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Ontario tries to undo damage from earlier cuts

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TORONTO—Ontario's Progressive Conservative government is reaching into its pockets for hundreds of millions of dollars to undo some of the damage caused by a year of cuts.

Where the spring budget—and last year's fall economic statement—cut from wide swaths of programs and services, yesterday's document tells the story of a host of recent reversals.

There is an additional $1.3 billion in spending, much of it to fund some backtracks on policy changes and cuts that caused the government major headaches.

It comes as the Progressive Conservative government is attempting to adopt a new tone following a tumultuous first year-and-a-half in power.

Finance Minister Rod Phillips said the economic statement shows the government is listening to Ontarians.

“We listened to what they thought was working well in the plan that we had and we listened as well to the concerns that they had,” he said.

“So you can expect that this is a government that is going to listen and continue to listen and make sure that we make adjustments as we go along.”

That said, it doesn't exactly signal the end of future cuts, he suggested.

“I think we'll continue to look at where we can find efficiencies to make sure that we can balance the budget,” Phillips said.

One of the changes that caused the most grief for the government was to the autism file. It didn't involve a funding cut, but would have amounted to service cuts for thousands of children receiving treatment.

The government is putting an additional $279 million into its autism program, boosting the overall budget to $600 million—a figure that has been promised for several months, but families had been skeptical.

An extra $310 million is also going to social services, including reversing the planned cancellation of a child benefit and not going ahead with changes to welfare and disability support earnings exemptions.

Municipalities had been angered when the government announced cuts to child care, public health and ambulance funding, and the fall economic statement shows that partial backtracks on those cuts are costing about $189 million.

NDP Leader Andrea Horwath said that “delaying, backtracking or softening” previous cuts is not new spending.

“All (this document) does is say that the cuts that they made in the last budget were coming too fast, so they're slowing them down,” she said.

Some of the new expenses that don't come from policy reversals include $68 million for small and medium hospitals. Almost half of the total new spending comes from dipping into the contingency fund.

Ontario's deficit is now expected to be $9 billion for this fiscal year, down from the $10.3-billion projection in the budget.

That is still higher than the final figure for last year's deficit of $7.4 billion, though there is a $1-billion reserve and there is still time for the government to beat its projections yet again.

The government is proposing to reduce the small business corporate income tax rate from 3.5 percent to 3.2 percent on Jan. 1, which would cost $95 million when fully rolled out in 2021-22.

People in the North could see cheaper groceries and travel costs, as the province looks to cut the aviation fuel tax rate in the North from 6.7 cents a litre to 2.7 cents a litre.

The province saved about $430 million on interest on debt, thanks in part to lower-than-expected interest rates.

The net-debt-to-GDP ratio now stands at 40 percent, down from the previous forecast of 40.7 percent, but it still isn't projected to start decreasing until 2021-22.

Other measures announced in the fall economic statement include:‚

  • Allow cannabis retailers to sell products online or over the phone for in-store pick-up;
  • Making admission to museums, galleries and other attractions free for kids;
  • Publishing doctors' OHIP billings;
  • Establishing a Premier's Advisory Council on Competitiveness;
  • Consulting on how to encourage investment in rural and undercapitalized areas;
  • Looking at selling the naming rights to the Metro Toronto Convention Centre; and
  • Enacting legislation that could form the legal framework for the government's goal of putting beer and wine in corner stores.
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