Ontario unleashes record spending for COVID-19 pandemic with $17B in emergency measures

The Progressive Conservative government has unleashed a $ 17 billion COVID-19 plan, plunging the province deeper into the red to tackle a virus that is ravaging Ontario’s health-care system.

Finance Minister Rod Phillips on Wednesday injected $ 3.3 billion more into health plus $ 3.7 billion for other supports and promised an additional $ 10 billion in tax deferrals, doubling the deficit to $ 20.5 billion. Last year’s budget shortfall was $ 9.2 billion.

But as doctors, nurses, and other front line workers strive to contain the virus, Phillips said it was urgent that he table the record $ 174.3 billion spending plan.

“COVID-19 is an extraordinary threat to the health and economy of Ontario — the greatest we’ve faced in my lifetime,” the 55-year-old treasurer told a legislature that was limited to 28 MPPs instead of the customary 124 members due to the need for social distancing.

“It demands an extraordinary response from all levels of government and civil society because we’re all in this together,” said Phillips, who cancelled the planned budget that was to have been delivered Wednesday due to a pandemic that has crippled the global economy.

A full budget complete with future projections will be tabled by Nov. 15. Because of the worldwide uncertainty, Phillips was unable to include any such outlook.

Premier Doug Ford, who had promised to balance the budget by 2023, stressed “these are unprecedented times” and the government will spare no expense.

“We will spend whatever it takes,” Ford told reporters.

To help families and businesses scrambling because of the outbreak, there will be $ 10 billion in tax deferrals.

These include deferring $ 1.8 billion in property taxes paid by individuals and businesses.

The employer health tax exemption (EHT) will temporarily be doubled to $ 1 million, which should help 57,000 small businesses — 30,000 of which wouldn’t pay the tax at all.

Phillips’ statement warned the government is taking a punishing revenue hit in many areas — the Ontario Lottery and Gaming Corporation, which generated $ 2.3 billion to provincial coffers last year is projected to bring in just $ 809 million in 2020-21.

That’s because COVID-19 has forced the closure of Ontario’s casinos.

Overall, the Tories are expecting $ 5.8 billion less in revenue than anticipated.

The financial statement sets aside $ 3.3 billion in new spending for health care, with two-thirds of it targeted at outbreak response measures.

That includes a $ 1 billion contingency fund to direct as needed depending on how hard COVID-19 hits the province as the government considers whether to put overflow hospital patients in hotels.

In addition, there is $ 160 million to boost lab-testing capacity and surveillance of the virus amid concerns Ontario has had to limit testing to the most serious cases and health-care workers.

“Help is on the way,” Prime Minister Justin Trudeau says in announcing the emergency response benefit that will provide $ 2,000 a month for four months for people who have lost their income because of COVID-19. The Canada Emergency Response Benefit combines two benefits announced last week to streamline application process.

Experts have warned that leaves many milder cases undetected as the number of confirmed cases alone rises about 20 per cent daily. The cases going undetected makes it impossible for local public health officials to track their close contacts and isolate them to slow the spread of the virus.

Home testing kits will be provided when they become available, said the financial statement that also sets aside $ 935 million to improve capacity in overcrowded hospitals with more acute- and critical-care beds.

Nursing homes, which are full of frail elderly people highly vulnerable to the virus and the most likely to become seriously ill, will share $ 243 million to boost their emergency capacity and implement more virus containment measures.

Another $ 80 million is going to nursing homes to maintain “quality” of care with staff expected to be overworked amid outbreaks that have already hit a number of long-term care facilities and resulted in several deaths.

Given fears that health-care workers are running low on personal protective equipment, an extra $ 75 million has been earmarked — along with $ 120 million for improvements to home and community care and another $ 62 million to hire more doctors, nurses, and personal-support workers.

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Mindful of the importance of social distancing, the province will spend $ 23.8 million to boost the number of doctors seeing patients by video or helping them via email or phone.

There will be one-time payments to families of $ 200 for every child under the age of 12. Parents of special-needs kids will receive $ 250 per child as part of that $ 336 million program.

College and university students will also get a six-month break in repaying their Ontario Student Assistance Program (OSAP) loans — a move that follows a similar interest-free period announced by the federal government last week.

OSAP loans comprise both federal and provincial monies, and post-secondary groups have been worried about the impact of COVID-19 on students and how they can continue to make payments during mass shutdowns.

Given the economic uncertainty and job losses in the province, post-secondary students have also been urging governments to enact a two-year moratorium on interest payments for anyone graduating this year.

While Phillips praised the New Democrats, Liberals, Green, and Independent MPPs for agreeing to expedite passage of his bill, he ignored some of their recommendations for the statement.

NDP Leader Andrea Horwath had called for immediate $ 2,000 payments to households facing pandemic-related economic hardship.

“I am urging the government to regroup, and put together a direct financial support package for people, and for small- and medium-sized businesses. Many Ontarians are at their financial breaking point,” said Horwath, noting rent and mortgage payments are looming.

Liberal Leader Steven Del Duca, meanwhile, had urged the Tories to consider matching the federal 10 per cent wage subsidy to help workers and their employers.

“We know that if we do nothing, more workers will soon find themselves laid off,” said Del Duca, adding “most of what’s been announced today is in the form of deferrals, which suggests that businesses will be required to pay what they owe in six months.”

In the fact of such criticism, Phillips struck a non-partisan tone.

“As the premier has said there is no team blue, team orange, team red or team green — there is only Team Ontario,” said the treasurer, whose fiscal update was a serious, sharply focused affair.

It came in stark contrast to last year’s controversial $ 163.4 billion budget that unveiled the defective double-blue Ontario licence plates, which are illegible in some lighting conditions, and a slew of hidden cuts, including to municipal public health funding.

Ford was so unhappy with the 2019 budget that he demoted treasurer Vic Fedeli to economic development minister just 10 weeks later after being forced to abandon some of the key planks in the spending plan.

The legislature, which is supposed to be in session now, will now break until April 14.

Robert Benzie
Robert Benzie is the Star’s Queen’s Park bureau chief and a reporter covering Ontario politics. Follow him on Twitter: @robertbenzie
Rob Ferguson
Kristin Rushowy

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