announced the move earlier this week.
The changes will mean an additional 130,000 mammograms each year.
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This report by The Canadian Press was first published Nov. 2, 2023.
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
