November 2, 2023
Today, November 2, Minister of Finance Peter Bethlenfalvy released the 2023 Ontario Economic Outlook and Fiscal Review: Building a Strong Ontario Together.
See below for a summary of the highlights.
Ontario Infrastructure Bank
- The establishment of a new board-governed agency to enable public-sector pension plans and other trusted institutional investors to participate/invest in large-scale infrastructure projects across the province.
Removing HST on Purpose-Built Rentals
- The Ontario Government is removing the provincial portion (8%) of HST on purpose-built rentals; which includes apartment buildings, student housing, and senior residences built specifically for long-term rental.
Invest Ontario Fund
- An additional $100 million is being put into the Invest Ontario Fund to attract more leading companies to the province and further support businesses already here.
Ontario Focused Flow-Through Share Tax Credit
- Enhanced eligibility to help stimulate critical mineral exploration and improve access to capital for small exploration companies. If approved, the change would start with the 2023 tax year and add $12 million per year in tax credit support to Ontario’s critical minerals mining industry.
Housing – Enabling Water Systems Fund
- $200 million is being invested into the Enabling Water Systems Fund to help get new water and wastewater systems set up to aid in building new housing units more efficiently.
Gas and Fuel Tax Cuts
- A proposed change that, along with the rate cuts already in place, would save households $260 on average since the cuts were first implemented in July 2022.
The economy continued to grow in the first half of 2023, propped up by consumer spending and exports, and strong gains in the job market. There were 4,400 more businesses created in the province compared to this time last year, and since January there have been 170,000 new jobs. Despite stronger than expected growth, the economy has slowed in recent months and is expected to slow further amid high inflation, interest rate hikes, and a cooling global economy. Growth in real GDP is projected at 1.1% in 2023 before slowing to 0.5% in 2024 and then rebounding to 2% in 2025. Accompanying this slowdown are lower government tax revenues and thus larger deficits than previously stated.
The province is projecting a deficit of $5.6B in 2023-24 (instead of the $1.3B deficit projected from the 2023 Budget), a $5.3B deficit in 2024-2025, before achieving a surplus of $0.5B in 2025-2026.
Record breaking population growth means communities need more infrastructure. In order to support economic growth, create jobs, and address Ontario’s infrastructure deficit, the government reiterated its capital plan ($185B over 10 years), which includes infrastructure projects such as hospitals, highways, transportation, and other critical assets.
Part of this plan includes the launch of the Ontario Infrastructure Bank, which will enable public-sector pension plans and other trusted institutional investors to participate in large-scale infrastructure projects. Initial investments are expected to be in new long-term care homes, energy infrastructure, affordable housing, municipal and community infrastructure, and transportation.
A new House-Enabling Water Systems Fund was also announced, totaling $200B over three years to support the development of water infrastructure necessary for new housing. This is in addition to the recently announced Building Fast Fund, $1.2B over three years to support housing and housing enabling infrastructure.
Ongoing highway projects include Highway 413, Bradford Bypass, Highway 401 widening, QEW Skyway Twinning, New Highway 7, Highway 3 widening, and various highway projects in Northern Ontario.
In September 2023, the government proposed Bill 131, the Transportation for the Future Act, which proposes a “new, voluntary funding tool for municipalities” which “could be used by municipalities to fund the design and construction of new GO stations and recoup costs over time as new development occurs around them, encouraging new housing and mixed-used communities”. Upgrades to numerous GO-Stations and subway lines also continue, such as the Ontario Line and Yonge North Subway Station.
Indigenous Transportation Initiatives also continue, with the government “providing up to $584,000 to nine Indigenous organizations and communities to help support economic development, mobility, and transportation safety”.
Hospitals and Long-Term Care
Several new facilities opened including Southbridge Cornwall (April 2023), Stoneridge Manor (May 2023) in Carleton Place, Humber Meadows Long-Term Care Home (June 2023) in North York, Brightshores Health System – Markdale Hospital (Sept 2023), and Ritz Lutheran/West Perth Village (Oct. 2023) in Mitchell. Additionally, construction began in the summer on the New South Niagara Capital Project.
Ontario Place Redevelopment
The redevelopment of Ontario Place is expected to create up to 5000 construction and operation jobs. In Fall 2023, construction commenced for upgrading and repairing the existing infrastructure, which has not been updated in 50 years.
To see the full 2023 Ontario Economic Outlook and Fiscal Review click here.