Accelerating Ontario's Balanced Budget Plan
NDP's Surtax On Richest Ontarians To Further Reduce Deficit
The Ontario government has reached an agreement that would make the Budget even better, accelerate the plan to reduce the deficit and contains no net new spending.
Under the terms of the agreement reached today with the opposition NDP, the richest Ontarians -- those who make more than $500,000 a year -- would be asked to pay a two percentage point surtax on their incomes.
All of the new revenue generated -- some $470 million next year -- would go directly into deficit reduction. The NDP surtax would be eliminated when the Budget is balanced in five years.
The Budget will also include a $20-million transition fund to benefit Northern and rural hospitals to help them achieve efficiencies so that more of their precious dollars go into patient care. Ontario Works rates would also be increased by one per cent in the fall of 2012. Funding for these measures would come from savings realized elsewhere in the Budget.
The government is also proposing enhancements to the Budget's freeze on executive compensation, with a freeze on the overall performance pay envelopes at Ontario's hospitals, colleges, universities, school boards and designated agencies for two years. If approved, this would mean that performance pay could not exceed the total performance pay provided to all eligible non-bargaining employees in the previous performance cycle.
These latest measures are in addition to further steps to improve the Budget announced last week which include:
- Additional funding to the child care sector, which will be found within the Ministry of Education's existing budget.
- A further cut to the price the government pays for the most popular generic drugs. This would generate enough savings to raise Ontario Disability Support Program rates and Ontario Works rates.
- Merger of the Independent Electricity Systems Operator and the Ontario Power Authority, saving ratepayers $25 million a year.
The 2012 Budget takes strong action to eliminate Ontario's deficit by 2017-18 while protecting health care and education, all of which is essential to creating jobs and growing the economy.
- About 23,000 people would pay an average of about $19,000 more in provincial income tax, just 0.2 per cent of all tax filers.
- Ontario's economy is projected to grow at 1.7 per cent in 2012, 2.2 per cent in 2013 and 2.4 per cent in 2014.
- In 2011, more than 121,000 jobs were created in Ontario -- with full-time employment increasing by 123,400.
“The NDP's surtax on the rich will help accelerate our plan to balance the Budget. If you make over half a million dollars, we are asking you to do a bit more. That's good for all Ontarians, because it will grow the economy and support what matters most to all of us -- health care and education.”
Premier Dalton McGuinty