2024 Ontario Budget: Populism and Favoritism

I have two propositions to explain the Ford Government’s new budget. First, as an avowedly populist government it attempts to follow public opinion in its broad strokes. Second, in the details it rewards its electoral base of primarily rural and suburban voters. Let me explain.

The budget consultation survey I discussed in a recent post had four choices for the budget: managing the cost of inflation (chosen by 31 percent), providing support for groups within the population to keep costs down (29 percent), tax credits for certain expenses (15 percent), and eliminating the deficit (10 percent). It should come as no surprise that the budget focused on targeted cuts in in government fees or household expenses regulated by government, included no broader tax cuts, and accepted an increase in the deficit from $3 billion dollars for the fiscal year just concluding to almost $10 billion in the new fiscal year. The increase in the deficit is based on forecasts of a slowing economy, so one could say that the Ford Government is following a Keynesian approach, though it would never use the term.

Political Targeting

The targeted cuts include extending for another six months the temporary gasoline tax cut that has now been in place for two years, continuing the post-secondary education tuition freeze into its sixth through ninth years, freezing driver’s licence fees (in addition to the elimination of vehicle plate renewal fees), rescinding excise tax increases on beer and wine, and increasing consumer choice in automobile insurance to reduce premiums. The “temporary” gasoline tax cut reminds me of an Ottawa in-joke. Three things in life are permanent: death, taxes, and the temporary buildings (erected to house the expanded World War Two bureaucracy and remaining in use for many decades). These politically targeted fee and tax cuts are starting to add up to a lot of money, and an alternative would have been broader cuts to personal or corporate income taxes or the PST. But broader tax cuts are not politically targeted at people likely to vote for Ford or at swing voters.

Going forward, I can foresee the Ford Government using further cuts to the gasoline tax to nullify future increases in the carbon tax by the Trudeau Government, or perhaps making a dramatic change in the gasoline tax – even eliminating it – as part of the 2026 election campaign and challenging the opposition parties to match it. I regret to say that they probably would.

Another fee cut I was expecting to see in this budget is in recreational fees, such as hunting licences or camping in provincial parks, both of which would target Ford Nation (which is the Premier’s X-handle). Perhaps the government is saving these for the 2026 election.

Autos before Transit or Environment

The Government’s biggest area of infrastructure spending, by far, is on transportation. And the largest part of that – sixty-eight billion over 10 years – is for transit. In contrast, highways account for $27 billion over ten years. But highways are always cited first, for example in the budget speech and in the budget documentation. In the budget speech, I noticed that Finance Minister Bethlenfalvy presented relatively minor highway improvements, such as the new interchange at Banwell Road and the E.C. Row Expressway in Windsor, before mentioning the four subway lines in Toronto. The Ford Government discusses highway improvements – targeted at its rural and suburban base – before subway lines, which are necessary, but which will carry lower-income Toronto residents who are more likely to vote NDP or Liberal.

The budget survey asked about priorities for infrastructure, and respondents ranked highways dead last at three percent. But the Government believes highways appeal to its base. In his speech to the legislature, Bethlenfalvy called Highway 413, its largest highway project, “overdue relief … for people across Peel, particularly in Brampton” and disparaged its opponents as “a handful of politicians and activists who live outside the region.” In the Ford Government’s thinking, roads benefiting voters in swing ridings matter, but the environment doesn’t.

Rural High-Speed Internet

The Government is spending $3.3 billion over 3 years to extend high-speed internet to “every community in Ontario.” This is a considerable portion of its discretionary spending and is yet another example of targeting rural voters who are part of its electoral base.

The Best Medical School in Vaughan

One initiative that caught my eye is the Government’s commitment to build a new medical faculty for York University to train family physicians. Getting a new medical school has been a perennial desideratum for York University. But it will be located, not on York’s main campus, despite its ample land and TTC subway station (another long-time York desideratum), but at a new location in Vaughan. Vaughan, like Brampton, is part of the Government’s suburban base, and indeed the seat for Vaughan-Woodbridge is held by Michael Tibollo, who is Associate Minister for Mental Health and Addictions. And the contiguous seat of King-Vaughan is held by Education Minister Stephen Lecce. I wonder if they had anything to do with the choice of a location.

Looking to the 2026 Election

The Ford Government is at the mid-point of its mandate, though one would think it is in full election mode, given the millions of dollars it is spending on feel-good advertising. If a mid-term budget is so focused on bolstering political support, one can only imagine what its next two budgets will look like.

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