McGuinty government views on Ontario budgetTuesday, March 27, 2012 by: SooToday.com Staff
ABRIDGED NEWS RELEASES
MINISTRY OF FINANCE
DAVID ORAZIETTI, MPP
A plan to balance the budget, create jobs, protect education and health care
The 2012 Ontario Budget includes a deficit elimination plan that reduces program spending growth and contains costs by $17.7 billion over the next three years, while increasing revenues by $4.4 billion without raising taxes.
This is serious action for a serious time and puts Ontario on track to eliminate the deficit by 2017-18.
More than 50 cents of every dollar spent by the Ontario government pays for the compensation of teachers, doctors and others in the broader public sector.
Given the serious fiscal challenge the Province is facing, compensation costs must be managed if the government is to meet its fiscal targets and protect the gains made over the past eight years in education and health care.
The collective bargaining process will be respected.
Where agreements cannot be negotiated that are consistent with the plan to balance the budget and protect priority services, the government is prepared to propose the necessary administrative and legislative measures.
The government intends to introduce a number of measures to make public sector pensions more affordable for taxpayers and sustainable for pension plan members, following consultations with affected stakeholders.
For example, in cases where pensions are in a deficit, many public sector workers would be asked to reduce future benefits before seeking additional pension contributions from employers or the government.
Current retirees would not be affected.
The 2012 Budget proposes strong action to balance the budget by 2017-18, including:
• Implementing savings of $4.9 billion over three years
• Freezing the general Corporate Income Tax rate and Business Education Tax rate reductions until the budget is balanced
• Capping the Ontario Clean Energy Benefit at 3,000 kWh per month
• Changing the Ontario Drug Benefit program so that about five per cent of seniors -- those with the highest incomes -- pay a larger share of their prescription drug costs
• Ensuring Ontario user fees recover more of the cost of providing programs and services
• Extending the pay freeze for MPPs for another two years -- for a total of five years
• Extending the pay freeze for executives at hospitals, universities, colleges, school boards and agencies for another two years.
The deficit for 2011-12 is projected to be $15.3 billion -- $1 billion lower than forecast a year ago and an improvement of over 38 per cent from the 2009-10 deficit forecast in the fall of 2009.
Without the measures announced in the 2012 Budget, Ontario's deficit would approach $25 billion in 2014-15.
Instead, it is projected to be $10.7 billion that fiscal year.
The government will continue to focus on its priorities to further strengthen the economy and spur job creation.
Jobs and Prosperity
To help build a strong and diversified Ontario that enables business to invest in innovation, improve productivity and become more globally competitive, the government will:
• Consolidate many business support programs into a Jobs and Prosperity Fund that will focus on productivity growth and job creation, while generating overall savings of $250 million in 2014-15
• Establish a multi-stakeholder Jobs and Prosperity Council to advise the government on a plan to boost Ontario's productivity, and lead a research agenda on Ontario's productivity and innovation
• Diversify Ontario's exports to emerging economies by streamlining and coordinating the trade promotion activities of relevant ministries.
Knowledge and Skills
The government will continue to build on its plan to have the world's best-educated workforce to ensure future prosperity in the knowledge-based economy by:
• Fully implementing full-day kindergarten by September 2014
• Keeping a cap on class sizes in the early grades
• Remaining committed to the 30% Off Ontario Tuition grant for eligible full-time undergraduate university and college students
• Further integrating training programs across government to make them more responsive to today's job market.
Transforming Health Care
The government will build on Ontario's Action Plan for Health Care to create a sustainable and high-quality health care system by:
• Transforming health care to reduce the rate of growth of spending to an average of 2.1 per cent annually over the next three years
• Enhancing community-based care to treat patients in alternative settings such as non-profit clinics and at home instead of in hospitals, where appropriate
• Moving to patient-centred funding models to improve the value and quality of care.
As a result of measures proposed in the 2012 Budget, Ontario's accumulated deficit would be $22.1 billion lower in 2014-15 than if no action was taken.
For every dollar in new revenues outlined in the 2012 Budget, there are four dollars of savings and cost-containment measures.
Measures to reduce program spending by a cumulative $17.7 billion over the next three years, compared to what it would have otherwise been, include:
• $4.9 billion in planned savings from removing overlap and duplication, implementing more efficient delivery models and focusing on core business
• $6 billion in government actions to restrain compensation for school boards, payments to physicians and public servants
$6.8 billion to contain costs across the broader public sector.
Ontario's economy is projected to grow at 1.7 per cent in 2012, 2.2 per cent in 2013 and 2.4 per cent in 2014.
In 2011, more than 121,000 jobs were created in Ontario - with full-time employment increasing by 123,400.
The cost of servicing Ontario's debt is approximately $10 billion, the third-largest annual expense behind health care and education.
To put this in perspective, Ontario spends more on interest each year than on colleges and universities.
For every one per cent increase in interest rates, the cost to service the debt increases by $467 million in the first year of the increase.
If no action is taken to balance the budget, Ontario would pay almost as much to service the debt in 2017-18 as it spends on education today.
In February 2012, the Conference Board of Canada suggested that if no action was taken to control growth in spending, Ontario's deficit could be $16 billion by 2017-18. Using similar assumptions, the Commission on the Reform of Ontario's Public Services estimated that the deficit could be as high as $30 billion.
In 2011-12, Ontario's per capita program spending is projected to be $8,560.
This is the lowest among the provinces and 11 percent below the average spent across the other nine provincial governments.
Ontario delivers government services with the lowest per-capita number of provincial public servants.
Orazietti announces provincial budget, projects gains in health care, education and job creation
NDP may force costly $300 million election on Ontarians by rejecting responsible budget plan
QUEEN'S PARK - Today, the provincial government released the 2012 Budget highlighting a five-year plan to eliminate the deficit through reducing program spending growth and containing costs by $17.7 billion over the next three years and increasing revenues by $4.4 billion, David Orazietti, MPP announced.
“Our government remains committed to building on the gains we have made since 2003 in key areas such as health care and education, the most important services on which Ontario families rely," said Orazietti. “This year’s budget will stabilize Ontario’s financial position, allow us to strengthen our economy, create more jobs and enable the province to eliminate the deficit by 2017-18.”
The province’s 2012 Budget reaffirms the government’s commitment to increasing access to quality health care for Ontarians.
Since 2003, the province has increased health care funding by 63 percent or $18-billion.
As a result of $1.5-billion in targeted investments, Ontario now has the shortest wait times in Canada for key medical procedures.
Today, nearly 2.1 million more Ontarians have access to a family doctor and within two years every resident of Sault Ste. Marie will have access to either a family doctor or nurse practitioner as their primary care provider.
Building upon Ontario’s Action Plan for Health Care, the government will continue to focus on delivering high-quality health care that is sustainable in the long term by reducing the rate of growth of spending to an average of 2.1 percent annually over the next three years.
The budget outlines shifts in health care spending to deliver health-care dollars in an efficient manner that will lead to better outcomes for Ontarians.
Specifically, the government will move towards patient-centered funding models to improve the value and quality of care, increase access to after-hours care and invest in community-based care to treat more patients in alternative settings, such as non-profit clinics and at home, when appropriate.
Spending on home care and community health services will be increased by $526 million per year by 2014-15 in order to further reduce pressure on hospitals and emergency rooms.
The budget additionally reaffirms the government’s commitment to making education, ranging from full-day kindergarten to postsecondary, a top priority.
Currently, all schools in Sault Ste. Marie offer full-day kindergarten and the government has committed to maintaining its $1.5-billion investment to fully implement this program across the province by 2014 in order to give young learners the best possible start to their education.
The government has also committed to maintaining small class sizes in the early grades.
In addition, the government will continue to provide full-time postsecondary students with the 30 percent Ontario Tuition Grant, provided the budget is supported by the NDP in the legislature.
The budget delivers a strong action plan for Ontario which includes a number of well-considered measures to manage costs and transform public programs to ensure that front line services are delivered in an efficient and effective manner.
For every dollar in new revenues outlined in the 2012 Budget, there are four dollars of cost-savings and cost containment measures.
The 2017-18 deficit elimination target will be met without raising taxes.
In addition to managing current costs, the government’s deficit reduction plan involves strengthening and further diversifying the economy through increased productivity growth.
The budget announces the establishment of a Jobs and Prosperity Council to advise government on a plan to boost productivity.
Existing business support programs will be streamlined to create a single Jobs and Prosperity Fund that will produce administrative savings of at least 25 percent and overall savings of $250 million in 2014-15.
Regional economic development funds including the Northern Ontario Heritage Fund Corporation (NOHFC), which has provided over $47 million to support 400 projects in Sault Ste. Marie since 2003, will be maintained as a stand-alone program.
“We have introduced a budget today that is measured and responsible and presents a plan to eliminate the deficit while protecting the services that matter most to the people of this province,” said Orazietti. “It remains to be seen whether the NDP will support a balanced approach, or whether the NDP will force Ontario taxpayers to pay $300 million for another provincial election after just six months.”
Earlier SooToday.com coverage of this story: