Ford government to table 2023 Ontario budget amid 'uncertain economic times'

The Ford government is set to release its 2023 budget on Thursday, one that Ontario's finance minister says will prepare the province for the "uncertain economic times" ahead. 

"Families and businesses and workers are feeling the financial pressures the current economy is putting on them each and every day," Finance Minister Peter Bethlenfalvy said this week.

"While Ontario's economy has remained resilient, the economic road ahead continues to be uncertain," added Bethlenfalvy, who has stressed the need for "restraint" after the big spending, high-deficit budgets of the COVID-19 pandemic.

That restraint, though, does not mean cutting program spending, according to Bethlenfalvy.

"I don't think you can cut your way to prosperity," he told reporters. "You have to have a plan and a vision."

Bethlenfalvy has hinted the "vision" will be a plan to attract jobs and build — keeping on a favourite theme of Premier Doug Ford's infrastructure-focused government.

The latest outlook comes as Ontario wrestles with above-target consumer price inflation, high interest rates, a generational labour crunch and possible recession. Growth has slowed and is expected to remain modest in the coming years.

The government, however, has also seen unexpectedly high tax revenues and shrinking deficits. It is sitting on billions of dollars in contingency funds that opposition parties argue should be pumped into the severely strained health-care sector.

The New Democrats have accused Bethlenfalvy of repeatedly exaggerating deficit projections to warrant under-spending on health care, education and social programs. In a third-quarter finances report released last month, the government's deficit outlook from just months earlier nearly halved, going from about $13 billion to $6.5 billion.

The province also finished the 2021-2022 fiscal year with a surprise $2.1 billion surplus, despite forecasting a $33 billion deficit in the 2021 budget.

Ontario's current economic circumstances are "unique pretty much in my entire lifetime as an economist," said Brian Lewis, former chief economist at the Ontario Public Service and now a senior fellow at the Munk School of Global Affairs.

Further revenue growth offers potential for the province to quicken its path back to balance, he said. Or it could invest more in new programs and offer some form of tax relief. But those possibilities also risk adding inflationary pressure to the economy, he added.

An increase in the revenue outlook means the government could do more to address the staffing crisis in the health-care sector, according to Lewis. One option is to repeal Bill 124, which capped public sector wage increases at one per cent annually. 

An Ontario Court of Appeals judge ruled late last year that Bill 124 was unconstitutional, but the government has appealed the decision.