Putting a Peterborough lens on provincial Budget 2017

The fact that the Ontario Budget for 2017-2018 is a balanced budget is one of the forefront messages in the recently released document.  However, a balanced budget is commendable, especially since it’s the first balanced budget since the recession doesn’t erase the debt the province has accumulated and will still require payment to service. 
 
“Budget 2017 demonstrates that much of Ontario’s fiscal outlook will depend on the prosperity of our private sector,” said Richard Koroscil, Interim President & CEO, Ontario Chamber of Commerce (OCC). “The government acknowledged that business investment spending slowed in 2016, though expects firms to increase investment by 3.1 percent, annually, to 2020 – an amount that would outpace growth in real GDP growth and household spending. These assumptions depend upon business confidence – which has fallen precipitously in recent years according to the Ontario Economic Report – and U.S. demand, which is subject to considerable risk given recent comments by American President Donald Trump.”

On the positive side, a balanced budget does allow the government more flexibility in program funding and that is seen in the budget.  “Peterborough is well served by this budget,” Hon. Jeff Leal, Minister of Agriculture, Food and Rural Affairs and Minister Responsible for Small Business told me in a phone call hours after the budget. “The investment in pharmacare for children will help fill a gap for those without full benefit packages and allow parents to put that money to other uses, while continued investment in the Red Tape Challenge will help reduce the regulatory burden for small business.”

With 93% of Peterborough Chamber membership falling into the small business category of 100 employees or less it is good to hear the commitment to this program reiterated.  The Chamber is also pushing for a Red Tape Challenge analysis of the small business sector as a whole.  

When asked how he would describe the budget in one sentence Minister Leal replied, “building for tomorrow.” 
The private sector has had a positive impact on the economy and demonstrates a clear commitment to good jobs throughout our province.  98% of all new jobs since the recession in Ontario have been full time, and 78% in above-average wage industries.  

The OCC released its analysis of the budget shortly after the document was delivered at Queen’s Park.   Picking up on their highlighted areas, what does the budget mean for Peterborough?
 
Infrastructure
In Budget 2017, the Government indicates it will invest $13.5 billion through Moving Ontario Forward to enable faster and more frequent service on the GO network and Union-Pearson Express In addition, the Government announced that funding for the Connecting Links program will increase to $30 million per year by 2018-9. 

• OCC Analysis

In our 2017 Pre-Budget Submission, we called for a one-time, $30-million enhancement of the Connecting Links fund as a transitional measure to assist affected communities in addressing the two-year gap in which the program was discontinued. We are pleased to see that investment will be made beginning 2018-9. However, the OCC expected to see more dedicated infrastructure investment announcements, particularly outside of transit and roads.

• Peterborough Analysis

Increased funding for Connecting Links is a positive move. In the past the townships of Havelock-Belmont-Methuen and Norwood-Asphodel have received funding because their main street is a piece of Highway 7.  However, infrastructure needs in the City and County are still significant and will continue to challenge municipalities in the future.   The Peterborough Chamber looks forward to seeing the province’s Long Term Infrastructure Plan which will be released by the end of 2017.

Business Growth Initiative
The Business Growth Initiative was announced in Budget 2016 as a plan to support Ontario’s transition to a new economy. Budget 2017 includes an expansion of the BGI by $650 million over five years.

• OCC Analysis

The OCC is encouraged by the Business Growth Initiative and welcomes further investment in the plan. The challenges faced by small businesses seeking to scale into medium- and large-sized firms is one we identified in Breaking Barriers: Ontario’s Scale-Up Challenge.

• Peterborough Analysis

Entrepreneurship is a designated pillar in the Peterborough Economic Development Strategic Plan, the focus of the Innovation Cluster and other groups such as Start Up Peterborough.  To see the government’s plan to invest in areas of advanced computing, artificial intelligence, 5G and autonomous vehicles gives entrepreneurs direction to focus their efforts in many sectors.

Cap and Trade​
In Budget 2017, the Government indicates it is working on a separate system of Ontario-based voluntary carbon offsets to support the government’s carbon-neutral commitment. The proceeds of the carbon allowance auctions are expected to be $1.8 billion in 2017-8 ($1.9 billion was projected) and $1.4 billion in 2018-9. Projected spends of those proceeds include:

• $800 million towards helping homes and businesses adopt low-carbon technologies
• $55 million towards municipal partnerships to achieve emission reduction targets
• $420 million towards modernizing transit towards low-carbon goals (i.e. rail, cycling infrastructure)
• $410 million towards implementation of Green Investment Fund initiative

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• OCC Analysis

The OCC has become increasingly concerned that increased input costs imposed on the private sector mean that Ontario risks losing out on jobs and investment. However, we are encouraged that the government has developed a plan for the next two years of carbon allowance auction proceeds.

• Peterborough Analysis

As a community that is very connected to nature the cap and trade program has been challenging.  There is still a lot of uncertainty amongst the Peterborough Chamber membership as to whether or not this is the best program for business and to achieve the overall goal of GHG emission reduction targets.  We look forward to hearing more about how businesses of all sizes and across all sectors can access funding.  

Financial Literacy and Skills for the Knowledge Economy
In Budget 2017, the Government reiterated its support for injecting financial literacy into the secondary school curriculum. In addition, the Government has committed to invest nearly $190 million over three years in the Career Kick-Start program which will create more opportunities for high school and post-secondary students, along with recent graduates, to develop job relevant skills.

• OCC Analysis

We support government’s efforts to modernize the secondary school curriculum and provide students with hands-on opportunities to develop the skills they need to compete and succeed in a technology-driven, knowledge-based and ever-changing economy. Hiring challenges were identified as a top priority by OCC members in the recent Business Confidence Survey.

• Peterborough Analysis

Financial literacy has been an important topic for the Peterborough Chamber for many years.  Finding and hiring skilled talent in a timely manner has also become a focus of Chamber Members.  The Chamber is a community partner in the Local Employment Planning Council pilot project that seeks to identify the need in the local labour market and where gaps will be in the future. 

Health Care Booster Shot
The government is providing for greater health care spending in the form of a $7 billion “booster shot” over the next three years. In budget 2017 the government also plans to spend an additional $11.5 billion over the next three years, including the cost of the new children and youth pharmacare program with annual growth in health care spending is projected to be 3.3. percent on average.

• OCC Analysis

While the OCC is pleased to see that healthcare is a priority for this government, we do not believe that spending more money is a sustainable solution.In recent advocacy efforts the OCC has encouraged government to shift towards a value based health care system and modernize procurement and supply chain processes.

OHIP+: Children and Youth Pharmacare
The Government plans to provide universal drug coverage to all children and youth aged 24 and under, regardless of family income. Beginning in 2018, OHIP+: Children and Youth Pharmacare will cover the costs of medicines funded through the existing Ontario Drug Benefit Program. The preliminary estimate of the cost of OHIP+ is $465 million per year.

• OCC Analysis

While the goal of providing drug coverage to all Ontario children and youth is a laudable one, we are concerned that the costs of the pharmacare plan will further contribute to the unsustainable health care spend Furthermore, we are concerned that OHIP+ may disrupt current workplace drug benefit plans, many of which already fill needed prescriptions for young Ontarians. 
We encourage the government to work with insurance firms and employers to determine the best way to ensure Ontario children and youth have access to the medicines they need, without duplicating or disrupting current coverage. We hope to work with government to design a plan that works in tandem with private drug benefit programs.

Interprofessional Primary Care Teams
The Government is investing a further $15 million to create new, or expand existing, interprofessional care teams.

• OCC Analysis

In Transformation Through Value And Innovation: Revitalizing Health Care in Ontario, the OCC called for greater use of interprofessional care teams to better co-ordinate holistic care and to ensure patient needs are consistently and effectively addressed.

• Peterborough Analysis

The Peterborough Chamber is pleased to see this commitment by the provincial government.  Your chamber started this call in the mid-2000’s with a policy resolution called “Addressing the Bottlenecks to Healthcare”.  This resolution called for the creation of multi-disciplinary care teams in emergency rooms.  One result of the resolution was the province allowing pharmacists to administer the flu shot.  


Business Investment
In Budget 2017, the Government projects that business investment will outstrip real GDP growth and household spending, rising by an average 3.1 percent between 2017 and 2020. Government attributes this growth to a competitive Canadian dollar, strong U.S. demand, and improving domestic opportunities. 

• OCC Analysis

In the Ontario Economic Report, we found that business investment is slowing due to a high perception of risk in the Ontario economy. Given the uncertainties surrounding existing free trade agreements with the U.S., as well as an on-going lack of business confidence in the province’s economic outlook, it is unclear how business investment could be prompted to reach such levels of growth.


Housing Affordability
Previously, the Ontario government released a set of 16 comprehensive measures aimed at helping Ontarians find affordable homes and bring stability to the real estate market. In Budget 2017, they detailed their plans to address the complex network of factors influencing the Ontario real estate market.

• OCC Analysis

The OCC appreciates that the Province is “collecting more precise data on the real estate market”. It is concerning that the Government’s own projections show projected housing starts in 2017 through 2020 to be lower than those in 2016. This indicates that their 16-point housing affordability plan may have negative unintended consequences. Given the importance of increasing supply to improving affordability, these projections do not bode well for the success of the Government’s plans.

• Peterborough Analysis

Housing is the foundation of a strong economy.  The importance of a market that includes a decent supply of homes in the housing and rental market is linked to encouraging new talent to locate to our community.   The sustained impact of the current housing market could lead to challenges in the City and County.  

Welcoming New Canadians
Budget 2017 reveals that federal government has increased the province’s 2017 allocation for the Ontario Immigrant Nominee Program (ONIP) by 500 nominees to a total of 6,000. The OINP is also modernizing its application process this year with a new, paperless online system that will speed up the application process, improve customer service, and help employers find the skilled workers they need more quickly.

• Peterborough Analysis

The Peterborough Chamber has been a voice in the discussion around integration of newcomers to our community and economy.  The Peterborough Chamber of Commerce recently hosted a provincial Minister’s Employment Table with the Ministry of Citizenship and Immigration and brought together employers and service providers to discuss how to improve programs to access international talent.  

There are a couple other areas of concern as Ontario will not return to planned Corporate Income Tax cuts, jeopardizing tens of billions of dollars in potential capital investment and hundreds of thousands of new jobs. 

And while there is no deficit over the planning period, there is also no plan for surplus. Ontario’s debt will rise by 21per cent in the next three years as a result of interest charges, with no plans to begin debt repayment.   

Budget 2017 also sets directions around mental health, cyber security, the Changing Workplaces Review, growth in agri-food and aerospace all issues and sectors that apply to Peterborough.  
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Read Budget 2017

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