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• Minister Sousa brags of fiscal prudence while running $6.7 billion deficit
• Government plans on running six years of deficits while simultaneously raising income taxes

Ontario 2018 Budget: Bigger deficits, more spending, higher taxes


By -- Christine Van Geyn, CTF Ontario Director——--March 28, 2018

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Ontario 2018 Budget: Bigger deficits, more spending, higher taxes TORONTO, ON: The Canadian Taxpayers Federation (CTF) is highly disturbed by the budget released today by the Ontario government. There has been much speculation over the past few weeks over the size of the deficit, which was today revealed to stand at $6.7 billion. But it was also confirmed that the government plans to continue to run deficits for six years or two elections from now. "The finance minister re-committed in November that his government would balance the budget this year. Now we are learning that instead, there will be a $6.7 billion deficit. They didn't just miss their own target, they blew right past it. It's like they aren't even trying," said CTF Ontario Director, Christine Van Geyn.
The budget includes record spending this year of $158.5 billion, or $11,167 per person. Once again, interest on debt is one of the largest single expenses in the budget, at $12.5 billion. Much of the new spending had already been announced prior to the budget, including $2.2 billion over three years for subsidized child care for children over two-and-a-half, regardless of the parent's income. "Ontario obviously has not learned from Quebec's experience with universal childcare," said Van Geyn. "Quebec now considers the ability of parents to pay for daycare as a part of their government system. Frankly, it makes no sense for low-income taxpayers to subsidize the childcare for wealthy families." The government also revealed its plan to increase taxes on middle-class Ontarians. Changes to Ontario's income tax will remove the legacy surtax, which is a special tax applied on top of the income tax. Instead, income taxes will now be applied directly to taxable income. However, the proposed new rates will result in a tax increase for Ontarians earning over $71,500. The government expects this tax increase to cost taxpayers $275 million this coming year. About 1.8 million Ontarians will be impacted by this tax increase, while about 680,000 will see a small tax reduction. "The changes to Ontario income taxes will mean a tax increase for 1.8 million Ontarians, who are already overburdened. The government could have just removed the surtax and not raise income taxes. Wynne and Sousa chose to raise taxes," said Van Geyn. The budget also revealed plans to remove certain tax exemptions for small employers. The employer tax health exemption, currently available to 85 per cent of Ontario employers, will be cancelled for about 20,000 employers. This change will cost these employers $2,400 more per year on average, for a total taxpayer cost of $10 million this year. Additionally, the government is planning on mirroring some of the recent federal tax changes, including the changes regarding passive income and income sprinkling. "The government can't even balance the budget when they raise our taxes by hundreds of millions of dollars," continued Van Geyn. "They're spending more, running bigger deficits, increasing our taxes, and have no plan to balance the budget if re-elected. Meanwhile, Sousa is bragging about beating fiscal targets. It's really quite disturbing."

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Canadian Taxpayers Federation -- Christine Van Geyn, CTF Ontario Director -- Bio and Archives

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