Ont. Liberals table budget with $12.5B deficit
Ontario Finance Minister Charles Sousa (R) and Ontario Premier Kathleen Wynne stand in the chamber before the delivery of the provincial budget at Queen's Park in Toronto, May 1, 2014. REUTERS/Mark Blinch
TORONTO — The 2014 Ontario budget hikes taxes on smokers, high earners and high flyers.
Ontario will hit up upper-income earners for $635 million more this year, smokers for $140 million, corporations for $40 million and users of aviation fuel for $25 million.
The Liberal budget released Thursday jacks up the Personal Income Tax Rate by 1.56% on those earning more than $150,000 a year, and by 3.12% for people making more than $220,000.
Cigarette taxes going up 1.6 cents per smoke, jacking tax on a 200-cigarette carton to $27.95.
Aviation fuel taxes will soar by 248%.
The budget calls for $130.4 billion in spending on programs and debt repayment in 2014-15, up $3.4 billion from the previous year.
The revenue the treasury takes in will rise to $118.9 billion, up $3 billion, leaving a shortfall of $12.5 billion including a $1-billion reserve.
The government expects significant increases in revenue will eliminate the deficit by 2017-18.
Annual interest fees for the province’s ballooning debt will grow to $11 billion this year, $12 billion next year and $13.3 billion in 2016/17.
Net debt — the amount Ontario owes — will hit $317.2 billion in two years, which is $21,019 for every person in the province.
Hover over the right side and click the grey box to advance the timeline:
In 2003-04, when the Liberals came to power, the net debt was $10,971 per person.
Finance Minister Charles Sousa said 98% of Ontarians won’t see their personal income taxes go up.
Sousa said he believes NDP Leader Andrea Horwath and her caucus can find good reasons to support his budget.
The minority government will be plunged into an election within a month without support from the NDP, but the object of the Liberals’ affection stood them up.
Horwath was a no-show in the budget lockup — the first time veterans can remember an opposition leader blowing off the media availability.
“I’m perplexed as to why the leader of the third party would not stand before Ontarians...because this is about the well-being of Ontarians,” Sousa said. “They deserve to know where (the New Democrats) are at.”
PC Leader Tim Hudak said this budget is more than a fiscal document, it’s about the future of the province, and Horwath should have appeared to provide her view on it.
“We’re paid a good salary to make decisions and take a stance,” Hudak said.
Horwath has scheduled a media conference for Friday morning to discuss the budget.
After years of flat or declining profits from beer and wine taxes, the government thinks people will be boozing it up a bit more and anticipates a $16-million increase in revenue.
The treasury is also counting on $935 million more in “sales and rentals” from its plan to “maximize” the value of Ontario Power Generation (OPG), Hydro One and the LCBO, and also the possible sale of Ontario-owned General Motors shares.
The Jobs and Prosperity Fund will allow the government to dole out $2.5 billion to select businesses over the next 10 years. A recent example is last week’s $120-million grant to the country’s largest software producer, OpenText.
As previously announced, the government will retire the debt retirement charge on hydro bills as of Jan. 1, 2016, but with the end of the Ontario Clean Energy Benefit, average hydro customers will pay just over $120 more a year.
There are hydro cost breaks for low income families and for industrial users.
Ontario government plans to spend more than $130 billion over 10 years on infrastructure such as roads, bridges and public transit with new borrowing, redirected taxes and proceeds from high occupancy toll lanes.
- Ontario Pension Plan
New mandatory pension plan, like CPP, for more than 3 million working Ontarians
- Jobs and Prosperity Fund
$2.5-billion, 10-year fund to partner with business to promote job creation
- Debt Retirement Charge
Will disappear from hydro bills on Jan. 1, 2016, for savings of almost $70 a year
- End of Ontario Clean Energy Benefit
Will disappear from hydro bills on Jan. 1, 2016, for added cost of $180 a year
- Hydro price breaks
For low income families and industrial electricity users
- Road Construction
Hwy. 407 east phase, High Occupancy Vehicle lanes on highways 10/427, widening Hwy. 401 near Cobourg, widening Hwy. 69 between Parry Sound and Sudbury, realignment of Hwy. 66 through Virginiatown, expansion of sections of highways 11/17, realignment of Hwy. 7 between Kitchener and Guelph, expansion of Hwy. 427 from Hwy. 7 to Major Mackenzie Drive
- Tobacco Taxes
Up 1.6 cents per cigarette, jacking tax on a 200-cigarette carton to $27.95 from $24.70
- High Income Earner Tax Increase
A Personal Income Tax hike on taxable income over $150,000
- Low Income Families Boost
Tying Ontario Child Benefit to inflation, allowing more kids to access dental service and school nutrition programs, increase in social assistance
- Low Income Earners Make More
Hike in child-care workers/personal support worker wages and minimum wage
- Auto Insurance
Government encouraging insurance companies to offer “usage-based” rates
Are you satisfied with the budget?