February 10, 2021, Minister of Finance and President of the Treasury Board, Peter Bethlenfalvy, released Ontario’s 2020-21 Third Quarter Finances and provided an update on the province’s economic and fiscal outlook. The report demonstrates that the government is projecting to spend $25 billion more than last year, including an additional $2.6 billion since the 2020 Budget, released in November.
This afternoon, Minister of Labour, Training and Skills Development, Monte McNaughton, provided an update on COVID-19 workplace inspections by the Ministry. Since the start of 2021, provincial offences officers have visited more than 2,300 big box stores and other essential retail businesses. Over three consecutive weeks, there has been a 19% increase in the number of businesses complying with provincial health guidelines. However, 218 tickets have been issued to businesses and individuals for non-compliance over the course of 16 inspection campaigns.
The government also announced the extension of electricity rate relief for families, small businesses, and farms today, while the province maintains the Stay-at-Home order in most public health units. Electricity prices will continue to be held at the off-peak rate of 8.5 cents per kilowatt-hour, 24 hours per day, seven days per week, until February 22, 2021.
2020-21 Third Quarter Finances and Economic and Fiscal Outlook
This morning, Minister Bethlenfalvy released Ontario’s 2020-21 Third Quarter Finances and provided an update on the province’s economic and fiscal outlook. Key points highlighted in the Third Quarter Report include the following:
- Recent key economic indicators show that a significant economic rebound has occurred since last spring, but the global economy has not fully recovered to its pre-pandemic level.
- Ontario’s real gross domestic product (GDP) increased 9.4 per cent in the third quarter of 2020, following two consecutive quarterly declines. Real GDP in the quarter was 5.7 per cent below the 2019 Q4 level.
- Between May 2020 and January 2021, Ontario employment has risen by 729,100 net jobs, but remained 405,600 (−5.4 per cent) below its pre-pandemic level.
- Interest on debt is projected to remain unchanged from the $12.5 billion forecast in the 2020 Budget.
As of the third quarter, the government has fully allocated all time-limited funding and contingencies for the current fiscal year, in order to remain responsive to challenges posed by the COVID-19 pandemic. This contingency funding totals $13.3 billion, which has been used to increase hospital capacity, purchase critical supplies and equipment, prepare for the vaccine rollout, and support Ontario’s small businesses.
In addition, Minister Bethlenfalvy announced that the government is using the fiscal reserve to top up the standard emergency fund, making an additional $2.1 billion in contingency funding available for spending before the end of the current fiscal year. Access to this additional funding will enable the government to continue responding to the second wave of COVID-19 and managing emerging variants.
Today’s report shows that the government is projected to spend $25 billion more in 2020-21 than in the previous fiscal year. Projected spending includes an additional $2.6 billion since the release of the 2020 Budget in November.
The report also projects a deficit of $38.5 billion in 2020-21, which is unchanged from the deficit outlook projected in the 2020 Budget and the 2020-21 First Quarter Finances. Minister Bethlenfalvy noted that while the current level of spending is “not sustainable in the long-term,” it is a short-term necessity so that Ontario can overcome the COVID-19 pandemic and begin the process of economic recovery.
The government’s next fiscal update will be in the 2021 Budget, which will be released by March 31.