Liberals bring back health premium
FROM CANADIAN PRESS
A solemn Liberal election pledge to freeze taxes and balance Ontario's books was shunted aside today in a provincial budget that taps taxpayers for $9 billion over four years to finance a spending spree on everything from heart surgeries and hip replacements to home care and health centres.
An annual Ontario health "premium" will start coming off paycheques this summer, costing taxpayers between $300 and $900 a year depending on income, Finance Minister Greg Sorbara said as he delivered the government's all-important first budget.
The cost of cigarettes, alcohol and driver's licence renewals will also go up as part of the seven-month-old government's plan to inject billions into health and public education - what Sorbara described as more important priorities.
Sorbara was frank about the decision to abandon what observers have described as a cornerstone of the successful Liberal election campaign: a promise to leave taxes alone and eliminate the deficit in their first year.
It was either that or do what Ontario voters really wanted, he said: restore the fiscal fitness of the province's hospitals, clinics and classrooms.
"It's the reality of the work that we do," Sorbara said before his speech, adding Ontario voters are prepared to give the Liberals the benefit of the doubt.
"I think our credibility, as we move towards enhancing the quality of public services, will only increase. I'm aware of the commitment; we're not able to keep the commitment."
Smokers will pay $2.50 more per carton of cigarettes starting Wednesday, while the cost of a bottle of wine will climb 15 cents and a case of beer 45 cents June 21. Together, both measures will generate $135 million for provincial coffers this year.
But it was the health premium scheme that raised the hackles of political critics. The plan is worth $1.63 billion in the first year, climbing to $2.6 billion by 2008, and dedicated to paying for $4.8 billion in additional health-care spending over the next four years.
"I think this is the most regressive tax in Ontario history," said New Democrat Leader Howard Hampton. "This is a tax which will hit every modest and middle-income family. The government is literally picking the pockets of the wrong people."
"They are going to see a fight in the Ontario legislature like they haven’t seen in a generation," thundered a furious John Baird, who was ejected from the legislative chamber after calling Sorbara a liar.
"It’s like a declaration of war on the middle class, who are going to bear the brunt of all these new taxes and user fees."
The budget also forecasts a $2.2-billion deficit this year and lays out a plan to eliminate it by 2008 - a far cry from Premier Dalton McGuinty's controversial pledge during last fall's election campaign to balance the budget in the government's first year.
Running multi-year deficits and raising revenue are "choices that are inconsistent with our election commitments; we openly acknowledge that," Sorbara said in his speech.
"However, it would simply not be possible to deliver a balanced budget this year without destabilizing vital public services and perhaps even the economy itself. Such an approach would be irresponsible, and we reject it."
Conservative Leader Ernie Eves, who suffered a resounding defeat at the hands of the Liberals in October, could barely contain his contempt.
"Welcome to the new reality," the former premier sneered. "I guess the plan for change was all about changing the plan."
The cost of renewing a driver's licence in Ontario will also increase to $75 from $50, while reinstating a suspended licence will cost $150, up from $100. A host of small-claims court costs and fees will also be higher.
A $3.9-billion windfall resulting from the government's decision to lift the Conservative cap on hydro rates will be applied directly against the $6.1-billion deficit in the current fiscal year. From there, it falls to $2.1 billion next year and $1.5 billion the next before disappearing in 2008.
Hampton dismissed the plan as creative accounting and accused the government of using "the worst kind of Nortel tactics, the worst kind of Enron tactics" to shrink the deficit.
Chickenpox, meningitis and pneumonia vaccinations will also be available to Ontario children at a cost to taxpayers of $156 million over three years - roughly what the government will save by ending public health plan coverage for routine eye exams, chiropractic services and physiotherapy services offered outside hospitals and long-term care facilities.
Education reaped a somewhat smaller windfall in today's budget, including a four-year plan to spend $2.1 billion on shrinking class sizes, hiring 1,000 more teachers, improving numeracy and literacy rates and providing stable funding to school boards.
The budget also provides $260 million more to the Ministry of Training, Colleges and Universities, as well as a $20.9-million top-up for the province's student loan program.
Welfare and disability benefits will also increase by $106 million a year - the first increase in 11 years, Sorbara said.
In order to establish premiums, which come into effect in July, the government will have to amend the Taxpayer Protection Act, which requires that any new taxes or tax increases be put to a referendum vote.
A referendum would have cost $40 million, money that would be better spent on health care and education, Sorbara said.
The government will also replace the Balanced Budget Act, but not before members of cabinet cough up about $9,000 of their cabinet salaries - nearly $17,000 in McGuinty's case - as the law requires in the event of a budget deficit, Sorbara said.
The government promised to reduce waiting times for major services including cancer and cardiac care and joint-replacement procedures, and unveiled plans to establish nine new MRI and CAT scan locations across the province.
Some $600 million will go towards establishing 150 "family health teams" comprised of doctors, nurses, nurse practitioners and other health care providers available to patients around the clock - a concept long considered the cornerstone of primary care reform.
The budget also includes measures to expand home care, create more long-term care beds, expand community mental health services and boost the bottom line for hospitals by $1.6 billion a year over four years.
The government's share of public health funding will increase from 50 per cent to 75 per cent by 2007, a response to recommendations made in a pair of key reports on last year's deadly SARS outbreak in Toronto.
A planned overhaul of the way Ontario collects taxes and enforces tax laws is also projected to generate annual savings of $465 million by 2006.
The budget also detailed a "new deal" for municipalities that will see the province begin sharing gasoline tax revenues, starting at one cent a litre in October and ramping up to the promised two cents by 2007.
Other budget measures include $3.3 billion this year alone to rebuild the province's crumbling infrastructure, a new Northern Ontario Grow Bonds program to foster economic development, more than $400 million for clean drinking water programs and modest help for farmers.
FROM CANADIAN PRESS
A solemn Liberal election pledge to freeze taxes and balance Ontario's books was shunted aside today in a provincial budget that taps taxpayers for $9 billion over four years to finance a spending spree on everything from heart surgeries and hip replacements to home care and health centres.
An annual Ontario health "premium" will start coming off paycheques this summer, costing taxpayers between $300 and $900 a year depending on income, Finance Minister Greg Sorbara said as he delivered the government's all-important first budget.
The cost of cigarettes, alcohol and driver's licence renewals will also go up as part of the seven-month-old government's plan to inject billions into health and public education - what Sorbara described as more important priorities.
Sorbara was frank about the decision to abandon what observers have described as a cornerstone of the successful Liberal election campaign: a promise to leave taxes alone and eliminate the deficit in their first year.
It was either that or do what Ontario voters really wanted, he said: restore the fiscal fitness of the province's hospitals, clinics and classrooms.
"It's the reality of the work that we do," Sorbara said before his speech, adding Ontario voters are prepared to give the Liberals the benefit of the doubt.
"I think our credibility, as we move towards enhancing the quality of public services, will only increase. I'm aware of the commitment; we're not able to keep the commitment."
Smokers will pay $2.50 more per carton of cigarettes starting Wednesday, while the cost of a bottle of wine will climb 15 cents and a case of beer 45 cents June 21. Together, both measures will generate $135 million for provincial coffers this year.
But it was the health premium scheme that raised the hackles of political critics. The plan is worth $1.63 billion in the first year, climbing to $2.6 billion by 2008, and dedicated to paying for $4.8 billion in additional health-care spending over the next four years.
"I think this is the most regressive tax in Ontario history," said New Democrat Leader Howard Hampton. "This is a tax which will hit every modest and middle-income family. The government is literally picking the pockets of the wrong people."
"They are going to see a fight in the Ontario legislature like they haven’t seen in a generation," thundered a furious John Baird, who was ejected from the legislative chamber after calling Sorbara a liar.
"It’s like a declaration of war on the middle class, who are going to bear the brunt of all these new taxes and user fees."
The budget also forecasts a $2.2-billion deficit this year and lays out a plan to eliminate it by 2008 - a far cry from Premier Dalton McGuinty's controversial pledge during last fall's election campaign to balance the budget in the government's first year.
Running multi-year deficits and raising revenue are "choices that are inconsistent with our election commitments; we openly acknowledge that," Sorbara said in his speech.
"However, it would simply not be possible to deliver a balanced budget this year without destabilizing vital public services and perhaps even the economy itself. Such an approach would be irresponsible, and we reject it."
Conservative Leader Ernie Eves, who suffered a resounding defeat at the hands of the Liberals in October, could barely contain his contempt.
"Welcome to the new reality," the former premier sneered. "I guess the plan for change was all about changing the plan."
The cost of renewing a driver's licence in Ontario will also increase to $75 from $50, while reinstating a suspended licence will cost $150, up from $100. A host of small-claims court costs and fees will also be higher.
A $3.9-billion windfall resulting from the government's decision to lift the Conservative cap on hydro rates will be applied directly against the $6.1-billion deficit in the current fiscal year. From there, it falls to $2.1 billion next year and $1.5 billion the next before disappearing in 2008.
Hampton dismissed the plan as creative accounting and accused the government of using "the worst kind of Nortel tactics, the worst kind of Enron tactics" to shrink the deficit.
Chickenpox, meningitis and pneumonia vaccinations will also be available to Ontario children at a cost to taxpayers of $156 million over three years - roughly what the government will save by ending public health plan coverage for routine eye exams, chiropractic services and physiotherapy services offered outside hospitals and long-term care facilities.
Education reaped a somewhat smaller windfall in today's budget, including a four-year plan to spend $2.1 billion on shrinking class sizes, hiring 1,000 more teachers, improving numeracy and literacy rates and providing stable funding to school boards.
The budget also provides $260 million more to the Ministry of Training, Colleges and Universities, as well as a $20.9-million top-up for the province's student loan program.
Welfare and disability benefits will also increase by $106 million a year - the first increase in 11 years, Sorbara said.
In order to establish premiums, which come into effect in July, the government will have to amend the Taxpayer Protection Act, which requires that any new taxes or tax increases be put to a referendum vote.
A referendum would have cost $40 million, money that would be better spent on health care and education, Sorbara said.
The government will also replace the Balanced Budget Act, but not before members of cabinet cough up about $9,000 of their cabinet salaries - nearly $17,000 in McGuinty's case - as the law requires in the event of a budget deficit, Sorbara said.
The government promised to reduce waiting times for major services including cancer and cardiac care and joint-replacement procedures, and unveiled plans to establish nine new MRI and CAT scan locations across the province.
Some $600 million will go towards establishing 150 "family health teams" comprised of doctors, nurses, nurse practitioners and other health care providers available to patients around the clock - a concept long considered the cornerstone of primary care reform.
The budget also includes measures to expand home care, create more long-term care beds, expand community mental health services and boost the bottom line for hospitals by $1.6 billion a year over four years.
The government's share of public health funding will increase from 50 per cent to 75 per cent by 2007, a response to recommendations made in a pair of key reports on last year's deadly SARS outbreak in Toronto.
A planned overhaul of the way Ontario collects taxes and enforces tax laws is also projected to generate annual savings of $465 million by 2006.
The budget also detailed a "new deal" for municipalities that will see the province begin sharing gasoline tax revenues, starting at one cent a litre in October and ramping up to the promised two cents by 2007.
Other budget measures include $3.3 billion this year alone to rebuild the province's crumbling infrastructure, a new Northern Ontario Grow Bonds program to foster economic development, more than $400 million for clean drinking water programs and modest help for farmers.