2016 Ontario budget: Free tuition for low-income students, price increase on alcohol
TORONTO -- University and college will soon be free for low-income students in Ontario, but prices are going up on wine, tobacco, gasoline and heating for most homeowners.
The Liberal government says it's on track to eliminate a $5.7-billion deficit in the next budget largely thanks to managing program spending and fighting the underground economy, but it is hesitant to acknowledge that the partial privatization of Hydro One and a new carbon pricing system are major factors contributing to that goal.
The showcase pledge in the government's 2016-17 budget -- its ninth consecutive in the red -- is to introduce an Ontario Student Grant that would entirely pay for average college or university tuition for students from families with incomes of $50,000 or less.
Under the new program, half of students from families with incomes of $83,000 will qualify for non-repayable grants for tuition and no student will receive less than they can currently receive.
The new grant combines existing programs, and Finance Minister Charles Sousa said he hopes the new one will come at no additional cost to government.
Taxes on cigarettes are rising $3 per carton and wine prices will also rise. The minimum price for a bottle will increase to $7.95 over the next three years.
There will also be a series of increases in the Liquor Control Board of Ontario's markup on wine, starting with a two percentage point hike in June -- about 10 cents a bottle -- followed by another two points in 2017 and 2018, and a one-point hike in 2019.
There will also be annual increases of about 10 cents in the tax on international-blend wines sold in privately owned wine stores, increasing from 16.1 cents to 20.1 cents over four years.
As the government's new cap-and-trade program -- designed to lower Ontario's greenhouse gas emissions -- comes into effect next year, the price of gasoline is expected to rise 4.3 cents a litre and residential natural gas bills will increase $5.
The opposition leaders said the budget makes life less affordable for Ontarians, but Sousa defended increased costs from cap and trade.
"We can all of us have a choice," he said. "We can turn our back and let the low-carbon economy go by, it will cost us even more, or we can embrace it and find innovations in the system to enable us to succeed and compete."
The carbon-pricing scheme is now projected to generate $1.9 billion in revenue next year, up from $1.3 billion estimated a few months ago, based on a price of about $18 per tonne.