Is the Ontario 2023 Budget really 'working for you'?
Seven key takeaways you won’t hear in the talking points
1) Medical care bullies investments in the wider determinants of health
Medical care continues to be the big winner (or big bully?) in the Ontario budget. At over $87.6 billion in annual spending by 2025, medical care receives more spending than child care, education, social services, and housing combined. Annual spending on medical care will rise from $74.9 billion in 2022 to $87.6 billion in 2025. That $12.7 billion annual increase in the budget for medical is as large as the entire budget for postsecondary.
As Ontarians struggle with long wait times and not enough access to doctors, it makes sense to inject some new funds into our medical system. But what the Ontario Budget overlooks is that medical care accounts for only 25% of our health. Medical care was never supposed to go it alone – it’s meant to be part of a wider system supporting people with the things they need for good health, like decent earnings, homes, child care, and a sustainable planet.
We’re grateful that we can call on the fire department to put out the flames when we need them, but preventing fires is much less deadly, damaging and costly. So it is with health care. Waiting to invest until people are ill is like showing up with hoses once the fire is already raging. We need to prevent sparks from getting out of hand. This means clinics and hospitals should be the last stop, not the first stop, in our health system. The first stops for good health are found in our neighbourhoods, jobs, child cares and schools – something the pandemic made painfully clear.
So long as we fail to slow the flow of sickness into our hospitals and clinics, we’ll continue to burn out doctors and nurses. Alas, Budget 2023 strayed from the wisdom that “an ounce of prevention is worth a pound of cure.” That’s why it won’t be enough to help Ontarians Get Well.
2) Medical care spending has unacknowledged age and generational implications
Big increases to medical care spending drive generational tensions in the budget.
It’s a biological reality that we use more medical services when we’re older. Canadian Institute for Health Information data show that Ontarians age 1-24 consume around $2,000/year in medical care. This increases to $3,000/year for those age 35-39. Those aged 65-69 use $7,500 of medical care each year, while it’s over $25,000 annually for those age 85-plus.
This means that allocating the largest new spending increases to medical care creates stark age patterns. By 2025, Ontario will add approximately $2,500 in new provincial funding for every resident age 65+ compared to just $1,200 per person under age 45 – even when counting all of the new federal funding for $10 a day child care.
For Ontarians who want to know more about how the province invests across age groups, they can’t count on their provincial budget to deliver this information. While the 2023 Budget provides access to information about spending, economic growth, debt and deficits, it fails to adequately break down the budget numbers by age. As a result, Ontarians and their MPPs are unable to assess whether the province is budgeting fairly for young and old alike – leaving Gen Squeeze to crunch the numbers after budget decisions have been made. Worse still, we must perform this work with much less transparency in Ontario budget numbers by comparison with what is available in BC budget.
3) Climate change… where are you?
Climate change puts the health and economic wellbeing of younger and future generations in jeopardy. Yet, the phrase is mentioned just once in the 186 page budget.
Yes, the budget gives attention to clean energy and conservation. But when the World Health Organization identifies climate change as the greatest threat to human health in the 21st century, it is worrisome to see the Ontario budget go to such lengths to avoid using this phrase.
4) Leaving bills unpaid… even outside of a recession
Even though Ontario is not in a recession, the province is still planning to run modest deficits in 2022 and 2023.
By 2024, the Budget projects a surplus of $200 million, followed by a surplus of $4.4 billion the next year. Thanks in part to this anticipated return to surplus, Budget 2023 adds only modestly to the amount provincial debt shouldered by each resident under age 45. This debt will rise from ~$47,000 per younger person in 2022 to $47,200 by 2025.
It’s important to slow the growth in debt left for younger residents, because interest payments on the Ontario debt are already the fourth largest expenditure each year. For example, Budget 2023 shows that government interest payments on the provincial debt will be $15.1 billion as of 2025 – that’s over $2 billion more than total annual spending on postsecondary ($12.9 billion) in the same year.
5) Riding Ottawa’s coattails on child care
Ontario continues to accept large amounts of federal funding for $10/day child care. But Budget 2023 makes it nearly impossible to evaluate whether the province is adding any of its own funding.
Gen Squeeze branded ‘$10 a day’ over a decade ago to insist that child care shouldn’t cost another rent or mortgage sized payment. As housing prices remain high, families need all the help they can get to keep living costs manageable. That’s why $10 should be the maximum fee, not just the average. With Ottawa doing the heavy financial lifting, it’s disappointing Ontario doesn’t invest some provincial tax revenue to ensure that fees don’t rise above $10 a day – as Manitoba recently promised.
6) Housing Ministry budget down despite Ontario’s ongoing affordability crisis
Average home prices in Ontario remain far higher today than when Premier Ford took office. Canadian Real Estate Association data show that average home prices in 2022 were $932,000, compared to $648,000 in 2018, after adjusting for inflation. It took 15 years of full-time work for the typical young Ontarian to save a 20% down payment on an average priced home when Mr. Ford became Premier. Now it takes 22 years.
Unsurprisingly, housing affordability remains central in Budget 2023 – and there’s some good news. The non-resident speculation tax will rise to 25%, and will be applied province-wide. This will offer a larger deterrent to those seeking to park global capital in Ontario housing than the 20% foreign buyers’ tax in BC.
Budget 2023 also adds $45 million for a “Streamline Development Approval Fund” to continue with the Ford government’s intention to accelerate and incentivize municipalities to approve new developments more quickly.
Given the ongoing housing unaffordability crisis in Ontario, it’s surprising to see that the budget for Municipal Affairs and Housing will drop from $3.7 billion in 2020 to $1.45 billion in 2023 (Table 3.11). The budget boasts about adding $202 million a year for homelessness prevention, but this figure is part of a declining overall budget for this Ministry.
The housing Ministry budget is also tiny by comparison with the $87.6 billion received annually by the Minister of Health – even though a safe, warm home is a critical determinant of health! It’s also surprisingly low given that Ontario’s land transfer tax is anticipated to collect $3.5 billion in revenue in 2023 (Table 3.10).
Equally worrisome, Budget 2023 doesn’t disrupt Ontario’s addiction to high and rising home values. Page 120 states “Average home prices are expected to decline 9.7 per cent in 2023, before prices stabilize and rise 2.2 per cent in 2024 and further rebound in 2025 and 2026.” It is alarming to see the province plan around rising home prices when they are already so far out of reach from what hard work can earn. Especially when two-thirds of Ontarians support the idea that “To restore affordability for all, we need home prices (minimally) to stall, so that earnings can catch up.”
While the provincial government is quick to ask Ottawa for more funds under the National Housing Strategy (see p. 84), it misses an opportunity to urge the federal government to make a systemic change that would cost almost nothing. Budget 2023 doesn’t commit the Ontario government to urging Statistics Canada to fix its inadequate measure of housing inflation. Had Stats Canada reported accurately on housing inflation years ago, we could have recognized the perils of runaway prices sooner, sparing younger generations the burden of coping with soul-crushing levels of unaffordability.
7) Ontario lags behind on transparency and accountability
Many Canadians are concerned right now about the prospect that foreign interference is compromising the integrity of our democratic institutions – and rightly so. But the Ontario budget demonstrates why we might also raise questions about the transparency and accountability we should expect right here at home, from our own governments.
At Gen Squeeze, we analyze a lot of budgets. Compared to other jurisdictions, the budget tabled by the Ontario government provides far less information about historical and planned spending, how funds break down by key program areas, or even the population projections on which planning is based! On top of that, the budget process makes far less space for organizations like Gen Squeeze which analyze public finances to access the information in advance, as is done in other provinces. It’s not good for our democracy when governments aren’t open and transparent. Ontarians should expect more.
Check out our Budget Analyses for our take on other provincial spending plans and the upcoming federal budget.