Ontario Finance Minister Peter Bethlenfalvy tabled the province’s 2024-25 budget on Tuesday, outlining a “deterioration” of the province’s fiscal situation and a higher deficit projection next year because of slower economic growth, inflation and higher interest rates.

Still, the province said it would not raise taxes or fees on residents and pledged to continue its plan to build more infrastructure and spend on services such as health care and hospitals. The budget also included new spending in areas including crime, auto insurance rates and recreational facilities.

Here’s what you need to know about the Ontario government’s latest fiscal plan:

Deficits rising, but still a path to balance

Ontario is projecting the deficit in the coming year will be almost double what was predicted in last fall’s economic update – increasing to $9.8-billon from the previous estimate of $5.3-billion. A year ago, the government was predicting a balanced budget in 2024-25.

Still, the latest budget shows the deficit falling to $4.6 billion in 2025-26 and then a surplus of $500-million by 2026-27, when Ontarians will vote in the next provincial election. The government says the deficit is driven by slower growth, the need to put more money into infrastructure, and a previously announced extension of the cut to the province’s gasoline tax. As well, the province has had to come up with billions of dollars in backpay for public-sector workers after the government lost a legal fight over a law that attempted to cap wages.

Municipalities and infrastructure

A key focus of the 2024 budget is funding for Ontario’s 444 municipalities, including a previously announced $1-billion for a new municipal program to facilitate housing construction and an additional $625-million fund for water systems.

The measures were aimed at addressing complaints from municipalities that their ability to build new housing is hampered by a lack of resources for roads and pipes.

Health care

Ontario is planning to spend billions more on health care, including $2-billion over three years to expand access to home care and increase compensation for personal support workers and nurses; and almost $1-billion more for hospitals in 2024-25.

The budget also outlines an extra $546-million over three years, starting next year, to link 600,000 people with primary care teams, and another $152-million to provide stable housing for people with mental health conditions and addictions. And the government said it would create a new medical school in Vaughan, Ont., affiliated with York University, that would focus on training family doctors.

Bill 124 backpay

Ontario is spending billions on backpay for public-sector employees, including health-care and education workers, who had their compensation increases capped by Bill 124.

The legislation limited wage hikes for broader public sector workers at one per cent a year for three years, but the unions successfully challenged the law in court.

The Ontario Court of Appeal issued a decision last month upholding an earlier ruling that found the law is was unconstitutional, prompting the government to announce it would repeal the law rather than appeal it.

Even as the court case proceeded, public-sector unions were awarded backpay through arbitration. Mr. Bethlenfalvy said the total extra compensation owed so far is about $6-billion.

Auto insurance

The government says it will move forward with reforms to the auto insurance industry to offer drivers more affordable options and improve access to benefits.

While mandatory accident insurance benefit coverage will continue to apply to medical, rehabilitation and attendant care benefits for severally injured people, the budget promises all other benefits would be optional. The government says this will give drivers the opportunity to lower premiums with a wider range of coverage options.

Mr. Bethlenfalvy told reporters the plan does not involved any “specific numbers” in terms of rate increases or decreases, but he said the policy is focused on choice and convenience and intended to spur competition. The Opposition New Democrats, however, warned that drivers will be left more vulnerable if given the option to opt-op of coverage.

Police

The government is promising $46-million over three years to improve police patrol and response times in the Greater Toronto Area, including purchasing four police helicopters. The helicopters are expected to be owned by the Ontario Provincial Police but the government has yet to decide if other police forces will operate them in their regions.

Sports and recreation

The province is launching a new $200-million Community Sport and Recreation Infrastructure Fund for sport and recreational facilities. The funding, spread over three years, will go toward building new facilities, such as hockey rinks and community centres, and will be handed out to municipalities based on applications for specific projects.

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