2020 Provincial budget information and updates
ONN Analysis: Ontario’s COVID-19 Action Plan & Economic Update
March 27, 2020
The Ontario Minister of Finance has released an Economic & Fiscal Update and a COVID-19 Action Plan in lieu of the scheduled 2020 Budget. The COVID-19 Action Plan consists of $17 billion in funding to respond to the pandemic, including:
- $3.3 billion for health care
- $3.7 billion in economic measures, of which $1.5 billion is for lower electricity costs
- $10 billion for businesses, of which $6 billion is corporate tax deferrals
- $200 one-time payment to parents of children under age 12, per child ($250 if special needs)
In the fiscal year starting April 1, the Ontario government now plans to spend $174.3 billion on programs and take in $156.3 billion- $400 million less than in 2019-2020. The “mini-budget” includes a large $2.5-billion reserve fund.
The Economic Update is modest in view of the COVID health and economic crisis facing Ontario. It leaves most of the work of short-term economic stimulus to the federal government, while taking limited steps to put into place critical supports that will be needed in the post-COVID period of recovery. Details on new program spending are somewhat limited. The main focus for the government is to sustain economic activity, while ensuring that health and social services are supported on the frontlines of the crisis.
The implementation bill (Bill 188) was rushed through the Legislature (with 24 MPPs sitting to ensure physical distancing) with all-party support, though Opposition parties expressed concerns with the bill. It was granted Royal Assent on the same day.
The Ontario government will release a long-range assessment of the fiscal environment by June 7, 2020. The Ontario Budget will be tabled by November 15.
What is not in the plan?
- An emergency stabilization fund for the nonprofit sector, which employs a million people and contributes $50 billion to Ontario’s economy
- Wage subsidies/payroll tax credits or forgivable and/or low-interest emergency loans for nonprofits and other small enterprises to keep employees on the payroll
- Emergency payments to workers or tenants affected by the pandemic, other than parents. (The governments of Alberta, Quebec, and British Columbia have included direct payments in their response and BC has put a moratorium on rent increases)
- Reassurance that front-line social services can access personal protective equipment (PPE) on par with health care and justice system workplaces
Provisions for statutory paid sick days.
- Gender budgeting provisions that could have highlighted the differential impact of the health and economic crises on women, Indigenous people, persons with disabilities, and racialized workers.
ONN continues to advocate for:
- A stabilization fund to provide financial support for nonprofits that have been hard hit as a sector and do not benefit from corporate tax breaks
- Revisions to employment standards policies regarding paid sick days for all employees
- Flexibility in provincial funding agreements with nonprofits, e.g., moving funds between budget lines, postponing reporting deadlines, and carry-forward provisions at year-end
- A seat at the table for nonprofits to be actively part of emergency preparedness planning and economic recovery
ONN is working with the Ontario government to ensure that nonprofits have the financial support, flexibility, and appropriate regulatory environment to survive the COVID crisis and thrive in the subsequent economic recovery.
What does the COVID-19 Action Plan mean for Ontario’s nonprofit sector?
Health care measures
- $3.3 billion for health care, most of which is for hospitals’ COVID-19 response
- $120 million to increase home and community care capacity
- $243 million for long-term care (includes municipal, for-profit, and nonprofit care homes)
- $75 million for more personal protective equipment (PPE) for front-line health care workers
- Details of how these resources will be distributed have not been shared, though ONN has heard of challenges in obtaining adequate PPE in the community health sector which comprises community health centres, hospices, and home care.
- $62 million to hire more doctors, nurses and personal support workers
- $170 million for community capacity, homecare and Ontario Telehealth Network
- $11 million for meal and medicine delivery to seniors (announced April 21; up from $5 million originally announced)
Pandemic measures for social services that operate as essential services during the State of Emergency
ONN members have noted urgent challenges in operating residential services (such as assisted living, women’s shelters, and group homes) with vulnerable people under the requirement for physical distancing and without adequate PPE. Some organizations have resorted to using hotels and other temporary spaces, the cost of which is high.
It is therefore welcome to see that the Economic Update allocates $70 million for infection control and PPE in residential facilities for children and youth in care, children with complex needs and people with developmental disabilities, retirement homes, youth justice facilities, and emergency shelters for women and families fleeing domestic violence.
Developmental services (DS), shelters for women fleeing violence, and children’s aid societies will receive $20 million in 2020, in addition to the $20 million announced on March 17 (which may be carried forward).
Measures to support nonprofit workers
As previously announced, the Economic Update provides support for emergency childcare options available to support parents working on the front lines in health care, policing, and corrections.
- Many nonprofit services have been deemed “essential workplaces” in the State of Emergency declaration, but their workers do not have access to these child care services. ONN is advocating for this discrepancy to be remedied.
The Update announces a $200 one-time payment to parents of children under age 12 ($250 if special needs), per child.
Economic measures affecting nonprofit employers
The largest economic measure, $6 billion in corporate income tax deferrals, does not help the nonprofit sector.
- Some nonprofit employers may benefit from the deferral of Workplace Safety and Insurance Board (WSIB) payments for up to six months
- Nonprofits that own property may benefit from the deferral of municipal property tax collection
- Reduced electricity costs will be charged in 2020-21 to eligible residential, farm and small enterprise consumers (including eligible nonprofits)
- The exemption threshold for paying the Employer Health Tax has been temporarily raised to $1 million for the 2020 tax year. This will save employers with payrolls between $490,000 and $1 million about $9,945
- $100 million is allocated to Employment Ontario for skills retraining programs for workers who have lost their jobs. The nonprofit sector may see some of this funding, although Employment Ontario programming now includes public, for-profit and nonprofit organizations
- A Regional Opportunities Tax Credit was announced but is not applicable to nonprofits, given that nonprofits are not subject to income tax
Measures to support municipal and First Nations crisis systems serving vulnerable Ontarians
- $148 million is allocated to the 47 municipal social service boards to use for their shelter systems and to support nonprofits such as food banks, homeless shelters, churches and emergency services to bolster their ability to function during the pandemic. (This was part of the $200 million announcement on March 23 that also includes $52 million to expand access to the Ontario Works emergency assistance program). It is unclear how much of the $148 million will reach nonprofits directly.
- $26 million in comparable funding is allocated for Indigenous communities.
What does the Economic Update & implementation bill mean for Ontario’s nonprofit sector?
According to the Economic Update, an overall increase in program spending is planned for 2020-21, including for community and social services (6.9 per cent) and health services (5.2 per cent). It is too soon to know whether these increases will be sufficient to support the range of human service nonprofits on the frontlines. The Ontario government may need to increase program spending to meet the demand for services, especially given that it spends considerably less on programs than other provinces.
There are also two key schedules in the implementation bill (Bill 188) that amend privacy legislation in ways that could affect data-sharing and personal health information. ONN is consulting our partners in health care and data policy to determine the implications for our sector.
- Data sharing for better program evaluation: Bill 188, schedule 2 amends the Freedom of Information and Protection of Privacy Act to include measures allowing for extra-ministerial data integration units. This is an intriguing development that may facilitate the “data lab” model that ONN has been advocating for with our partners in the Administrative Data Policy Coalition. We will be looking for regulations to ensure that any data-sharing involving health and social service information is done on a nonprofit basis and takes an equity-focused approach.
- Personal health information: Bill 88, schedule 6 includes major amendments to the Personal Health Information Protection Act, 2004. ONN recommends that the Ontario government follow the advice of the Information and Privacy Commissioner of Ontario in terms of avoiding the risks associated with monetizing health information.
ONN understands the Economic Update and COVID Action Plan to be the first steps in the Ontario government’s response to the emerging health and economic crisis. We look forward to further measures to ensure that communities across Ontario remain healthy and that local economies throughout the province have the financial stimulus and policy support needed to recover from the inevitable downturn. Whether they are performing arts groups or social enterprises reliant on the sale of tickets and services, or frontline health and social service groups that meet the immediate needs of their local communities, Ontario’s nonprofits are a major employer and a vital component of our provincial economy. Our sector will need appropriate support to survive the crisis and thrive in the subsequent recovery so that we can continue to meet our missions and serve communities.
Stay tuned as ONN releases the results of our flash survey on the impact of the COVID crisis on nonprofits- to be released in early April.