On March 27, 2012, Finance Minister Dwight Duncan unveiled the 2012 Ontario Budget, indicating his number one priority – eliminating the deficit. To this end, the Budget proposes a number of measures that will reduce overall program spending by $17.7 billion and raise an additional $4.4 billion in revenue over the next three years. One of OREA’s major recommendations in its pre-budget submission was balancing the provincial budget by 2017/18. Balanced budgets help to prevent increases in interest rates and therefore enhance homeownership affordability.
Measures designed to help balance the Budget include freezing public servants’ salaries, reducing health care spending and remodelling public pension plans. Ontario has also turned to the business community to eliminate its deficit. The government announced its plans to suspend scheduled cuts to corporate income taxes and maintain the rate at 11.5 per cent. The Budget also proposed to temporarily freeze the province’s Ontario Business Education Tax (BET) reduction plan.
In addition, the government will transform the way it manages its real estate holdings and cap the Ontario Clean Energy Benefit for large users. For OREA’s detailed analysis, visit the Provincial Budget section of our website.
The 2012 Budget received mixed reviews from opposition parties. Progressive Conservative Leader Tim Hudak stated his party would not vote in support of the Budget Bill due to lack of job creation initiatives. NDP Leader Andrea Horwath announced she would be consulting with the public before making a final decision. The Ontario Liberals must be backed by at least two opposition members in order to pass their Budget. The vote will take place at the end of April.