OCASI Comments on Ontario Budget 2014


May 2, 2014 - Ontario Budget 2014 tabled yesterday in the legislature by Finance Minister Charles Sousa contains a variety of proposed investments that can benefit immigrants and racialized families and individuals, groups that are over-represented among Ontario’s low-income population.

Projected expenses for next year include $120.7 million for Ministry of Citizenship and Immigration (MCI), compared to $130 million for 2012-13. MCI funds the Newcomer Settlement Program as well as Ontario Bridge Training – important supports to help newcomers settle in Ontario and enter the labour market in jobs that use international skills and experience. OCASI understands the change is a combination of internal reallocations and cuts in federal transfers for the bridging program, but will not result in reduction in services or funding for newcomer services.

Ministry of Training Colleges and Universities budget is set at $7.8 billion, compared to $7.3 billion in 2012-13. The additional $492.8 million includes investment in capital allocations for repairs and maintenance on college and university campuses. It is not clear how much (if any) would be allocated to training and employment supports for recent immigrants.

The following highlights are of interest:

  • Ontario Child Benefit will be increased and indexed to inflation, as will the minimum wage. At the end of January 2014 the government announced the minimum wage will be increased to $11 per hour as of June 1 – the first increase in four years. The promised amount falls short of the $14 per hour outlined in the community-based Campaign to Raise The Minimum Wage, which would bring wages to 10% above the poverty line.
  • Full-day kindergarten is to be expanded to include all 4 and 5 year olds, a measure that will be welcomed by many immigrant and other low-income parents. More needs to be done in this area, such as the development of a comprehensive childcare strategy for Ontario that would include more affordable childcare options for all residents.
  • Access to dental services, drug, mental health and assistive devices coverage will be expanded for low-income children and youth – a welcome measure that promises to benefit many low-income families.
  • The income threshold for legal aid eligibility will be increased, expanding access to justice for more residents. This will be a significant benefit to immigrants, a group that faces multiple barriers to access to justice.
  • Social assistance rates will be increased by 1% for adults on OW and those with disabilities on ODSP, and a further top-up for single adults without children on OW.
  • A new Ontario Retirement Pension Plan is introduced. The mandatory plan will require Ontarians without company pension plans to pay upto 1.9 per cent of their income — matched by employers — into a provincial pension plan in 2017. The proposal is meant to address the gaps in the federal Canadian Pension Plan. Ontario’s population of those aged 65 and over is projected to more than double from about 2.0 million (14.6% of the population) to almost 4.2 million (24.0 % of the population) by 2036.
  • Increase in investment in Community Homelessness Prevention Initiative and in funds to match federal investments in affordable housing programs. The Co-Operative Housing Federation of Canada has said 156,000 Ontario households are on affordable housing waiting lists. The increased funds will help to improve access to affordable housing.
  • Provincially-funded infrastructure projects are to provide job opportunities to at-risk youth, local communities and veterans. This proposal can be made stronger by applying principles of Employment Equity, targeting opportunities to all equity groups since they tend to be under-represented in good jobs and over-represented among those in poverty.
  • Wages for early childhood educators and personal support workers will be increased. Both areas of work feature an over-representation of women workers. The increase will help to redress the troubling wage gap for these workers.
  • The province will continue to work on integrating all employment services into Employment Ontario. It is important to ensure that the new architecture will meet the needs of groups that are disadvantaged in the labour market as well as the EI system, such as recent immigrants.
  • A new local Poverty Reduction Fund is created to support local solutions to poverty. The Province expects to soon launch the next five-year plan for Ontario’s poverty reduction strategy. We look forward to the introduction of targeted measures such as disaggregated data collection which will help the government to measure the impact of fiscal policy on different communities.
  • The Budget proposes a small increase of 1.56% to personal income taxes for Ontarians making more than $150,000 a year, and moves the starting point for the highest tax bracket down from $514,900 to $220,000 – an increase of 3.12%. The changes are expected to raise more than half a billion in revenue and are expected to impact only a small percentage of Ontarians. Approximately 98% can expect no increase in their personal income tax.
  • The Budget also proposes restrictions to the Small Business Deduction to small businesses only, which would close the gap that gave large Corporations an unfair tax break.