Ontario Fall Economic Statement, 2023

On November 2nd, 2023, Minister of Finance, Peter Bethlenfalvy, presented the government’s 2023 Fall Economic Statement (FES), entitled Ontario Economic Outlook and Fiscal Review: Building a Strong Ontario Together. 

The FES represents a continuation of many of the government’s priorities and efforts throughout their time in office, and builds off key themes contained within Budget 2022 and Budget 2023. The government is focused on addressing ongoing economic uncertainty by attracting investments and creating jobs, building critical infrastructure, and improving government services for Ontarians. 

Key Priorities

The Ontario FES 2023 is centered around the two key themes: the first is  “Building Ontario,” and the second is “Working for You.” Within these two overarching priorities, the FES breaks down into four key pillars:

1. Keeping Costs Down
2. Working for Workers
3. Better Services for Ontarians
4. Building Ontario
   

Within these four pillars, the government announced several notable policies, including: 

1. Removing the 8% provincial portion of HST for new purpose-built rental housing to enhance the availability of housing for Ontarians. 
2. Extending the removal of the gas tax to support increased affordability in Ontario. 
3. Creating a new permanent framework for target benefits in skilled trades ensuring retirement security to advance employment in the trades. 
4. Lowering the age for breast cancer screening to 40 years old. 
5. Providing an additional $12 million per year in tax credit support to the critical minerals mining industry to encourage more critical minerals exploration. 
6. Creating the Ontario Infrastructure Bank to invest in infrastructure projects related to energy generation, municipal and community infrastructure and affordable housing. 

Additionally, the Ontario government announced that the plan to balance the budget has been delayed by a year, with a return to balance by 2025-26. 

What is the Government Saying?

“The choice for the road ahead is clear. We must continue with our government’s targeted approach – it has the flexibility we need while still investing to build the critical infrastructure to support growing communities across Ontario… The road ahead is not going to be easy, but we have seen what the people of Ontario can accomplish together… Together, we can face the uncertainty of today and build a strong Ontario.” – Peter Bethlenfalvy, Minister of Finance

What is the Opposition Saying?

“At a difficult moment like this, I expected bigger things from an economic update… we need real measures to invest in public services and make people’s lives easier. All people got today from Ford was more of the same. People have lost trust in this government, and after seeing today’s budget – I can see why.” – Catherine Fife, Ontario NDP Finance Critic 

Our Analysis

This year’s FES makes a clear statement about where the Ontario government sees the economy, and where they want it to go. The government is acknowledging that the Ontario economy is still in an uncertain time with high housing costs, a lack of critical infrastructure in some communities, and slowed economic growth. Within the 2023 FES, the current government is attempting to find a balance between building a strong fiscal foundation for future generations while also meeting campaign promises of improving housing availability, improving infrastructure, and investing in industry. 

Ultimately, while the focus is slightly different, the FES is largely a continuation of the previous Budget. The FES has very similar goals of investing in healthcare and the skilled trades, and the continued goal of maintaining a “path to balance.” The themes highlighted within the FES, such as ‘working for workers’, ‘keeping costs down’ and ‘building Ontario’ are familiar from the 2022 election campaign and other recent fiscal updates. We can expect the Government to continually hammer on these themes as they begin to craft and shape a re-election narrative. 

This year’s FES includes increased expenditures on infrastructure, specifically through the new Ontario Infrastructure Bank, and has an updated path to balance reflective of increased fiscal pressures. 

With the creation of the Ontario Infrastructure Bank, a new, arms-length, board-governed agency, the government is signalling its interest in investing in communities to help drive economic growth. This bank will have an initial $3 billion in public funding which will go towards projects such as long-term care homes, affordable housing, energy generation, community infrastructure, and other new projects. This is a clear indication that the province is taking proactive steps to increase the investment in infrastructure, which plays a major role in driving economic growth while creating tangible change in communities across the province. 

In recognition of new fiscal realities, the Ontario Government has delayed their path to balance by one fiscal year. The Ontario Government is now projecting they will reach their goal by the 2025-26 fiscal with a $0.5 billion surplus. Politically, the Government will continue to position themselves as the responsible fiscal managers, in comparison to the opposition parties, the province needs during these uncertain and challenging economic times. They will also continue to tout their investments in key priorities like health and education as well as their record spending on needed infrastructure projects.  

As the government looks to pass the Fall Economic Statement through the legislature and kick off its 2024 budget consultation, continue to check back here to get the JB+A team’s insights and analysis on what to expect.