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Overview of Ontario’s 2021 Economic Outlook and Fiscal Review

Overview of Ontario’s 2021 Economic Outlook and Fiscal Review    

Today, Peter Bethlenfalvy, Minister of Finance, delivered the 2021 Ontario Economic Outlook and Fiscal Review. Ontario is making numerous investments over the next several years in Ontario’s economic recovery and growth, including a Travel Staycation Tax Credit, job creation throughout the province, and in the health sector. 

The government is proposing a new, temporary Ontario Staycation Tax Credit for the 2022 tax year. The fund for this credit has increased from originally $150M to $270M and will be for eligible accommodation expenses. This Personal Income Tax (PIT) credit would provide Ontario residents with support of 20 per cent of eligible 2022 accommodation expenses of up to $1,000 for an individual and $2,000 for a family, for a maximum credit of $200 or $400, respectively. Ontario residents could apply for this refundable credit when they file their 2022 PIT returns and benefit even if they do not owe any PIT.  

Also announced is the launching of a Small Business Digitalization Action Plan to help small businesses leverage online platforms. This includes $40M over the next two years to enhance the Digital Main Street and $10M over the next two years to create a Small Business Digitalization Competence centre. 

The government made a notable announcement on the temporary Ontario Jobs Training Tax Credit for the 2021 tax year. The government is proposing to extend this PIT credit by one year to 2022. The parameters of this credit for 2022 would be the same as for 2021. This PIT credit would be refundable to support eligible individuals whether or not they owe PIT. The credit would be calculated as 50 per cent of eligible expenses for the year. The maximum credit would be $2,000 for the year. 

The provincial government is adding and upskilling over 13,000 health sector workers and investing in long-term care throughout Ontario, while also continuing to invest in transient infrastructure which supports the tourism industry across the province. As announced earlier this week, the government is proposing to raise minimum wage to $15 per hour and eliminating the special minimum wage for liquor servers. 

The full summary of Ontario’s Fall Economic Statement is below: 

Working for Workers: 

Economic Growth 

  • Enabling $10.1B in cost savings and supports for businesses in 2021, including $6.2B for small businesses 

  • Launching a Small Business Digitalization Action Plan 

  • $40M over the next two years to enhance the Digital Main Street 

  • $10M over the next two years to create a Small Business Digitalization Competence centre 

  • Investing $25M over three years in a new Strategic Agri-Food Processing Fund to enhance processing capacity and food security in underserved areas 

  • Proposing an Ontario Staycation Tax Credit that would provide $270M (originally $150M) in total support for eligible accommodation expenses for travel within Ontario in 2022 

  • Ex. Scenario #1 – and individual books an eligible hotel room for a night at $250. They also have $250 in other non-eligible tourism-related expenses (e.g. dinner and ticket to a show). Support is 20% of $250 in eligible expenses - $50.  

  • Ex. Scenario #2 – a family books an eligible campsite for two long weekends for a total of $600. They also have $400 in non-eligible tourism-related expenses (e.g. renting a car). Support is 20% of $600 in eligible expenses - $120. 

  • Ex. Scenario #3 – a couple with two children book an eligible cottage for a week at $2750. They also have $750 in non-eligible tourism-related expenses (e.g. groceries, local attractions). Support is 20% of $2750 in eligible expenses - $400. 

Eligible accommodations would have to be: 

  • For a stay of less than a month at an eligible accommodation such as a hotel, motel, resort, lodge, bed-and-breakfast establishment, cottage or campground in Ontario; 

  • For a stay between January 1 and December 31 of 2022; 

  • Incurred for leisure (e.g., a non-business purpose); 

  • Paid by the Ontario tax filer, their spouse or common-law partner, or their eligible child, as set out on a detailed receipt; 

  • Not reimbursed to the tax filer, their spouse or common-law partner, or their eligible child, by any person, including by a friend or an employer; and 

  • Subject to Goods and Services Tax (GST)/Harmonized Sales Tax (HST), as set out on a detailed receipt. 

  • Creating a $40M advanced Manufacturing and Innovation Competitiveness stream of the Regional Development Program over two years to help businesses improve competitiveness, growth, and job creation 

  • Building Northern communities 

Skilled and Minimum Wage Workers 

  • Proposing to increase the general minimum wage to $15 and eliminating the special minimum wage for liquor servers 

  • Proposing to extend the Ontario Jobs Training Tax Credit by one year to 2022, providing an additional $275M 

  • Investing an additional $90.3M over three years to enhance the Skilled Trades Strategy 

  • Investing an additional $5M in 2021-22 to expand the Second Career program to extend support to newcomers, gig workers and people with disabilities 

  • Committing funding for the Investment in Womens Future Program to offer free training to women facing multiple barriers to employment 

  • Investing $5M over two years in targeted supports with the Racialized and Indigenous Support for Entrepreneurs (RAISE) Grant 

Building Ontario: 

Building Transit and Transportation 

  • Allocating $2.6B for 2021-22 to expand and repair highways and bridges, and committing funding to advance the Bradford Bypass and Highway 413 

  • Investing an additional $474M over a five-year period to address large bridge rehabilitation projects in southern Ontario 

  • Investing $345M in 2021-22 in municipal transit systems, given lower ridership and Gas Tax revenue resulting from the pandemic 

  • Providing $28.5B for subway expansion with the all-new Ontario Line, Scarborough Subway Extension, the Young North Subway Extension, and the Eglinton Crosstown West Extension 

  • Committing $5M for feasibility work for a proposed service route to improve transportation in North-eastern Ontario 

Building the Ring of Fire 

  • Proposing amendments to the Far North Act, 2010 that would retain provisions that allow for joint land-use planning with Far North First Nations 

  • Committing almost $1B to support the planning and construction of the road to the Ring of Fire and related projects 

Building Infrastructure 

  • Investing $30.2B over the next 10 years in infrastructure to increase capacity in hospitals, build new health care facilities and renew existing hospitals and community health centres 

  • Doubling the Ontario Community infrastructure fund with an additional $1B 

  • Building more homes, establishing a Housing Affordability Task Force 

  • Almost $4 billion over 6 years for affordable and reliable high-speed internet throughout Ontario by 2025 

Protecting Progress: 

Health Care 

  • Strengthening the nursing workforce by investing $342M to add and upskill 5,000 RNs, 8,000 PSWs 

  • Investing $57.6M beginning 2022-23 to hire 225 nurse practitioners in the LTC sector 

  • Investing an additional $548.5M to expand home and community care to help patients recover from surgeries and complex health conditions over the next three years 

  • TOTAL: $5.1B since the start of COVID-19, $1.8B 2020-21.  

  • Adding over 13,000 new and upskilled health sector workers 

Long-Term Care 

  • Investing $72.3M over three years to hire 156 additional inspectors by 2022-23 to double the number of inspectors across the province 

  • Investing an additional $3.7B beginning in 2024-25, to add 10,000 net new LTC beds and upgrade 12,000 beds 

  • Providing $22M over 3 years to integrate clinical information between hospitals and LTC sector 

  • Extending Seniors Safety Tax Credit by one year to 2022 to provide $35M in additional support for about 32,000 people, or $1,100 on average, up to a maximum of $2,500 

  • Investing $17M over two years to increase access to dental service for seniors 

Mental Health & Other Health Supports 

  • Investing $12.4M over two years, starting in 2021-22 to expand access to existing mental health and addictions support for health and LTC workers 

  • $8.7M in 2021-22 to increase mental health supports for colleges and universities and Indigenous Institutes 

  • $8.1M to address increased demand for eating disorder services for children and youth 

  •  $11M for retirement homes 

  • $8.9M for COVID-19 supports in congregate care 

Education Health 

  • $1.6B for schools COVID-19 response 

  • $1.6M over 3 years to create a database of volunteers to train to respond to emergencies 

  • $10M - $20M over 3 years to support reconciliation; identify and commemorate Indian Residential School burial sites 

For more information on the Ontario 2021 Budget, please visit here  

To read the full document on Ontario’s Economic Outlook and Fiscal Review, please visit here