Ontario Budget 2012: Liberals To Table Budget On March 27; Deep Cuts Expected

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TORONTO - There will be less spending on roads and bridges and increased fees for businesses when Ontario's minority Liberal government tables its budget March 27, Finance Minister Dwight Duncan said Thursday.

There will also be spending cuts across many ministries to make sure Ontario stays on track to eliminate the $16 billion deficit within five years, he added.

"This is going t.o be a comprehensive, very large budget that will lay out the path to balance with some difficult choices in it," Duncan told reporters as he announced the budget date.

"It’s going to lay the path to a much better future, and it’s going to address problems that successive governments of all political stripes have not wanted to address."

Premier Dalton McGuinty told rural municipal leaders recently that Ontario cannot afford a promised fund to pay for road and bridge repairs, and the cash-strapped government hopes to save even more by cutting spending on other infrastructure projects in the budget.

"One of the pieces in the budget will be significant reductions in infrastructure spending in the coming years that will save us hundreds of millions of dollars in interests costs," said Duncan.

Earlier this week the Liberals increased fees between $4 and $10 each for drivers licences, for a driver's exam and for registering a vehicle, along with increases in permit fees for truck and bus operators, trailers, farm, off-road and snow vehicles

The budget will contain similar fee increases aimed at businesses, but none "that would affect families or individuals," said Duncan.

"We are looking at a number of fees that haven’t been raised in 25 years in some instances."

The Liberals have a fine line to walk in the budget to protect gains they've made in health care and education while also finding enough savings to eliminate the deficit by 2017-18, or face an expensive credit downgrade.

They also have to make sure the budget contains measures that at least two opposition party members will vote for, or Ontario will be plunged into its second election campaign in five months.

The minority government is expected to seek support for the budget from the NDP, who want the Liberals to delay already-scheduled cuts in the corporate tax rate, from 11.5 to 10 per cent.

"We discussed returning the corporate tax rates to their original (14 per cent) rate, and we’ve also discussed _ at a minimum _ freezing them," said New Democrat Jagmeet Singh.

"That’s not simply enough on its own to ensure that we’re for or against the budget. We need to see the entire document."

The Progressive Conservatives want the budget to include a plan to reduce the size and cost of government, and a job-creation strategy.

The Opposition fears the Liberals will delay the corporate tax cuts in order to get NDP support for the crucial budget vote.

"There is a concern that they are going to put a pause in the corporate tax cut, which most economists would indicate is probably the worst thing that you can do at this time," said deputy PC Leader Christine Elliott.

"We really need to have lower business taxes in order to attract businesses to invest in Ontario, and when you look at other provinces that have gone forward with those tax reductions, they’re doing much better than we are."

The government had already announced that more than $2 billion worth of grants, tax credits and other direct subsidies for businesses were on the line in the budget.

It is reviewing at least 50 different business support programs across eight different ministries, worth about $1.3 billion a year, plus another $1 billion annually in business tax credits, but promised not to touch film and television tax credits.

Economist Don Drummond, who called business grants "vague and difficult to measure," recommended hundreds of cuts to programs and services so the government could limit its overall spending increase to just 0.8 per cent a year for five years.

The Liberals want to hike education spending by one per cent, and let health care rise by 2.5 per cent, which would mean deep cuts in many other ministries to cap overall growth at 0.8 per cent.

The Liberals rejected Drummond's call to eliminate all-day kindergarten, which will cost $1.5 billion a year, and also dismissed his recommendation to end the 10 per cent rebates on electricity bills, which would save another $1.1 billion a year.

The Liberals are addicted to spending and have no ideas to actually save the province money, charged the Tories.

"This approach to government is unsustainable, irresponsible and reckless," said Elliott.

The federal Conservative government has increased spending by 65 per cent since it was first elected, the same amount Ontario's spending was increased by its Liberal government during the same time frame, countered Duncan.

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