UPDATE: Ontario introduces $17B COVID-19 package; more than doubles deficit
The Ontario Government will plunge deeper into deficit to pay for its $17 billion financial response to the COVID-19 outbreak, it announced in a fiscal update Wednesday.
The provincial deficit is now expected to go from $9.2 billion in 2019-2020 to $20.5 billion in 2020-2021.
“We are confident that every dollar we invest to save a life or save a job, is a dollar well-invested,” Finance Minister Rod Phillips said in the legislature.
$7 billion is being spent on increased health care spending, as well “People and Jobs” cash flow, which includes measure including one-time payments for parents, credits for seniors and OSAP holders and emergency child care for front line workers.
The remaining $10 billion is focused on payment deferrals, including $6 billion for five months of interest and penalty relief to businesses to file and make payments for most provincial taxes.
The government is projecting a $5.8 billion revenue impact in 2020-2021, including OLG revenue to go from $2.3 billion to $809 million.
HEALTH CARE $3.3 billion
The five per cent increase in health care spending includes nearly a billion for accelerating capacity in hospitals, including setting up 1,000 acute care beds and 500 critical care beds as soon as possible.
With lab testing under the microscope in recent days, $160 million is being spent on COVID-19 monitoring, testing and Telehealth.
There’s also $62 million to provide more doctors, nurses and personal support workers, $75 million for PPE and other supplies and a $1 billion contingency fund for future problems.
PEOPLE AND JOBS $3.7 billion
Parents will receive one-time payments of $200 per child up to 12 years old to help with child care, with an increase of $250 for kids with special needs and those in private schools.
An online portal is expected to be set up April 6th for parents to apply for the funding, which should arrive the same month.
Many of the decisions around what kind of direct payments would go to Ontarians, were based upon the federal government’s measures on direct payments, EI and its recent Canada Emergency Response Benefit.
Emergency child care is being provided for front line workers, while the GAINS payment for low-income seniors will double for six months.
The government is also providing a $355 million tax cut for 57,000 employers though a temporarly measure called the Employer Health Tax exemption.
Other measures include $148 million for charities and non-profits, as well as six months OSAP land loan and interest accrual relief.
TAX AND OTHER DEFERRALS $10 BILLION
The largest individual chunk comes from $6 billion as businesses will be given a five-month interest and penalty relief deferral to file and make payments for most provincial taxes.
But the government is also offering powers to municipalities by deferring upcoming education property taxes to schools boards by 90 days.
The $1.8 billion cost will allow cities the flexibility to allow their own deferrals to residents and businesses on property tax payments.
The remaining 1.9 billion will come from WSIB allowing employers to defer payments for up to six months.