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The Ontario government promised $17 billion in relief funds to fight COVID-19 Wednesday, joining governments worldwide in the scramble to tackle the rapidly evolving social and economic impacts of the pandemic.
The emergency package promises direct support for many — parents will get a per-child infusion of cash while seniors will see expanded support and businesses get provincial tax deferrals. It also allocates an extra $3.3 billion to bolster hospitals and health-care systems that risk collapse as the number of COVID-19 patients in Ontario inevitably rises.
The relief funding derails the Progressive Conservative government’s cost-cutting agenda, with a planned deficit of $9.2 billion in 2019-20 now expected to be a $20.5 billion hole in 2020-21.
“There are moments that define a generation,” Ontario Finance Minister Rod Phillips told a near-deserted Queen’s Park legislature as the majority of MPPs stayed home in accordance with public health guidelines.
“COVID-19 is our moment.”
The plan announced Wednesday includes $3.7 billion in direct support for people and job protection measures, along with the $3.3 billion in additional health-care spending. It also outlines $10 billion in deferred taxes and other measures largely designed to keep businesses afloat while the economy likely contracts sharply.
At least nine people have now died in Ontario due to COVID-19, with 671 active cases and more than 10,000 people awaiting test results. The province is fighting to get more protective equipment for medical workers and ventilators for hospitalized patients amid a global rush on the products, while it also struggles to increase its capacity to assess and test a rising flood of people exhibiting flu-like symptoms.
Phillips called the plan a “critical first step.” Opposition NDP Leader Andrea Horwath said it can’t be the only one, however, and that she was “extremely concerned” the government measures didn’t go far enough.
Another possible hurdle: the province may be taking an overly optimistic view of the economic impact of COVID-19, which is currently keeping students home from school indefinitely and most public-facing businesses shuttered.
The plan projected flat economic growth in the province this year — but it relied on forecasts current at the end of last week, and the global economy has spiralled even more since then.
Ontario unveils a $17 billion COVID-19 relief package as it seeks to boost healthcare capacity and limit the economic fallout caused by the growing global pandemic.
Private-sector economists have since hurried to put out new predictions that show the province’s economy shrinking sharply. They also suggest a recovery could take years, while the government’s official view is that Ontario will bounce back to 2 per cent growth in 2021 (it recorded 1.6 per cent growth in 2019).
Indicating the level of uncertainty about just how drastic the pandemic’s long-term impact might be, the package announced Wednesday sets aside a record $2.5 billion reserve for the 2020-21 fiscal year. That is in addition to $1 billion of the healthcare funding set aside specifically for unforeseen COVID-19 responses that may be needed later.
The government says it expects to take a $5.8-billion hit to its projected revenue in 2019-20. It also said it will spend $8 billion more than originally planned, mostly to deal with COVID-19 fallout.
“We will spend whatever it takes to protect the economy and the health of this province, and the people of this province,” Premier Doug Ford told reporters Wednesday afternoon.
The government’s update did not offer any longer-term forecast, as the economic shocks caused by the pandemic are still reverberating. It had planned to release a full budget Wednesday, but ditched that plan early last week as the escalating pandemic shattered daily life and battered stock markets around the world.
Plan still leaves renters and other vulnerable, NDP and Greens say
The Ontario legislature passed the emergency measures Wednesday.
The NDP’s Horwath said her party’s MPPs would vote in favour, but that she fears the plan won’t put enough money fast enough in the pockets of people who have suddenly lost income, or small- to medium-sized businesses that have had to shutter.
“People need help now,” Horwath said. “They need the Province of Ontario to step up and help them.”
Green Party Leader Mike Schreiner also expressed disappointment after voting for the measures, saying it did not go far enough to prepare for a worst-case health care scenario or protect vulnerable groups including renters and small businesses.
“This relief plan leaves renters vulnerable to eviction even as we beg people to stay in their homes to flatten the curve,” he said.
David Macdonald from the Canadian Centre for Policy Alternatives estimates that some 564,000 Ontarians are at risk of losing their jobs due to the pandemic, which would push the provincial unemployment rate to 12.6 per cent.
In a new analysis released on Wednesday, he argues that the impact across Canada is largely going to be felt by the lowest-income workers. Two in five people earning $14 an hour or less are facing immediate unemployment, along with a third of people in the $14-16 per hour range. Just one per cent of those earning $40 per hour risk job loss.
Where the money is going
While the novel coronavirus first emerged in Wuhan, China, at the end of 2019, Ontario and the rest of Canada didn’t begin broadly adopting drastic measures to contain its spread until earlier this month.
Two-thirds of the additional health-care spending is aimed at outbreak response measures, while the rest is earmarked to help expand the capacity of hospitals.
The government added $160 million in public-health funding to boost COVID-19 monitoring and surveillance, laboratory testing and the Telehealth Ontario phone line, and $61 million for publicly funded vaccines. It also set aside $75 million to supply front-line medical staff with personal protection equipment and other supplies.
Liberal Leader Steven Del Duca immediately called for that $75 million amount to be doubled, as nursing and medical groups raise the alarm about limited supplies endangering health-care workers.
As part of the broader support for people and jobs, about $340 million will provide a one-time payment to parents to help offset costs incurred as a result of school and daycare closures. The government said families can expect $200 per child under 12, and $250 for children with special needs.
Payments from the Guaranteed Annual Income System for seniors will double for six months. And to help people struggling to pay for rent, food and bills during the pandemic, the government pledged to expand the Ontario Works program without providing a firm figure, and sent $148 million to food banks, homeless shelters, churches and other groups that provide emergency social services.
The same category of support for people includes an extension of $1.5 billion in electricity cost relief into 2020-21, after the Ford government set aside a similar amount in late-January for the almost-expired 2019-20 year to fulfill a 2018 campaign promise to lower power bills.
The plan allocates $26 million to Indigenous Peoples and communities as well. The government said that help would include emergency financial help for urban Indigenous people, and would help cover the costs of sending medical workers and critical supplies to remote First Nations communities.
The federal government, meanwhile, bumped their total relief package for Canadians up to $107 billion Wednesday, including $52 billion in direct aid.
More than 20,000 people around the world are confirmed to have died due to COVID-19, with 452,000 people infected globally. Among the hardest hit countries are China, Italy, Spain and Iran.
Editor’s note: This article was updated at 6:30 p.m. Eastern time to include additional context and details, and comments from the finance minister and opposition politicians.