Ontario’s 2024 Budget: Building a Better Ontario

On March 26, 2024, the Government of Ontario unveiled its latest fiscal strategy with the 2024 Budget titled Building a Better Ontario. This budget aims to address pressing issues like housing, workforce development, health care, and more—all significant challenges facing the business community in the province. Below is a detailed summary of the highlights from this major fiscal announcement and how they align with the interests of Ontario’s business sector.

Housing Initiatives

One of the standout features of the 2024 Budget is a bold investment of $1.6 billion aimed at confronting Ontario’s housing crisis. This includes $1 billion allocated to the Municipal Housing Infrastructure Program, which focuses on foundational infrastructure projects necessary for housing development. An additional $625 million has been earmarked for the Housing-Enabling Water Systems Fund, supporting the province’s ambitious goal of constructing 1.5 million new homes by 2031.

Municipalities are being empowered with new tools to tackle this crisis, such as the option to reduce property taxes on purpose-built rental properties. Furthermore, a higher tax rate on foreign-owned vacant homes is intended to discourage speculation and incentivize new housing projects.

OCC Analysis on Housing

The Ontario Chamber of Commerce (OCC) recognizes the critical state of the housing crisis, which poses challenges for businesses attempting to attract and retain talent. The projected construction of only 80,000 new homes in 2024— down from 109,000 the previous year—falls significantly short of the required 175,000 homes per year. While the funding is a welcome start, the OCC stresses the need for ongoing legislative and financial support to stimulate rapid housing construction and innovative housing solutions.

Workforce Development Investments

Budget 2024 has introduced a significant boost of $100 million to the existing Skills Development Fund. This effort aims to help individuals advance their careers—particularly in skilled trades, where an additional $16.5 million will be invested annually for the next three years. Draft regulations are also being proposed to protect retirement security for workers while enhancing their job mobility.

However, the budget also outlines a $425 million cut in base funding for Ontario’s colleges and universities, largely due to changes in federal student permit policies.

OCC Perspective on Workforce Development

Given the rapid technological changes transforming the labor market, the OCC welcomes these funding increases for skill development. However, they express concern over cuts to post-secondary institutions which may jeopardize long-term workforce development efforts and emphasize the need for continued advocacy for a review of federal education policies to improve sustainability in this sector.

Health Care Enhancements

With a focus on improving access to primary health care, the budget allocates $546 million over three years to connect an additional 600,000 individuals to health care teams. Additional funding goes toward supporting Northern and Indigenous communities in accessing necessary services—an essential move, given that an estimated 2.2 million Ontarians currently lack a family doctor.

Significant investments also target health human resources, with $743 million aimed at increasing the workforce of doctors and nurses. The creation of a new York University School of Medicine, focusing on family medicine training, is set to enhance accessibility.

OCC Insights on Health

The OCC underscores the importance of these health care investments, particularly as Ontario’s population ages and requires increased health services. They encourage the government to continue investing in the health ecosystem, including addressing emerging health technologies and mental health care, to ensure a sustainable health care system.

Mental Health and Addictions Support

The Ontario government has committed an additional $396 million over the next three years to bolster mental health and addiction support services. Specifically, funding will continue for addiction recovery programs and mental health services tailored to Indigenous and Northern communities, alongside an investment in supportive housing initiatives.

The OCC’s View on Mental Health

The OCC applauds the government’s efforts to address the "echo pandemic" of mental health crises exacerbated by the opioid epidemic. They emphasize the necessity of integrating mental health services into broader health strategies as demand for supportive care escalates.

Infrastructure and Transit Improvements

The budget introduces a $200 million Community Sports and Recreation Infrastructure Fund aimed at bolstering community facilities. It also rebrands the Ontario Infrastructure Bank as the Building Ontario Fund, emphasizing increased investments in various sectors.

OCC Perspective on Infrastructure

The OCC views infrastructure enhancement as critical, noting the potential for these investments to drive private sector engagement and improve community services, including broadband access and transportation networks.

Business and Investment Attraction

Recognizing the importance of maintaining a competitive economic environment, the budget allocates $100 million to the Invest Ontario Fund to stimulate high-quality job creation and innovation. There are also targeted incentives for the mining sector and forestry initiatives designed to drive growth in these industries.

OCC Commentary on Business Support

In light of ongoing economic uncertainty and low business confidence, the OCC urges the government to take additional steps to secure investments in key sectors, enhancing Ontario’s position as a desirable destination for future growth.

Addressing Small Business Needs

With an investment of $6.8 million for the Starter Company Plus program, the government aims to support small businesses and entrepreneurs. This includes grants for youth businesses, reinforcing the province’s commitment to entrepreneurship as a driver of economic expansion.

OCC Comments on Small Business

The OCC emphasizes the importance of fostering an enabling environment for small businesses to flourish. They call for additional measures to ease access to capital and streamline regulatory requirements, thereby supporting entrepreneurial growth.

Notable Omissions

Despite the budget’s comprehensive approach, certain areas remain under-addressed, including the tourism sector, digital innovation, and climate adaptation strategies. The OCC stresses the necessity for ongoing dialogue and collaboration with industry stakeholders to refine and expand these critical areas.

Conclusion

Overall, Ontario’s 2024 budget presents a mixed yet hopeful outlook towards building a strong economic future. While it lays the groundwork for essential investments in key sectors, ongoing advocacy from the OCC and other stakeholders will be paramount in addressing the gaps and ensuring a sustainable growth trajectory for Ontario’s communities and businesses. Stakeholders are encouraged to engage with the government and participate in the implementation of these initiatives for the betterment of Ontario’s economy.

For more detailed insights, you can refer to the Ontario Chamber of Commerce’s comprehensive budget submission here.