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.
—
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.
—
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.
—
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.
—
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.
—
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.
—
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.
—
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.
—
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.
—
This report by The Canadian Press was first published Nov. 2, 2023.
OTTAWA – Statistics Canada says manufacturing sales rose 1.4 per cent to $71 billion in July, helped by higher sales in the petroleum and coal and chemical product subsectors.
The increase followed a 1.7 per cent decrease in June.
The agency says sales in the petroleum and coal product subsector gained 6.7 per cent to total $8.6 billion in July as most refineries sold more, helped by higher prices and demand.
Chemical product sales rose 5.3 per cent to $5.6 billion in July, boosted by increased sales of pharmaceutical and medicine products.
Sales of wood products fell 4.8 per cent for the month to $2.9 billion, the lowest level since May 2023.
In constant dollar terms, overall manufacturing sales rose 0.9 per cent in July.
This report by The Canadian Press was first published Sept. 16, 2024.
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets climbed to their best week of the year.
“It’s been almost a complete opposite or retracement of what we saw last week,” said Philip Petursson, chief investment strategist at IG Wealth Management.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
While last week saw a “healthy” pullback on weaker economic data, this week investors appeared to be buying the dip and hoping the central bank “comes to the rescue,” said Petursson.
Next week, the U.S. Federal Reserve is widely expected to cut its key interest rate for the first time in several years after it significantly hiked it to fight inflation.
But the magnitude of that first cut has been the subject of debate, and the market appears split on whether the cut will be a quarter of a percentage point or a larger half-point reduction.
Petursson thinks it’s clear the smaller cut is coming. Economic data recently hasn’t been great, but it hasn’t been that bad either, he said — and inflation may have come down significantly, but it’s not defeated just yet.
“I think they’re going to be very steady,” he said, with one small cut at each of their three decisions scheduled for the rest of 2024, and more into 2025.
“I don’t think there’s a sense of urgency on the part of the Fed that they have to do something immediately.
A larger cut could also send the wrong message to the markets, added Petursson: that the Fed made a mistake in waiting this long to cut, or that it’s seeing concerning signs in the economy.
It would also be “counter to what they’ve signaled,” he said.
More important than the cut — other than the new tone it sets — will be what Fed chair Jerome Powell has to say, according to Petursson.
“That’s going to be more important than the size of the cut itself,” he said.
In Canada, where the central bank has already cut three times, Petursson expects two more before the year is through.
“Here, the labour situation is worse than what we see in the United States,” he said.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
— With files from The Associated Press
This report by The Canadian Press was first published Sept. 13, 2024.
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets also climbed higher.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
This report by The Canadian Press was first published Sept. 13, 2024.
