The Government of Ontario has launched its latest budget, a plan that covers a record deficit as the province struggles with COVID-19 and provides a basis for economic recovery.
Ontario, the center of industry and manufacturing in Canada, budgeted Total spending this year was 187 billion with a deficit of 38.5 billion. The budget does not provide a way to balance it as many typical provincial budgets do, although the government says it will be included in next year’s budget.
When it comes to adjusting spending plans in the legislature, Treasury Secretary Rod Phillips said the budget will “provide as much certainty as possible during these changing times.”
“There is still a lot of uncertainty in the global economy, and so do the Ontario budget as well as the home and business budgets,” Phillips said.
The government says it is increasing the size of the action plan for COVID-19 to $ 45 billion over the next three years. That expense, plus the tax loss, is leading to a higher deficit.
The budget includes money to increase health workers salaries and enhance safety at schools. The government is also making another direct payment to parents, 200 to 250 dollars per child, a measure that would cost 380 million dollars.
Earlier this week, the Ford Prime Minister’s government said it would provide $ 300 million to businesses in regions forced to return to the revised Phase 2 last month, and active ones. in the sectors subject to the two most severe restrictions under the new five-tier system. Measures include property tax and energy cost reductions.
With the uncertainty of the economic recovery, Phillips is coming up with two alternative scenarios for his outlook. Under the optimistic government scenario, the budget deficit for the next fiscal year will be $ 27.7 billion. Its pessimistic scenario would show a shortage of up to $ 35.6 billion.
Ontario’s net debt to gross domestic product ratio is expected to rise to 47% by the end of March, up from 39.7% at the end of March 2020 and will be close to 50% by 2023.
But the average loan rate is expected to drop to 1.6% this fiscal year, helping to mitigate the impact.
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