by Yasir Naqvi
MPP, Ottawa Centre
The Ontario government is taking strong action in the budget to eliminate the deficit by 2017-18, grow the economy and create jobs while protecting health care and education.
It takes leadership and cooperation to make a minority government work. Passing the budget is a perfect example of this. I am pleased that our government has reached an agreement with the NDP that makes the 2012 Ontario Budget even better, and helps us to further reduce the deficit. The measures agreed upon include no new overall spending and accelerate our five-year plan to eliminate the deficit by 2017-18.
We are providing additional funding for child care as we move towards the implementation of full-day kindergarten by 2014-15. The total fiscal impact of this action will be $90 million in 2012-13, $68 million in 2013-14 and $84 million in 2014-15. This investment would be funded from within the Ministry of Education’s allocation, published in the 2012 Budget. I am confident that these funds will ensure that the child care sector remains strong and can help families experience a seamless transition to full-day kindergarten.
Our government will move immediately to lower the cost we pay for the most popular generic drugs, generating an additional $55 million a year in savings. This will allow us to increase the social assistance rates—Ontario Disability Support Program and Ontario Works —by one per cent respectively in the fall of 2012. This will be the eighth increase our government has made to social assistance since coming to office.
We will also introduce legislation to create a new income tax bracket for individuals with incomes over $500,000. Subject to approval of the Legislature, the top statutory Ontario income tax rate on incomes over $500,000 would increase by two percentage points, with all new revenue generated —an estimated $470 million next year—going directly into deficit reduction. This surtax would be effective July 1, 2012, which is the same day the freeze on corporate income taxes is proposed to take effect, and would be eliminated once the budget is balanced in 2017-18.
With these proposed changes, Ontario’s deficit is now projected to be lower than originally forecast in the 2012 Budget. The government is projecting a deficit of $15 billion in 2011-12, down from $15.3 billion. In 2017-18, the year in which the budget was initially forecast to balance, the government is now projecting a $0.5 billion surplus. As a result of these actions, provincial debt, measured as the accumulated deficit, would be reduced by $3.5 billion by 2017-18.
For more information about the 2012 Ontario Budget, please visit www.ontario.ca/budget or www.yasirnaqvimpp.ca, or call me at my community office at 613-722-6414.