There’s less than meets the eye in Ontario’s COVID-19 plan

Posted on March 25, 2020 in Governance Policy Context

Source: — Authors: – Opinion/Star Editorial Board

In a few short weeks the coronavirus pandemic has transformed our economy and society and left people wondering when it will end and what on earth our communities will look like when it does.

Through it all Premier Doug Ford has been uncharacteristically calm and reassuring with his promise that his government “will spare no expense” to get Ontarians through the crisis.

Finance Minister Rod Phillips’ fiscal update on Wednesday was the opportunity to actually deliver the big funding increases that Ontario’s health-care system desperately needs at this time. As well as the enhanced financial supports that struggling Ontarians and businesses will need.

But the government’s plan is not nearly as big as its $17-billion price-tag makes it sound. And it’s unlikely to be enough to meet the challenge.

It’s also based on what seem like very optimistic assumptions that COVID-19 will have barely any effect at all on government revenues from income and business taxes; that Ontario’s historic low unemployment rates somehow won’t rise much this year; and that the province will already be back to growth in the second half of the year.

We certainly hope Ford and Phillips are right about all that. But given how things look right now, it’s a positively rosy outlook.

The government’s plan includes up to $10 billion in tax deferrals, primarily targeting businesses, and a $3.3 billion increase to health care spending.

But health care dollars never go as far as governments like to claim. Hospitals, for example, are getting $935 million under this plan, which isn’t far off what they said they needed just to maintain the existing level of care before the coronavirus threw everyone’s best-laid plans out the window.

Similarly, the promised $3.7 billion in “direct support for people and to protect jobs” is far more modest than it first appears.

Right off the top, $1.5 billion of that goes to continuing the existing hydro subsidies that cut everyone’s electricity bills, whether they need the help or not, by 25 per cent.

When it comes to new and direct income supports to people who are struggling because of the pandemic, there isn’t much here.

Parents with children under 12 will get a one-time payment of $200 ($250 for those with special needs). Ontario’s lowest-income seniors will get up to $83 with a doubling of a guaranteed income benefit for six months.

But unlike Quebec, B.C, Alberta, Saskatchewan and even little P.E.I., there’s no plan for direct cash payments to help those who have lost work or been forced to isolate because of COVID-19.

Ford, Phillips and finance officials say this is because Ontario doesn’t want to duplicate what Ottawa is already doing for workers by speeding up access to unemployment benefits and creating a new benefit programs for the many workers who don’t qualify for EI at all. They say Ottawa has more fiscal capacity than Ontario and governments should work together.

Fair enough. But plenty of other provinces are jumping in to enhance the Trudeau government’s stimulus package with their own measures, believing it is a necessary provincial role.

B.C. created a one-time emergency benefit of $1,000 for workers who have lost income because of COVID-19. Quebec announced a $573-weekly payment for those eligible in isolation.

The Ford government, by contrast, seems keen to leave the heavy lifting to Ottawa.

That won’t work. This pandemic requires every level of government to step up and support those who have lost their incomes.

“COVID-19 has emerged as a monumental threat to our health and to our economy,” Ford said.

He’s right. That’s why Ontarians need more from their government than it’s planning to provide.

And the government has the ability to deliver more. It made much of its prudent planning in setting aside record sums in contingency funds, as well as a $2.5 billion reserve fund.

More of those dollars need to be put in the hands of struggling Ontarians. And now, not when it may be too late to help them.

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