Ontario Liberals unveil 2017 budget

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Ontario Liberals unveil 2017 budget

Ontario's Liberal government has tabled its first balanced budget in a decade and it's chock full of new spending, with the provincial economy firing on all cylinders and an election campaign one year away. 

Premier Kathleen Wynne and Finance Minister Charles Sousa are sending strong signals there will be plenty of goodies in the budget, after nine years of relative restraint. 

- Ontario lays out sweeping measures to curb high rents, home prices  

"You will see us investing in our priorities, in health care, in education and in those initiatives that make life more affordable for Ontario families," Wynne said in a speech this week. 

In the legislature, Wynne added that balancing the budget "gives us the opportunity to take the next step, to further invest in the people of this province and do the things that we know are necessary."

The province's GDP grew 2.7 per cent in 2016, a full half percentage point more than forecast in last year's budget. Many private sector economists are predicting Ontario will lead Canada in growth this year. 

"Because of that economic growth, because of the measures that we've taken in terms of controlling spending, we are now in a position to do even more and to pay a dividend back to the people of Ontario," Sousa told reporters this week. 

The government has already revealed three of the most significant measures that will form part of the budget: the plan to cut hydro bills, the plan to cool the housing market and a boost to child-care subsidies. But there's more to come, "We want to save the best for last," said Sousa.

CBC.ca is live streaming Sousa's speech. You can watch live by clicking on the image at the top of this story.

Health care

Sousa is promising to provide "a booster shot" for health care. Where exactly will that booster shot go? There are some indications it will aim to deal with the chronic hospital overcrowding that leaves patients languishing on stretchers in hallways, while beds on wards remain full.

"I believe that you'll see in the budget important investments that will speak to these types of challenges," said Health Minister Eric Hoskins. "It's important to give resources to hospitals to allow them to face the pressures that they're seeing."

This could mean spending on new nursing home spaces, as many of the patients occupying beds in hospitals have been discharged but are in need of a long-term care. It may also mean allocating more money toward keeping people out of hospital, such as home care.

Health always eats up the biggest portion of the provincial budget: more than 42 per cent of all program expenses in last year's budget, or $51.8 billion.

Affordable housing

"We need a three-way partnership on affordable housing — the municipality, the province and the federal government working together as we move into this budget cycle," Wynne said in January. The cities certainly want to participate, and in March the federal government pledged $11.1 billion for housing over the next 11 years.

That puts the ball firmly in Ontario's court, and it looks like Sousa will serve up something. "Affordable housing is an additional piece that we'll address in the budget," he said Wednesday in response to a question from CBC News. 

Balanced, but how?

The Liberals have sworn they will eliminate the deficit in this budget, and they will be helped along in that by a surging economy bringing more revenue into government coffers. 

Still, look closely to see how their numbers add up. Do they rely on one-time injections of funds to get out of the red? What are the sources of the extra revenue to fund the expected extra spending?

"I think it's going to be an artificial balance and I think Chef Sousa is cooking the books," said Progressive Conservative leader Patrick Brown this week.  

Sousa has given no indication he will use the extra revenue to pay down the province's debt, which the government currently estimates at $318 billion. 

Nickels, dimes and dollars

Sousa has vowed no new taxes, and Wynne has vowed no tax hike on the middle class.

But look for other ways your costs will rise, such as driver's licence and vehicle registration fees, as well as alcohol and tobacco taxes. The government likes to offset these kinds of increases with eliminating other fees: last year, they announced that Drive Clean testing would become free.

Some people are hoping that the balanced budget will bring an income tax cut, but that's not been the tone from the government, and would be far more likely to come in next year's budget, which will come just before the June 2018 election.  

Infrastructure

The provincial Liberals have already promised an infrastructure spending plan of $160 billion spread over 12 years.

The government is now moving into year four of that program, with the target of spending $15 billion in 2017-18. Transit is the biggest single sector, getting one-third of the funds, while highways, hospitals and schools split another 50 per cent. The budget may reveal some specific projects that will be funded in the years to come.