Government of Ontario Announces Billions in New Funding to Fight COVID-19

The original plan was to unveil the fiscal 2020/2021 budget in the Ontario legislature tomorrow. Instead, the Government of Ontario announced this afternoon that they’re going to spend billions of dollars in the short-term to help the province fight the COVID-19 pandemic with new health spending, and economic support for workers and businesses.

In what the government is calling a “first step” in responding to COVID-19, Finance Minister Rod Phillips released “Ontario’s Action Plan: Responding to COVID-19 (March 2020 Economic and Fiscal Update).” The package has $17 billion in new spending between $7 billion for additional resources for health care and jobs, and $10 billion in support for people and businesses through tax and other deferrals.

“As Finance Minister, my number one priority right now is ensuring that our front-line health care professionals have the resources they need to fight the COVID-19 outbreak,” said Phillips in a statement.

“The people of Ontario can have confidence that we will do whatever it takes to protect their health and well-being,” he added. “These additional resources will enhance hospital capacity, protect our loved ones in long-term care, and support our public health officials’ work to flatten the curve and slow the spread.”

For healthcare, the funding will provide $1 billion for a contingency fund to quickly respond to emerging needs, nearly another billion dollars to address hospital capacity, $243 million for surge capacity and staffing at long-term care facilities, $160 million for laboratory monitoring and testing, and $75 million for personal protective equipment (PPE) and other supplies.

The rest of that $7 billion portion will cover some previously announced measures including reduced hydro rates, and emergency childcare for frontline workers. The Province will also offer a one-time payout of $200 per child 12 and under, and $250 for each special needs child, to cover additional childcare costs, as well as doubling the Guaranteed Annual Incoming System (GAINS) payment for seniors for the next six months.

There will also be nearly $150 million for enhanced funding to social assistance agencies like food banks and homeless shelters, six months of interest relief for OSAP repayments, a temporary increase to the Employer Health Tax exemption to the tune of $355 million, $26 million in additional support for Indigenous communities, and a new Regional Opportunities Investment Tax Credit to support employment growth.

The $10 billion portion is meant to offer “support for people and businesses through tax and other deferrals to improve their cash flows over the coming month.” These measure include $6 billion for five months of interest and penalty relief for most provincial taxes, $1.9 billion for the Workplace Safety and Insurance Board (WSIB) so that employers can defer payments for six months, and $1.8 billion to allow municipalities to defer the education portion of property taxes on June 30.

“We’re taking responsible steps to lessen the burden for businesses and people,” added Phillips. “Together, these actions can free up as much as $10 billion in cash flows for businesses and people in these uncertain times, helping protect jobs and household budgets.”

The government added that the new funding will increase the deficit to $20.5 billion for the 2020/2021 fiscal year.

Guelph MPP and Green Party of Ontario leader Mike Schreiner supported the package, but he still has his critiques. “I am disappointed that this financial package leaves everyday people, renters, and local businesses without the assistance they need to survive a prolonged crisis,” Schreiner said in a statement following the release of the fiscal plan.

Among his concerns, Schreiner explained that the government missed an opportunity to lead with a guaranteed basic income to get people through the crisis, and that there was a distinct lack of cash flow relief for small business struggling to cover their bills. And with the end of the month coming on Tuesday, Schreiner had another point of concern.

“This relief plan leaves renters vulnerable to eviction even as we beg people to stay in their homes to flatten the curve,” Schreiner added. “I am surprised the government took no concrete measures to either provide rent relief or explicitly ban evictions until this pandemic is over.”

Schreiner covers many of the same points as Official Opposition leader Andrea Horwath, who, on Monday, called on the government to implement a plan to send “Ontario Emergency Income cheques” worth $2,000 each to households across the province that are experiencing unemployment and/or loss of income from COVID-19.

“Many Ontarians are at their financial breaking point,” Horwath said in a statement after the announcement. “Rent and mortgage payments are coming due, and people’s credit card charges are piling up. Folks are worried about how they’ll avoid eviction, and avoid racking up debts that will dog them in the months ahead. And small businesses can’t use a tax credit if they have no cash coming in.”

Liberal leader Steven Del Duca looked to the specifics of the government’s plan and wants assurances that the extra funding for testing will be able to be deployed rapidly. Del Duca also added that the plan should double the amount being spent on PPE, and that there should be some consideration for increased spending on mental health.

“On the economic front, it appears that most of what’s been announced today is in the form of deferrals, which suggests that businesses will be required to pay what they owe in six months,” Del Duca added. “I understand that the province may be waiting to see what the federal government does next – but what we can’t afford is to stand still while workers are laid off, rents are due, and business owners are reeling.”

Both Horwath and Del Duca said that their parties will support the government in passing the new measures.

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