Download Ontario Fiscal Policy - Ontario Health Coalition

The Current
Context
Ontario Fiscal Policy
Rhetoric Vs. Reality
• With the election over, pressure to cut public programs
has become quite intense.
• Another option -- increasing revenue from corporations
and the wealthy is not mentioned. However, data clearly
indicates that Ontario does not have an overspending
problem compared to the other provinces.
• Instead, it indicates Ontario has very low revenue.
Ontario under pressure
to cut public services
Ontario has the
lowest public
spending of all the
provinces on a per
capita basis
(Source: 2014
Ontario Budget).
If anything, this
suggests we have an
under-spending
problem.
The Ontario
government has also
now reported in the
2014 Budget that
Ontario has the lowest
revenue per capita of
any province.
This is particularly
notable as other
provinces are quite a
bit poorer than Ontario
and therefore have a
much more limited
ability to pay for
public spending.
Also notable in this chart is the weak role federal government transfer payments play
in Ontario finances.
Low Ontario
revenue is not a
one-year flash in
the pan.
Statistics
Canada data for
2009 (the last
year before Stats
Can terminated
the series)
indicates that
Ontario had the
lowest per
capita revenue
at that time as
well.
The Stats Can data
further indicates
that Ontario has the
lowest revenue as a
percentage of the
economy (GDP) of
all the provinces.
("Own source"
revenues are those
only from measures
imposed by the
Ontario
government - -they
exclude transfers to
the Ontario
government from
the federal
government).
Own source
revenue for
Ontario was
14.4% of GDP,
while in the rest of
Canada it was
17.9%, i.e. an
astonishing 3.5
percentage points
of GDP lower in
Ontario.
If Ontario had taken the same own source revenue as the rest of Canada, the
treasury would have an extra $19.5 billion in 2009. The deficit would be toast and
our big problem would be to figure out how to spend the extra cash.
•
The Ontario government says the unilateral federal decision to limit the growth of the Canada Health
Transfer will cost Ontario $8.2 billion -- $550 for every individual in Ontario.
•
The Ontario Fall Economic Outlook indicates that 59% of the Ontario health care funding increase this
year comes from the annual increase in funding from the federal government via the Canada Health
Transfer (CHT).
•
The federal transfer increase accounts for $752 million out of a total provincial health care increase of
$1.272 billion. (Another $181 million comes from the increase in the Employer Health Tax revenue, with
not much coming from other Ontario based revenue sources, like income or corporate tax.)
•
•
The share of new funding paid for by new federal CHT funding is up from 56% in 2012-13 and 25% in
2011-12. Federal CHT funding now provides 24.7% of Ontario provincial government health care
funding.
•
Unfortunately, the federal government has unilaterally announced plans to reduce its increases for health
care funding. Given the role those increases are playing for health care in Ontario, this is significant.
•
this year was under the planned federal CHT funding model, Ontario would be out $340 million. As the
federal cuts compound every year, the losses will increase every year.
The federal role
Ontario’s Spending Trends
• Health care is shrinking, not growing, as a proportion of Ontario’s spending.
• Ontario is 8th of 10 provinces in health spending.
• Ontario is 8th of 10 provinces in all government spending.
• Ontario spends less as a percentage of its GDP than almost all other provinces
and is significantly below the average.
• Hospitals and home care are shrinking, not growing as a proportion of health
spending.
• Ontario has engaged in the most prolonged and deepest tax cuts of any province
in Canada. These cuts have not resulted in business investment.
The provincial role
Tax cuts, not health care are “eating” the provincial budget