Living wage now $4+ more than minimum wage in City of Kawartha Lakes

Living wage now $4+ more than minimum wage in City of Kawartha Lakes
Ontario to announce tax exemption for low-income workers in fall fiscal update
Ontario workers earning less that $30,000 will no longer have to pay provincial income tax starting next year, and those earning up to $38,000 will pay less tax, The Canadian Press has learned.

Government sources say the plan will be laid out in the province's fall economic statement, slated to be tabled in the legislature this afternoon.

ABOVE: Ontario's finance minister Vic Fedeli announced Friday that an independent commission has concluded that the recently defeated Liberal government ran a deficit of $15 billion in the last fiscal year rather than balancing the books as claimed. A big component of this was looking into the liberal government's accounting practices surrounding teacher pension plans and the province's fair hydro plan. Shallima Maharaj explains.

The sources say the tax changes will apply to 1.1 million Ontario workers making minimum wage or slightly above it, noting some other low-income workers who currently use a combination of rebates and other measures are already spared provincial income tax.

They say those who will be newly exempt are expected to save roughly $850 per year, or $1,250 per year for households with two exempt workers.

Ontario’s minimum wage rose from $11.60 to $14 an hour on Jan. 1 and was scheduled to increase to $15 next year, but the Progressive Conservative government has since introduced legislation that would cap the minimum wage at $14 until October 2020. Any future increases would be linked to the rate of inflation.

The sources say the plan will cost the province about $120 million between Jan. 1 and the end of the fiscal year. No further projections are included in the fiscal update, they say.

His proposal was criticized by opposition parties, and an independent economic analysis conducted at the time showed low-income workers would benefit more from a higher minimum wage than lower taxes, because the wage hike would bring more money than a tax cut would save them.

Ford should focus on Ontario, not on replacing Scheer, LeBlanc says

Premier Doug Ford had promised to eliminate provincial income tax for low-income workers in exchange for scrapping a minimum wage hike planned by the previous Liberal government that was set to take effect next year.

His proposal was criticized by opposition parties, and an independent economic analysis conducted at the time showed low-income workers would benefit more from a higher minimum wage than lower taxes, because the wage hike would bring more money than a tax cut would save them.

“Ontario doesn’t have a spending problem, it has a revenue problem and that’s the real story behind both insufficient service levels and the province’s deficit,” said Candace Rennick of the Canadian Union of Public Employees.

Ontario's minimum wage rose from $11.60 to $14 an hour on Jan. 1 and was scheduled to increase to $15 next year, but the Progressive Conservative government has since introduced legislation that would cap the minimum wage at $14 until October 2020. Any future increases would be linked to the rate of inflation.

However, the Tories’ deficit number has been called into question by opposition parties, who say the government has overstated the deficit by including spending promises made by the Liberals that are being cancelled by the current regime.

The government announced earlier this week that the fall economic statement would also raise the number of seats in the legislature required to achieve official party status, but has otherwise given few details on the fiscal update.

The government announced earlier this week that the fall economic statement would also raise the number of seats in the legislature required to achieve official party status, but has otherwise given few details on the fiscal update.

Finance Minister Vic Fedeli has promised to offer a clear snapshot of the government's finances, and said the government does not plan to use one-time revenue to tackle the province's $15-billion deficit.

Finance Minister Vic Fedeli has promised to offer a clear snapshot of the government’s finances, and said the government does not plan to use one-time revenue to tackle the province’s $15-billion deficit.

That figure was reached by a commission of inquiry convened by the governing Progressive Conservatives and factors in their decision to adopt accounting practices used by the auditor general.

Premier Doug Ford had promised to eliminate provincial income tax for low-income workers in exchange for scrapping a minimum wage hike planned by the previous Liberal government that was set to take effect next year.

The Liberals had clashed with the auditor general over their choice to view pensions plans as assets and move borrowing for a hydro plan off the province's books.

TORONTO – Ontario workers earning less that $30,000 will no longer have to pay provincial income tax starting next year, and those earning up to $38,000 will pay less tax, Global News has learned.

However, the Tories' deficit number has been called into question by opposition parties, who say the government has overstated the deficit by including spending promises made by the Liberals that are being cancelled by the current regime.

"Ontarians deserve answers about what the fiscal plan is for Ontario under the Ford government," Liberal legislator Mitzie Hunter said in a statement. "He said no one would be laid off and we will be holding him to this promise. If Ford is going to continue cutting services that people rely on, he needs to come clean with Ontarians."

Opposition legislators expressed concerns about a return to austerity, and said they expect the fall economic statement to lay the groundwork for cuts.

"We're pretty worried," NDP Leader Andrea Horwath said. "We expect an economic statement that's going to hurt everyday families."

The Liberals said Thursday's update will be the first thorough look at the impact of Ford's campaign promises, noting his camp did not release a costed election platform.

The sources say the tax changes will apply to 1.1 million Ontario workers making minimum wage or slightly above it, noting some other low-income workers who currently use a combination of rebates and other measures are already spared provincial income tax.

"Ontarians deserve answers about what the fiscal plan is for Ontario under the Ford government," Liberal legislator Mitzie Hunter said in a statement. "He said no one would be laid off and we will be holding him to this promise. If Ford is going to continue cutting services that people rely on, he needs to come clean with Ontarians."

However, the Tories deficit number has been called into question by opposition parties, who say the government has overstated the deficit by including spending promises made by the Liberals that are being cancelled by the current regime.

Green party Leader Mike Schreiner said the Tories campaigned on fiscal responsibility but haven't lived up to that image.

"I don't think the people of Ontario voted for cutbacks to essential services," he said.

The government announced earlier this week that the fall economic statement would also raise the number of seats in the legislature required to achieve official party status, but has otherwise given few details on the fiscal update.

One public service union said the government should focus on generating revenue rather than finding so-called efficiencies.

Premier Doug Ford had promised to eliminate provincial income tax for low-income workers in exchange for scrapping a minimum wage hike planned by the previous Liberal government that was set to take effect next year.

"Ontario doesn't have a spending problem, it has a revenue problem and that's the real story behind both insufficient service levels and the province's deficit," said Candace Rennick of the Canadian Union of Public Employees.

It is a priority for CBC to create a website that is accessible to all Canadians including people with visual, hearing, motor and cognitive challenges.

Election promises exacerbate the fiscal challenge, as does the prospect of slower economic growth and rising interest rates

That figure was reached by a commission of inquiry convened by the governing Progressive Conservatives and factors in their decision to adopt accounting practices used by the auditor general.

Doug Ford has promises to keep. And challenges if he hopes to keep them. And a bit more time, at least, before he has to stop blaming the Liberals.

Its not clear whether the provinces efforts to expose the cost will take into account — or even acknowledge — the fact that the federal government plans to issue annual rebates directly to Ontarians, which Ottawa says will more than cover the additional costs.

All of which means that what is typically a staid affair will be anything but this time around, as Toronto-Dominion Bank economists said of todays Ontario fiscal update.

Dominic LeBlanc offered that advice Wednesday, one day before the provincial government issues a fall economic statement thats expected to announce measures aimed at exposing the cost to consumers of the federal Liberals carbon tax.

An optimist will say that the Ontario economy is still in solid shape, said Bank of Montreal senior economist Robert Kavcic, noting Statistics Canada reported just last week that economic growth in the province was the best in seven years.

A pessimist, however, will note that there are challenges when looking further out on the horizon, he added in a report on what to expect this afternoon.

Starting in January, the Trudeau government will impose the tax in the four provinces — Ontario, Saskatchewan, Manitoba and New Brunswick — that dont have their own plan to put a price on carbon pollution.

Most notably, campaign promises included meaningful personal and corporate income tax relief totaling roughly $4-billion by [fiscal year 2021-22]. If implemented, that would make balancing the budget by such a date difficult even under a rosy economic backdrop.

During a recent visit to Queens Park, LeBlanc insisted he found some journalists who cover the provincial legislature consider it a fact that Ford aspires to be prime minister one day.

Heres where things stand as the Conservatives prepare to release an economic statement that Mr. Kavcic described as an important one in that it will show businesses and investors where the province is planning to go as it charts the way forward:

Premier Ford took control of the Ontario Conservatives and swept to a majority government without a hard and fast fiscal outline, ousting Kathleen Wynnes Liberals.

“I found that surprising. I cant imagine if youre sort of four months into a 48-month assignment and youre already looking for the exit ramp, that doesnt seem particularly constructive,” he said.

As is the case with most new governments, the Conservatives blamed the Liberals for what they left behind.

“The one thing thats becoming clear is that Mr. Ford seems to want to be a part-time Opposition leader in Ottawa. That should be concerning for Mr. Scheer.”

Mr. Ford took it further, establishing an independent commission to probe Ontarios finances, a smart move in terms of transparency and whats realistic.

Ford has seemed to go out of his way to pick fights with Justin Trudeaus federal Liberals, on everything from NAFTA negotiations to asylum seekers.

While taking into account certain accounting and pension issues, that commission put the 2018-19 deficit at $15-billion, far fatter than what was projected by the Liberals and representing 1.7 per cent of gross domestic product.

“We obviously hope that they use the economic statement to tell Ontarians about their plan to tackle climate change,” LeBlanc said in an interview.

Based on our math, the government is facing an enormous fiscal challenge, said Derek Burleton, TDs deputy chief economist, and his colleague Rishi Sondhi.

“They seem to spend a lot of time fabricating elements of our plan to criticize. We have a plan. They havent yet developed one.”

In order to bring the deficit down over time, gains in revenue need to run faster than spending, they added in an analysis of Ontarios challenging budget math.

“The growth of employment here is low paying, minimum wage and doesn’t have benefits,” said Mary Lou Mills, a social determinants nurse with the Haliburton, Kawartha, Pine Ridge District Health Unit. “That’s very concerning when we look what at what minimum wage is and what people do need to meet their basic standards.”

Yet, revenues will likely be constrained by moderate economic growth and slower increases in federal transfers, they added.

“We all want a higher minimum wage, but we need to get there in a predictable way,” said Laurie Scott, Ontario’s Minister of Labour. “Businesses can have that time to incorporate those increases. We want the minimum wage to be based on economics, not politics.”

At the same time, debt service costs on Ontarios relatively high debt load are slated to rise. And, the final challenge comes from campaign promises – both on the tax and spending sides – that could run as high as $9-billion annually when fully implemented.

Mr. Burleton and Mr. Sondhi calculate that the government will actually disclose a current year deficit thats narrower than what the commission suggested, but a still-hefty $12.5-billion or 1.4 per cent of GDP.

The provincial minimum wage was supposed to increase from $14 an hour to $15 an hour on Jan. 1, 2019.  The provincial government nixed that plan, along with the basic income pilot program in Lindsay.

Economic growth will probably top the relatively cautious bar pegged by the commission. At the same time, Mr. Ford will forego some Liberal spending plans that were included in the commissions estimates, and, indeed, has already done so.

According to the Ontario Living Wage Network, a family of four (two parents with two kids) needs a household income of about $74,000 a year to make basic ends meet in the City of Kawartha Lakes.

Those cuts will mean $2-billion less in spending this year, the TD economists said, with a further $1-billion in savings as other programs run their course.

But remember Mr. Fords campaign promises, such as reducing gas taxes by 10 cents a litre and spending in other areas.

Officials with Kawartha Lakes Food Source, a warehouse that supplies eight food banks in the municipality, say they’ve noticed an increase in usage.

Then theres the cost of killing the cap-and-trade program, plus other things that suggest a cap-in-hand approach.

Haliburton: $19.42Kawartha Lakes: $18.42Northumberland Cnty: $17.95Peterborough: $17.65Durham Region: $17.00

There are other measures the Conservatives can take, of course, to tame the deficit. And we may not like them.

All told, it stands to reason that Ontarios first priority will be to firm up its fiscal credibility, with the first two years of the mandate likely focused on bringing down the deficit as much as possible, said BMOs Mr. Kavcic.

Depending how the economy evolves, that could mean more meaningful fiscal restraint, and perhaps later/lower tax relief measures.

Laurentian Bank Securities economist Dominique Lapointe expects Mr. Fords government to also put the focus on its recent Ontario Open for Business plan. The government could also cut the huge infrastructure program of the Liberals.

Without questioning the significance that sound public infrastructures have for productivity and safety, prioritizing the most efficient and urgent public transit projects and delaying some others for later would lower borrowing requirements, Mr. Lapointe said.

Theres also the possibility of pledging to reduce the deficit, and unveiling the details later, perhaps in next springs budget, he added.

From a credibility perspective, the sooner the government gets its fiscal house in order, the better, Mr. Burleton and Mr. Sondhi said, citing the weight of rising interest rates and slower growth.

If the government plans to honour its campaign promises, program spending will have to be pared significantly, they added.

In turn, the impact of this needs to be dynamically included in economic growth forecasts. Importantly, revenue assumptions used in [the TD] analysis assume reasonably healthy economic growth. Should the economy take a turn for the worse, the governments job becomes exponentially harder.

If you would like to write a letter to the editor, please forward it to [email protected] Readers can also interact with The Globe on Facebook and Twitter .

If you would like to write a letter to the editor, please forward it to [email protected] Readers can also interact with The Globe on Facebook and Twitter .

Comments that violate our community guidelines will be removed. Commenters who repeatedly violate community guidelines may be suspended, causing them to temporarily lose their ability to engage with comments.