TORONTO -- Ontario's Liberal government has finally eliminated its deficit, but its debt is rising to new heights.
The province's first balanced budget in a decade gets rid of a deficit that had at one point reached about $20 billion, and the government is projecting that balance will continue through to 2020.
The debt, however, is another matter. It is projected to be $312 billion this year, or roughly $22,000 for every Ontarian, and grow to $336 billion in 2019-2020.
The province's net debt has tripled since the provincial Liberals came to power. In the last budget presented by Ontario's Progressive Conservatives before the 2003 election, the debt was about $110 billion.
The overall size of the budget, meanwhile, has roughly doubled -- from $71 billion in 2003 to $141 billion this year.
Interest on debt is the fourth largest spending area, at $11.6 billion. It is also projected to be the fastest-growing spending area, at an average 3.6 per cent a year from 2015 to 2020, compared to an annual 3.3-per-cent increase in health and 2.8 per cent in education.
There is no plan in the Liberal budget to get the debt under control, said Progressive Conservative Leader Patrick Brown.
"We are spending more servicing the debt each year than we're spending on all transit and provincial highways, more than we're spending on the Ministry of Children and Youth Services...more than on care for seniors, more than investments in our post-secondary education, more than supporting northern communities," he said.
But Ontario Finance Minister Charles Sousa said debt is in fact being managed.
"A first step to managing debt is coming to balance," he said.
The debt-to-GDP ratio is improving, Sousa said, and the percentage of the budget that goes toward servicing the debt is considerably smaller than it has been in years.
"We've locked in those rates over long periods of time to minimize volatility and risk," he said.
The Ontario Chamber of Commerce was pleased to see a balanced budget, but said it is concerned there is "no clear path for long-term fiscal prudence."
"While there is no deficit over the planning period, there is also no plan for surplus," the group representing the province's businesses said in a statement. "Given that, downward payment on the debt will be pushed beyond the medium term."
The Canadian Taxpayers Federation questioned what will happen to the budget if interest rates rise.
"It's balanced on a knife's edge," said Ontario director Christine Van Geyn. "If there's a change in what are right now historically low interest rates, the province could be thrown into really a huge fiscal hole."
The net-debt-to-GDP ratio is down to about 37.5 per cent from a high of roughly 40 per cent in recent years, but the government hopes to wrestle it down to pre-recession levels of 27 per cent by 2029-30. In the interim, the government has set a target of reducing that number to 35 per cent by 2023-24.
Here are 11 highlights from the new budget:
PHARMACARE FOR YOUTH
More than 4,400 prescription drugs will be free for anyone under 25 starting next year under the province's new pharmacare program.
The program, dubbed OHIP+, is meant to provide universal drug coverage to children and youth regardless of family income.
It will cover all drugs currently available under the Ontario Drug Benefit program, with no co-payment or deductible.
The province says the new system will cost $465 million per fiscal year once it's up and running.
HEALTH CARE 'BOOSTER SHOT'
Ontario has budgeted $11.5 billion in new health-care spending over the next three years, an amount that's $7 billion higher than the province had previously planned.
The so-called "booster shot" includes $1.3 billion to help cut wait times to see specialists, get key surgeries and access mental health services.
It also includes funds earmarked for hospital construction, such as new facilities in the Niagara and Windsor areas.
That spending will total $9 billion over a decade.
GROWING DEBT
Despite reaching balance in its latest budget, Ontario's debt continues to grow -- with projections putting it at $312 billion for 2017-2018.
The province's net debt is expected to rise to $336 billion in 2019-20.
Interest on debt is the fourth largest spending area, at $11.6 billion.
CHILD CARE SPACES
Ontario is vowing to create 24,000 new licensed child care spots, 60 per cent of which would be government-subsidized.
That would come at a cost of $200 million.
The province says it has already created 56,000 licensed child care spaces in recent years.
SCHOOL AND BEYOND
Ontario is vowing to build new schools in high-growth areas and help older facilities get a facelift.
The province is setting aside about $16 billion in the next decade for new construction as well as renovations and retrofits to make existing schools more energy-efficient.
Students are also getting a hand with work experience, with $190 million earmarked over three years to create 40,000 placements for them and for recent graduates.
HELP FOR SENIORS
Getting around using public transit will be slightly cheaper for Ontario seniors, who will be able to get part of their transit expenses refunded under a new tax credit.
The program, which is slated to kick in on July 1, will cover 15 per cent of eligible transit costs, up to $130 per person annually.
It is expected to cost the province $10 million a year.
Money is also being set aside -- $8 million over three years -- for so-called elderly persons centres, which provide services such as meals on wheels and exercise classes.
The province's dementia strategy is also getting $100 million over three years to support residents with dementia and those who care for them.
SUPPORT FOR INDIGENOUS RESIDENTS
Ontario's budget includes a number of measures meant to help the province's indigenous communities access education and justice, among other things.
The government is spending $200 million over three years to boost postsecondary education and training opportunities for indigenous people.
Meanwhile, $44.2 million will be spent in the next two years to expand or establish programs to make the justice system more culturally relevant, including the Gladue Program, which encourages courts to consider non-custodial sentences for indigenous offenders.
Another $2 million will be spent in that same time frame to develop anti-racism programs that will be designed and delivered by indigenous people.
TAXES ON TOBACCO, HOTEL STAYS
The Liberals are increasing tobacco taxes and giving municipalities the power to levy a hotel tax.
Tobacco tax rates will rise by $10 per carton of cigarettes over the next three years, starting with a $2 bump that takes effect at midnight.
As for the hotel tax, the budget provides few details, but it will require amendments to the Municipal Act and the City of Toronto Act, which gives the city the authority to levy its own taxes, but that has so far excluded hotels.
LAND TRANSFER TAX REVENUE INCREASE
Southern Ontario's booming housing market poured hundreds of millions more than expected into Ontario's coffers last fiscal year.
It helped generate $637 million more than projected in land transfer tax revenue.
The land transfer tax is expected to bring in $3.1 billion this fiscal year.
ONLINE PROTECTION PILOT PROJECT
Ontario wants to help its financial institutions improve their cybersecurity with a new $4-million pilot project.
The project will pair financial institutions with companies working in the cybersecurity sector.
The province says that will also help create high-tech jobs.
OPPOSITION PARTIES REACT
Ontario's opposition parties derided the Liberal government's budget.
Progressive Conservative Leader Patrick Brown says the fiscal plan is nothing but a ploy to win over voters ahead of next year's provincial election.
Ontario's NDP Leader Andrea Horwath, meanwhile, says the budget does nothing to address the needs of cash-strapped families already struggling with hydro bills and housing costs.
