Ontario will spend additional $17 billion to fight the coronavirus

Yahoo Finance Canada
(Getty Images)
(Getty Images)

Ontario is spending an additional $17 billion to step up efforts against the coronavirus.

The healthcare systems gets $7 billion while $10 billion goes to people and businesses through taxes and other deferrals.

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"During this global pandemic, I want the people of Ontario to be focused on their health — not worrying about losing their job or how to make ends meet as they deal with unexpected additional expenses," said Rod Phillips, Ontario’s Finance Minister.

"We are helping make life a little more manageable for every person in Ontario, while providing additional support to those who need it the most."

Healthcare investments include more equipment to front-line workers, more beds, a contingency fund, testing, and assessment centres.

“To the first responders, you have our backs and we have yours,” said Ontario Premier Doug Ford.

Parents dealing with school and daycare closures get $200 per child up to 12 years of age, and $250 for those with special needs, including children enrolled in private schools.

Other incentives include a drop in hydro bills through off-peak hours pricing for 45 days and 6 months of payment and interest relief for from the Ontario Student Assistance Program (OSAP).

The announcement came during a fiscal update, instead of the previously planned full budget that’s been postponed because of COVID-19.

New spending measures mean the province projects a deficit of $9.2 billion in 2019–20, an improvement of $1.1 billion relative to the 2019 budget, but will rise to $20.5 billion in 2020–21.

“The $20.5 billion deficit nears financial-crisis levels at 2.3% of GDP,” said Robert Kavcic, senior economist at BMO.

“There are ample contingencies (roughly $5 billion) built into that estimate.”

But Ford is confident the province will get through this.

“When we come out of these tough times, we will emerge stronger than ever before,” he said.

The Canadian Federation of Independent Business (CFIB) welcomes the measures but would like to see the province go a step further.

“We wish the government had included more protection for employees from layoffs through a made-in-Ontario wage subsidy, or at least join us in asking the federal government to increase their current wage subsidy of 10 per cent to 75 per cent of wages for all employers,” said CFIB in a statement.

Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains.

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