March 24, 2006 Highlights

1. Finance Minister Presents Ontario Budget

Finance Minister Dwight Duncan unveiled his first budget yesterday.  A year ago, the budget’s centerpiece was a significant increase in funding for post-secondary education.  New transportation initiatives, both public transit and municipal roads and bridges, are the focus of the 2006 budget. 

The Ontario budget usually follows release of the federal budget.  The Harper government is expected to release its first budget in May.  Federal fiscal policy may have a significant impact on Ontario’s finances.

Taxation

The budget contains no new taxes or tax increases.  It does announce a reduction in the corporate tax rate to take effect January 1, 2007, two years ahead of schedule.  The government, as anticipated, is on track to balance its budget by 2008-09 or earlier if the province doesn’t need to dip into its reserves.  The Opposition parties are accusing the Liberals of manipulating their fiscal policies in order to position themselves advantageously for the October 2007 provincial election.

Elementary and Secondary Education

The first Liberal government in 2004 laid out a four-year plan for elementary and secondary education.  Yesterday’s budget contained nothing new for education beyond the expected increases. The 2006 budget is on track with the projected increase of $400 million in grants to school boards for 2006-07 for a total of $17.3 billion. This represents a 2.3 per cent increase over last year.  (The health budget has increased by about 5.5 per cent.)

Class Size and Specialist Teachers

The government is halfway through the initiative to cap primary class sizes.  Over the last two years, the Ministry of Education has funded an additional 4,300 teachers including 2,400 teachers for the class size reduction and 600 specialist teachers in music, physical education, and the arts.  (The additional specialist teachers account for $39 million of the $400 million in additional funding.) The remaining 1,300 teachers are secondary teachers designated to provide enhanced support for students at risk.

Aboriginal Education

The budget includes two new investments in Aboriginal education.  To strengthen literacy, the government is allocating $6 million to First Nations and rural libraries.  In addition, it is committing $800,000 to support the Lieutenant Governor’s summer literacy camps, an initiative that is also supported financially by ETFO and some of its locals.

Child Care – Best Start

The province’s planned expansion in the child care sector was totally dependent on funding committed by the federal government through the federal-provincial funding agreement signed with the previous Liberal government in 2005.  Prime Minister Harper has announced his government is cancelling that agreement and the funding effective in 2007.  This means Ontario will lose $1.4 billion of the promised $1.9 billion for the government’s Best Start initiatives.  The 2006 Ontario budget indicates the government will use its last year of federal funding to support the additional 14,000 child care spaces under development to date through Best Start.  The cancellation of the federal-provincial deal means that 11,000 spaces will not go ahead as planned.

Social Assistance and Housing

The 2006 budget increases social assistant payments to Ontario Works and Ontario Disability Support Program recipients by 2 per cent, just covering the cost of inflation.  Last year the province increased social assistance by 3 per cent, the first increase since welfare was cut by 21.6 per cent in the Harris government’s first budget in 1996.

The government, for the third consecutive year, is passing on the increases to the National Child Benefit Supplement to recipient families.  The government is not, however, repealing the increases clawed back by the previous government as requested by anti-poverty advocates.

Accounting Practices

Hugh Mackenzie, with the Canadian Centre for Policy Alternatives, reports the province has made a significant change to its accounting practices.  Henceforth Ontario will be able to amortize its capital expenditures on hospitals, schools, and community colleges thereby enabling the government to spread the financing costs of capital projects over a number of years rather than all at once.  This change removes a significant rationale for the government’s P3 approach to building hospitals and is a policy change supported by ETFO.

For more information about the 2006Ontario budget, check this link: http://www.fin.gov.on.ca/english/index.html

For ETFO’s response, check this link: Elementary teachers laud government commitment to public education - March 23, 2006

2. Government Announces Provincial Stability Commission

On March 22, 2006, Education Minister Gerard Kennedy announced the establishment of the Provincial Stability Commission.  The Commission is mandated to resolve disputes arising from the four-year collective agreements signed between ETFO and district school boards.  Most of the disputes relate to implementing the provisions for reduced teacher supervision time.

A former deputy minister of labour, Jim Thomas will serve as chair.  The commission will include equal representatives from both ETFO and the Ontario Public School Boards’ Association.

3. Recent Polls

On March 23, 2006 Leger Marketing released the results of a public opinion poll conducted between March 8 and 15.  The poll indicates the provincial Liberals and Tories are tied at 34% support from decided voters.  This result reflects a drop of 3 points for the Liberals and a gain of one point for Tories since the firm’s most recent poll conducted in October 2005.  The NDP received 20% of the support, a drop of one point.  Other parties received a combined total of 12%, an increase of three points.  The poll has a margin of error of 3.4 per cent, 19 times out of 20. Half of those polled indicated it was time for a change of government in Ontario.

On March 24, SES Research released a poll with different results.  The poll conducted between March 5 and March 8 shows no change in support over the last 30 days for the Ontario Liberals and overall decided voter support as follows:

Liberals 41% (NC)
PC 34% (-3)
NDP 20% (+2)
Green 5% (+1)
Undecided 11% (-4)

The margin of error in this second poll is 4.5%, 19 times out of 20

For more information: www.ontla.on.ca