Attention Ontario taxpayers – will you be affected by the new budget? The Ontario Liberals tabled their 2016-2017 provincial budget on Thursday to much fanfare – and it was full of goodies for taxpayers, along with a few surprises.
Check out our breakdown of the Ontario budget highlights – and whether they’ll save you some cash.
Free Tuition for Low-Income Students
One of the biggest newsmakers is free tuition for low-income students. The Liberals are cutting red tape and simplifying the process of applying for financial aid to cover the rising cost of post-secondary education, and are introducing a new Ontario Student Grant. Students from families earnings $50,000 or less a year will be eligible for a grant that will cover tuition fees. That’s not all – half of students from families earning $83,000 or less a year will qualify for grants. In the end, the Liberals say no student will end up with less grant money than they’re currently receiving.
The Canadian Federation of Students applauds the move to make post-secondary education more affordable and accessible for all students.
“Before, we were really penalizing low-income and marginalized students, forcing them to take on loans and to pay interest and effectively paying more for their education than students who could afford it up front,” said Ontario spokesman Rajean Hoilett.
Related Read: Are Canadian Students in Debt Denial?>
Gas Costs to Rise for Drivers
While students have lots to smile about, drivers have one more reason for road rage; gas prices are to rise by 4.3 cents per litre in 2017. The price increase is part of the province’s efforts to reduce emissions by 15 per cent. They’ll be rolling out a cap-and-trade program for businesses, and adding a surcharge on fuel costs. The hike is expected to cost drivers roughly $10 – $13 per more per month, and homeowners $5 monthly on fuel and natural gas prices.
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Low-Income Seniors to Benefit
The budget includes big changes for seniors – but it’s a good news / bad news story depending on income. Low-income seniors are catching a break on rising drug costs, while the co-pay and deductible are rising for middle-income seniors. In fact, some seniors will see their yearly deductible go up by 70 per cent.
However, under the budget, more seniors will qualify for the Ontario Drug Benefit program, as the income threshold is raising to $19,300 from $16,018 for single seniors and $32,300 from $24,175 for couple seniors. While the co-pay per dug will remain at $2 for low-income seniors, for middle-income seniors the deductible will rise to $170 from $100 and the co-pay will increase to $7.11.
Ontario’s Mounting Debt
Ontario’s ballooning debt continues to be a major concern. The net debt of the Heartland Province will reach a whopping $308 billion in 2016-17, the largest of any sub-national jurisdiction in the world. With a deficit of $5.7 billion, the 2016-17 budget will mark the ninth straight budget in the red. Despite being on track to reach a balanced budget ahead of schedule by 2017-18, Ontario is set to fork over $13.1 billion in interest payments in 2018-19.
Ontario’s record level debt-to-GDP ratio has led to a credit downgrade with debt rating agencies, such as Standard & Poor’s and Moody’s Investors Service. The ratio currently sits at 39.6 percent for 2015-16 and is expected to remain near 40 percent, only starting to decline in 2017-18 once the budget is balanced. The provincial Liberal’s goal is to get the ratio back to its pre-recession level of 27 percent, although it’s currently nowhere near that level. Only time will tell if the Liberals can fulfil that election promise.