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The Review

Ontario Releases 2020-21 First Quarter Finances

Posted On: Wednesday, August 12, 2020

Ontario Makes $30 Billion Available in Response to Global Pandemic and Providing Municipalities with up to $1.6 Billion in First Round of Emergency Funding

Ontario Releases 2020-21 First Quarter Finances

August 12, 2020 11:00 A.M.

Ministry of Finance

TORONTO — The Ontario government is continuing to support the province's recovery from COVID-19 over the long-term while delivering on its commitment to transparency and accountability with the release of 2020-21 First Quarter Finances and an update to Ontario's Action Plan: Responding to COVID-19. To protect the health and economic well-being of the people of Ontario, the government continues to invest and budget for further contingencies in the fight against the COVID-19 outbreak, including providing support to families, businesses, workers, municipalities, long-term care homes and those on the front-lines of the pandemic. These investments bring the government's COVID-19 response action plan to a projected $30 billion, up from $17 billion announced in Ontario's Action Plan: Responding to COVID-19 on March 25, 2020.

"Dealing with COVID-19 wasn't a choice for any of us, but how we responded was," said Rod Phillips, Minister of Finance. "From the very beginning, we chose to do whatever was necessary to protect the people of Ontario from this pandemic and support them as they deal with the unprecedented impact on their lives."

Since announcing the first steps in the government's response to the global pandemic, the government is making additional investments in the fight against COVID-19, including:

  • An increase of $4.4 billion for a total of $7.7 billion to provide ongoing support for health care to build hospital capacity, prevent and contain the spread of COVID-19 in long-term care homes, ramp up testing and purchase personal protective equipment and critical medical supplies.
  • An increase of $7.3 billion for a total of $11.0 billion to support people and jobs, which supports investments in a temporary pandemic pay for more than 375,000 eligible frontline workers totaling over $1.5 billion, $4 billion in targeted funding to help municipal partners and transit agencies to continue to deliver critical services, and temporary immediate relief for residential, farm, small business, industrial and commercial electricity consumers.

The government is now projecting a deficit of $38.5 billion in 2020-21, which incorporates the most up to date economic information and additional supports for the pandemic recovery period and the safe restart framework. Private-sector forecasts, on average, project that Ontario's real GDP will decline by 6.6 per cent in 2020, down significantly from when the March 2020 Economic and Fiscal Update was finalized. Total revenue is projected to be $150.6 billion in 2020-21, $5.7 billion lower and program expenses are projected to be $13.1 billion higher than forecast in the March 2020 Economic and Fiscal Update.

When announced in March, Ontario's Action Plan: Responding to COVID-19 contained historic levels of prudence and flexibility, including a dedicated $1 billion COVID-19 Health Contingency Fund, a $2 billion Support for People and Jobs Fund, a standard Contingency Fund of $1.3 billion and an unprecedented reserve of $2.5 billion, the largest in Ontario's history. Given the continued economic and health uncertainty, the government has included additional prudence totalling almost $9.6 billion to ensure the Province is prepared for future scenarios stemming from the ongoing uncertainty of COVID-19.

While no economic downturn is the same as the last, it took between 24 and 88 months to return to pre-recession peak employment across the last three recessions. However, as Ontario gradually reopens, following the plan outlined in A Framework to Reopen Our Province, there have been recent signs of economic recovery. In June and July, Ontario's employment increased by 528,600 net jobs and the unemployment rate decreased to 11.3 per cent. Home resales in the province rose 56.6 per cent in May and 67.0 per cent in June, after declining for two consecutive months. Ontario manufacturing sales increased 17.5 per cent in May, while retail sales rose 14.2 per cent, after both declined for two consecutive months.

"From the outset, our government determined that putting public health first not only would save lives, but was the smartest economic policy," said Phillips. "The faster and steadier the progress to contain the outbreak, the sooner restrictions can be lifted so customers can return to businesses and employees can get back to work. While we still have a long road to recovery, defeating the virus is essential to getting our economy growing again and to ensure the long-term sustainability of the public's finances."

The Province's next fiscal update will be a multi-year provincial Budget, to be delivered no later than November 15, 2020. Ontario was the first in Canada to release a fiscal outlook that reflected the impacts of the COVID-19 crisis. This was a responsible approach that allows the Province to continue assessing the economic situation and provide transparency and accountability based on the most recent and reliable data available at the time.

 

Assistance Will Help Ensure the Delivery of Critical Public Services During COVID-19 to Ontario's 444 Municipalities

August 12, 2020 1:00 P.M.

Office of the Premier

TORONTO — The Ontario government, in partnership with the federal government, is delivering on its commitment to provide up to $4 billion in urgently needed one-time assistance to Ontario's 444 municipalities. Municipalities will be provided with up to $1.6 billion as part of the first round of emergency funding under the Safe Restart Agreement. This funding will help municipalities protect the health and well-being of the people of Ontario, while continuing to deliver critical public services, such as public transit and shelters, as the province continues down the path of renewal, growth and economic recovery.

Through the Safe Restart Agreement with the federal government, $695 million will help municipalities address operating pressures related to the COVID-19 pandemic through the first round of emergency funding, and over $660 million will support transit systems. The province is also providing an additional $212 million through the Social Services Relief Fund to help vulnerable people find shelter.

The details were provided today by Premier Doug Ford, Rod Phillips, Minister of Finance, Kinga Surma, Associate Minister of Transportation (GTA), and Jim McDonell, Parliamentary Assistant to the Minister of Municipal Affairs and Housing.

"Since the beginning of the pandemic, we have had the backs of our municipalities, which is why we are announcing up to $1.6 billion in critical funding today to help strengthen our communities and safely restart our economy," said Premier Ford. "This first round of funding will address the most urgent needs of our communities, ensuring critical services like transit and shelters are there when people need them most."

"Municipalities are on the front lines of a safe restart to our economy. That's why we're working with Ontario, and all the provinces and territories, to ensure communities have the support they need to help Canadians through the next phase of this crisis," said Prime Minister Justin Trudeau. "Here in Ontario, this funding will allow municipalities to offer critical public services, like public transportation and shelters, while they help protect against potential future waves of the virus. Building a stronger and more resilient economy that works for everyone starts with keeping Canadians safe and healthy. Together, we will build on the progress we've made, and put Canadians first as we gradually and safely restart our economy."

In Fall 2020, Ontario's 444 municipalities will receive $695 million in Phase 1 funding to help address municipal operating pressures related to the COVID-19 pandemic. This funding will be allocated on a per household basis and would be shared 50/50 between upper- and lower-tier municipalities. Up to $695 million in additional funding will be available through Phase 2 to eligible municipalities after municipalities have provided the province with information on their estimated COVID-19 related financial pressures.

"The success of Ontario's municipalities is vital to our province's economic recovery," said Parliamentary Assistant Jim McDonell. "We've been working in partnership with municipalities from day one to understand the financial impacts of COVID-19, and this historic agreement will ensure they have the funding needed to address their most urgent local priorities."

In addition to the support for municipalities, the government is providing over $660 million in the first phase of transit funding to the 110 municipalities with transit systems. The funding can be used to provide immediate relief from transit pressures, such as lower ridership, as well as for new costs due to COVID-19, such as enhanced cleaning and masks for staff. In the second phase, additional allocations will be provided based on expenses incurred to ensure the funding meets the needs of municipalities. As part of the Safe Restart Agreement with the federal government, up to $2 billion is being provided to support public transit in Ontario.

"Ontario's public transit systems are critical to supporting the economy and getting people where they need to go as the province gradually reopens," said Associate Minister Surma. "This historic agreement will help ensure that municipalities can continue to provide safe and reliable transit for the people of Ontario."

Ontario is also providing municipal service managers and Indigenous housing partners with an additional $212 million under the Social Services Relief Fund to help protect vulnerable people from COVID-19. This investment can help them protect homeless shelter staff and residents, expand rent support programming and create longer-term housing solutions. This brings the government's total Social Services Relief Fund investment provided to service managers and Indigenous program administrators to $510 million, and builds on the government's COVID-19 Action Plan to Protect Vulnerable Ontarians.

Quick Facts

  • The federal Safe Restart Agreement provides more than $19 billion to Canadian provinces and territories to help ensure a strong recovery and support frontline health care, families, and communities. Across all streams of federal investment, the Safe Restart Agreement provides over $7 billion in funding and in-kind supports to Ontario.
  • The agreement provides a total of up to $4 billion in funding to the province’s 444 municipalities and 110 public transit providers.
  • This includes up to $2 billion to relieve municipal financial pressures created by COVID-19: $777 million from the federal government and $1.22 billion from the province.
  • It also includes up to $2 billion for public transit, which will be cost-shared equally between Ontario and the federal government.
  • Throughout the COVID-19 pandemic, the Ontario government has worked with municipalities to provide them with the tools and supports they need, including enabling them to hold virtual council and local board meetings, and temporarily extending expiring development charge bylaws to ensure they could continue to collect this vital source of revenue.
  • In March, Ontario launched the Social Services Relief Fund with an initial $148 million investment to provide immediate financial relief. Those funds were crucial in slowing the spread of COVID-19. In July, an additional $150 million was committed to help improve shelters and create opportunities for longer-term housing. Today’s $212 million in funding brings the government’s assistance to service managers and Indigenous program administrators to $510 million.
  • Ontario invested $100 million to support extraordinary public health costs incurred in responding to the COVID-19 outbreak and in protecting Ontarians.
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