2024 Ontario Budget: Building a Better Ontario

2024 Ontario Budget: Building a Better Ontario

Today, the Honourable Peter Bethlenfalvy, Ontario’s Minister of Finance, released the province’s 2024 Budget, Building A Better Ontario, a plan that highlights the government’s continued focus to implement its plan to build Ontario and introduce targeted measures for families and businesses.

As anticipated for a mid-mandate budget, the Ontario government is focusing on execution and demonstrating progress on its plan with new spending on targeted priority initiatives in infrastructure, health care, economic development, and labour.

Top Line Numbers

The 2024 fiscal outlook for Ontario has changed dramatically since the 2023 Budget and the Fall Economic Statement, with the government projecting a $9.8 billion deficit and a path to balance just before the 2026 election. The government attributes the increased deficit to slower growth, increased compensation costs, increased investments for infrastructure, municipalities, and key public services, as well as gas tax relief.

Key highlights include:

• For 2023–24, the government is projecting a deficit of $3 billion. The projected deficit is $9.8 billion in 2024–25 and $4.6 billion in 2025–26, with a projected surplus of $0.5 billion in 2026–27.
• GDP growth is projected to be 0.3 per cent in 2024, which is a decrease from the 1.3 per cent growth forecast in the 2023 Budget and 0.5 per cent in the 2023 Fall Economic Statement.
• GDP growth is projected to increase to 1.9 per cent in 2025, and to 2.2 per cent in 2026 and 2027.
• Revenues in 2023–24 are projected to be $204.3 billion, with the Budget citing declines in taxation revenue and Government of Canada transfers mostly being offset by gains in net income from Government Business Enterprises and other Non-Tax Revenue.
• Projected revenues have decreased from last year’s budget by $7.3 billion in 2024–25 and $8.5 billion 2025–26. The government points some of this decline to the federal government’s cap on international student study permit applications for two years, which will contribute to a decline in the Broader Public Sector Colleges revenue in 2024–25 and beyond.
• The 2023–24 total expense outlook is $207.3 billion, which is $2.6 billion higher than in the 2023 Budget. Total expense outlook is projected to grow from $207.3 billion in 2023–24 to $224.1 billion in 2026–27.
• ~The program expense outlook is projected to grow at an average annual growth rate of 2.4 per cent from $194.5 billion to $208.9 billion over the 2023–24 to 2026–27 period.
• Interest on debt is projected to increase from $12.8 billion in 2023–24, which is down from the $14.1 billion that was forecasted in the 2023 Budget. Interest on debt rises to $15.2 billion in 2026–27.
• At 38.0 per cent, the net debt GDP ratio in 2023–24 is forecast to be 0.2 percentage points higher than in the 2023 Budget, primarily due to a higher forecasted deficit and investments in infrastructure.

Read the full analysis here.