March 2018
2018 Provincial Budget Update

2018-03-28 5:15:58 PM


This afternoon Finance Minister Charles Sousa delivered Ontario’s 2018 budget, A Plan for Care and Opportunity. This year’s budget, which comes just over two months before the 2018 provincial election, is full of new spending commitments in human services, health, and childcare. The most significant new investments in the budget were:

  • Free daycare for children aged two-and-a-half (beginning in 2020)

  • $1 billion of funding for a Senior’s Healthy Home Program

  • New funding for mental health and hospital operations

  • A new Ontario Drug and Dental Program

  • Expanding OHIP+ to all Ontarians over the age of 65

For local governments the budget contains few funding commitments or new initiatives. With the majority of new money dedicated to social programs and healthcare, the budget document primarily highlights historical spending and previous commitments to the municipal sector.
While AMCTO will continue to review the budget in greater depth over the coming days and weeks, below is a brief summary of some of the highlights of the budget for the municipal sector:

Fiscal Overview 
Ontario’s Ministry of Finance is forecasting 1.9 per cent average growth over the 2018-21 period, and a net debt‐to‐GDP ratio below its 2014–15 peak of 39.3 per cent—resuming its downward trend in 2022–23. Last year’s budget was the government’s first balanced budget following a series of deficits that reached $19 billion at the height of the global recession in 2009. After one year of balance, the government is once again plunging the province back into deficit for the next six years by way of $20.3 billion of new spending.

Following several years of budgets that contained significant new investments in infrastructure, transit, and housing, Budget 2018 primarily confirms previous infrastructure commitments, existing programs, and recent agreements, such as the bi-lateral agreement that the province recently signed with the Government of Canada. Other commitments: 

  • Budget 2018 allocates approximately $800 million from the Trillium Trust in 2018–19 to continue supporting key infrastructure investments across the province, including the Ontario Community Infrastructure Fund and the Small Communities fund. The Trillium Trust is funded from proceeds of the sale of shares of Hydro One

  • The Community Transportation Grant Program that will provide $40 million over five years to help municipalities, Indigenous communities, Indigenous‐led organizations and not‐for‐profits improve travel options in areas that are not served or are underserved by public transit and intercommunity bus service (previously announced)

  • Increasing Ontario Municipal Partnership Fund (OMPF) funding by an additional $5 million in 2018 to a total OMPF envelope of $510 (announced in previous budgets) 

  • Ontario Community Infrastructure Fund (OCIF) funding will increase to $300 million per year by 2018–19 to support the construction and renewal of critical road, bridge, water and wastewater infrastructure (previously announced)

  • In 2018–19 connecting links funding will increase by $5 million to $30 million, benefiting 22 municipalities (previously announced) 

  • An increase in the gas tax from 2 cents to 4 cents by 2021-22 (previously announced)

Broadband Infrastructure

  • $500 million over three years to expand broadband connectivity in rural and northern communities. This will include an investment of up to $71 million towards improving cellular coverage in eastern Ontario, and up to $20 million to Telesat to support a Low Earth Orbit (LEO) satellite constellation project

Regional Economic Development

  • Additional investments of $100 million over the next 10 years for the Southwestern Ontario Development Fund and the Eastern Ontario Development Fund

 Public Library Funding:

  • $28 million over three years to create a provincial Digital Public Library that provides access to digital content 

  • An increase in the Public Library Operating Grant by $51 million over three years


  • An additional $64 million over three years to enhance existing cyber-security programs and practices (primarily at the provincial level) 

 Regional Transit Integration

  • A commitment to undertake regional transit planning, including a new commitment to explore potential provincial ownership of the TTC and other regional transit assets

  • A number of new initiatives around fare integration in the GTHA

 Railway Right-of-Way Property Taxation 

  • Railway right-of-way property tax rates for 2018 will increase by approximately $7 per acre for 2018

  • The lowest property tax rates on mainline railway rights-of-way will be increase to a minimum of $110 per acre in 2018

  • Municipalities will have the option to increase rates per acre on high-tonnage rail lines based on a new adjusted tax rate schedule (Details of the schedule will be released in the spring)

  • The Province will continue to freeze shortline railway property tax rates at 2016 levels

Airport Taxation

  • Conducting a review of the current approach used to calculate payments in lieu of property tax (PILT) for municipalities that have airports and collect taxes under this method

 Business Vacancy Rebate and Reduction Programs 

  • Beginning in 2019 the education portion of property taxes will be aligned with changes that municipalities have made under the vacancy rebate and reduction program to ensure that they are consistent 

 MPAC Large Business Property Advanced Disclosure Process 

  • In order to help strengthen MPAC's Advanced Disclosure process, the valuation date for all property assessments for the 2021 taxation year will be January 1, 2019

 Other MPAC Property Tax Updates

  • A commitment to reviewing the format of MPAC’s requests for information to ensure that they are clear and reasonable and introducing amendments in the fall of 2018 to provide a framework for addressing non-compliance


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