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November 2020

NEW - ON: Key items in provincial budget could benefit Ontario’s propane sector

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On November 5, 2020, Ontario Finance Minister Rod Phillips released his first full Ontario Budget, which has been delayed due to COVID-19. It provides an economic platform that will be further developed in the next budget, set for March 2021.

The 2020 Ontario Budget emphasizes three pillars of economic support:

Protect: $7.5 billion in new spending on healthcare, dedicated to combatting COVID-19. This is in addition to the existing $7.7 billion in supports to date and includes investing an additional $572 million in hospitals for pandemic-incurred costs.

Support: $2.4 billion in new measures for individuals and businesses, including an additional $1.8 billion in funding for the Support for People and Jobs Fund over the next two years.

Recovery: $4.8 billion in recovery funding, including an investment of $680 million over the next four years in broadband infrastructure, aimed at northern, remote and rural Ontario, and an additional $57 million for the Digital Main Street program to help small businesses enhance their online presence.

 Highlights

The Budget proposes significant program spending in a number of key areas which could benefit Ontario’s propane sector. Specifically:

1. Infrastructure - Major investments will be made in transit, highways, schools, hospitals and broadband, totalling $142.9 billion, including $13.6 billion in 2020–21, over the next 10 years.

2. Business Support - The following key measures were announced:

  • $60 million for one-time grants of up to $1,000 for eligible small businesses — in retail, food and accommodations, and other service sectors, to offset the unexpected costs of personal protective equipment (PPE).
  • $50 million for the Ontario Together Fund to support businesses who retool their operations to manufacture essential medical supplies and equipment or provide other innovative solutions to the pandemic.
  • New measures to improve access to high-speed internet and cell service for households, businesses, and farms across Ontario, including an additional $150 million for the Improving Connectivity for Ontario program.
  • New funding for the Investing in Canada Infrastructure Program (ICIP). This represents over $1 billion in federal and provincial funding under the newly established COVID-19 Resilience stream. This will support health and safety through the accelerated delivery of priority municipal infrastructure projects and projects to retrofit schools and long-term care homes.
  • $300 million to assist eligible businesses to pay costs associated with property tax and energy bills, in any region in Ontario where the province determines recently modified Stage 2 public health restrictions are necessary. As previously reported, this program includes propane costs.
  • An additional $1.8 billion in funding for the Support for People and Jobs Fund over the next two years.

3. Tax Measures - A number of tax measures to stimulate the economy include:

  • Lowering Business Education Tax rates for over 200,000 employers, or 94 per cent of all business properties in Ontario, to a rate of 0.88 per cent.
  • Giving municipalities the ability to cut property tax for small businesses and a provincial commitment to consider matching these reductions.
  • Making the exemption to the Employer Health Tax (EHT) permanent, which translates into almost 90 per cent of employers paying no EHT, saving them $360 million in 2021–22 that could be reinvested in jobs and growth.
  • Providing a six-month interest- and penalty-free period to make payments for most provincially administered taxes.
  • Allowing a six-month deferral of premium payments to the Workplace Safety and Insurance Board.

4. Tourism - $100 million over two years for the Community Building Fund to support community tourism, cultural and sport organizations.

5.  Energy Sector - Starting January 1, 2021, approximately 85 per cent of the current high‑cost wind, solar and bioenergy contracts, entered into under the previous government, will be funded by the province, not ratepayers. Will result in medium size and larger industrial and commercial employers saving about 14 and 16 per cent respectively, on their electricity bills.

6. Skilled Trades Strategy - Modernize Ontario’s skilled trades and apprenticeship system and help enable the province’s economic recovery by breaking the stigma, simplifying the system and encouraging employer participation.

7. Regulatory Revisions - If passed, the Better for People, Smarter for Business Act, introduced in October 2020, will modernize regulations and streamline processes to help stimulate productivity and economic growth. Proposed changes in the Act, along with other measures, include: requiring gas and electric utilities to adopt the Green Button Connect My Data and Download My Data standard to help Ontarians better understand their energy use and reduce costs;  supporting renewable and alternative fuels and emissions reduction technology; and allowing single traffic studies for entire highway corridors or areas to reduce duplication and allow developers to begin projects more quickly.

8. Environmental Health and Safety - The budget also proposes to protect the environment and the health and safety of Ontarians by: tracking hazardous waste and helping intercommunity bus carriers fill service gaps and meet local community transit needs.

Fiscal Overview 
The 2020–21 deficit is projected to be $38.5 billion. Program spending is set to grow by an annual average rate of 4.2 per cent between 2019–20 and 2022–23, primarily due to COVID-19-related temporary expenses. Ontario’s 2020–21 net debt-to-GDP ratio is now forecast to be 47.0 per cent, compared to 47.1 per cent at the time of the 2020–21 First Quarter Finances.

The CPA will monitor passage of the budget bill and announcements on the initiatives impacting the province’s propane providers and provide members with timely and relevant updates. The Association will also look into some of the opportunities to ensure propane is part of the programs offered.

 

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