Pre-Election Fall Economic Statement Analysis

Insights /

Pre-Election Fall Economic Statement Analysis

This afternoon, Minister Bethlenfalvy, Ontario’s Minister of Finance, tabled the 2021 Fall Economic Statement (FES) entitled, “Build Ontario”. This economic and fiscal review provided an update on the province’s finances and laid out the policy roadmap for the next 7 months prior to the election. The government is projecting a deficit of $21.5 billion, which is $11.6 billion lower than the outlook published in the 2021 Budget. This FES lays out the government’s plan for recovery, both by spurring the economy through investments in infrastructure and labour reform and by protecting the progress we have made against COVID-19 to date.

The Fall Economic Statement is largely focused on investments in health care and long-term care, infrastructure, labour reform and economic recovery post-COVID-19. It also continues this government’s previous trend of turning Fall Economic Statements into “mini budgets”, whereas previous governments simply used it as a fiscal update.

With a looming provincial election set for June 2, 2022, the Government of Ontario is attempting to position itself among key stakeholders and temper criticism from opposition. Premier Ford faced waning support throughout COVID-19 and is focused on re-gaining ground with voters, and particularly voters in the service industry who were alienated during the pandemic. Polling from February 2021 had the PC party with a commanding lead, while May 2021 saw those numbers erode when the province was in a months-long lockdown and vaccine rollout was slow. While the Premier’s support has increased since May, this FES lays out the policies, initiatives, and investments that he hopes will help him lead his party to victory in June 2022 as well as neutralize and marginalize the opposition Liberals and NDP.

The government outlined three core values that we can expect to see a lot more of before the next election: Protecting our Progress, Building Ontario and Supporting Workers.

Health Care and Long-Term Care:

The COVID-19 pandemic exposed fatal flaws in both our health care system and our long-term care system. Ontario’s health care system was wildly unprepared for a pandemic. From a lack of PPE to a shortage of ICU beds, the government is investing in the system to ensure we never face these problems again in the future.

Ontario’s long-term care system saw thousands of deaths that could have been prevented if proper investments been made in Long-Term Care homes before we got to this point. The government has recently made announcements on long-term care reform, including developing new homes and redeveloping old homes to reduce wait times, hiring thousands of PSWs and improving their working conditions, and improving infection control protocols and standards across all long-term care homes.

Health care and long-term care will be one of the key issues in Ontario’s 2022 election. So far Premier Ford has escaped the majority of the blame for the health care and long-term care disasters, but it is still a risk they need to protect themselves from against opposition parties in the upcoming election. You can bet the Liberals and NDP will bring these issues to the forefront of the public debate.

Health Care:

  • 1B to support the roll-out of Ontario’s COVID vaccination plan
  • 342M to strengthen the nurse workforce
  • 6M in 2022 to hire 225 nurse practitioners in long-term care
  • 548M over three years to expand home and community support care
    • 5,000 new and upskilled nurses and registered nurses
    • Hire 8,000 personal support workers

Long-Term Care

  • 2M over 3-years to hire additional long-term care inspectors
  • 7B starting in 2024 to build 10,000 new beds and update 12,000 outdated beds
  • 22M to implement a technology to integrate information between hospitals and long-term care homes
  • 35M to extend the Seniors Home Safety Tax Credit
  • 17M over two years to increase seniors access to dental services

Mental Health

  • 4M over 2-years to ensure healthcare workers have access to mental health services
  • 7M to increase mental health services in post-secondary education

Infrastructure:

Infrastructure spending is a key pillar of the government’s economic recovery strategy. They have committed to economic recovery in the province without raising taxes – instead they will focus on economic growth. Infrastructure spending in Ontario will create jobs, spur economic growth and help the province recover from the devastating impacts of COVID-19.

  • 6B to expand and repair highways
  • 474M over 5-years to address bridge rehabilitation
  • 345M invested in municipal transit systems
  • 5B in subway extension
  • 5M for feasibility work on a proposed service route in Northern Ontario
  • 2B over 10-years in infrastructure to build new capacity in hospitals, build new health care facilities and renew existing hospitals
  • Doubling the Ontario Community Infrastructure Fund, bringing the total to 2B over next 5-years

Labour Reform:

The government has recently made a slew of announcements pertaining to the labour force in Ontario that reflect changing workplace attitudes and cultures post-COVID-19. They are also appealing to Ontario unions in the lead up to the election. The government is increasing the provincial minimum wage to $15 per hour effective January 1, 2022; Minister McNaughton, the Minister of Labour, Training and Skills Development, has also introduced legislation that would promote a healthy work-life balance and further enable competitiveness by banning certain non-compete agreements. We can expect the government to tout these efforts in the upcoming provincial election as part of their broader narrative and strategy on attracting and retaining workers in Ontario.

  • Additional 90.3M over 3-years to enhance the Skilled Trades Strategy
  • 5M to expand the Second Career Program to extend support to newcomers, gig workers and those with disabilities
  • Extended the Jobs Training Tax Credit by 275M
  • Launching a Small Business Digitization Action Plan to help small businesses leverage online platforms
  • 40M over 2-years to enhance the Digital Main Street
  • 10M over 2-years to create a Small Business Digitization Competence Centre
  • 25M over 3-years in a new Strategic Agri-Food Processing Fund
  • Introducing an Ontario Staycation Tax Credit – 270M for 20% of expenses incurred by travelling inter-provincially.
  • 40M invested into an Advanced Manufacturing and Innovation Competitiveness Stream to help businesses improve competitiveness, growth, and job creation

Economic Recovery:

The COVID-19 pandemic had devastating impacts on Ontario’s economy. In 2020, Ontario witnessed a steep decline in real GDP growth (-5.6 per cent). For over a year, the government was solely focused on protecting Ontarians through emergency health care spending. Now that we’re through the worst of the pandemic, the government is shifting its focus to economic recovery and growth. It was predicted earlier this year that Ontario would see a moderate rebound of 4.8 per cent GDP in 2021. Part of this is a natural rebound due to the reopening of the economy. However, there is still a long way to go and there is a part for this government to play in stimulating economic growth.

  • COVID-19 related funding will likely be fully phased out by 2023
  • Ministry of Finance expects 500,000 new jobs will be created by 2024

The government is using this Fall Economic Statement and will use the upcoming March Budget to pressure test certain policies and narratives before they enter the election period. This means we will see a number of policies aimed at making amends with stakeholders who have been hurt by government policy over the last year and winning over voters from across the aisle.

Cumberland Strategies is a leading public affairs, government relations and strategic communications firm with decades of experience advising Canadian and multinational blue-chip corporations. Led by some of the country’s brightest public affairs minds, Cumberland brings intelligent strategic thinking to every project and campaign, ensuring successful outcomes for clients.