Standing Committee on Finance and Economic Affairs
First Interim Report: Economic and Fiscal Update Act, 2020
1st Session, 42nd Parliament
69 Elizabeth II
ISBN 978-1-4868-4609-2 (Print)
ISBN 978-1-4868-4606-1 [English] (PDF)
ISBN 978-1-4868-4608-5 [French] (PDF)
ISBN 978-1-4868-4605-4 [English] (HTML)
ISBN 978-1-4868-4607-8 [French] (HTML)
The Honourable Ted Arnott, MPP
Speaker of the Legislative Assembly
Your Standing Committee on Finance and Economic Affairs has the honour to present its Report and commends it to the House.
Amarjot Sandhu, MPP
Chair of the Committee
Standing Committee on Finance and Economic Affairs
1st Session, 42nd Parliament
IAN ARTHUR david piccini
STAN CHO mike schreiner
STEPHEN CRAWFORD Sandy shaw
Mitzie hunter donna skelly
sol mamakwa dave smith
stephen blais *laura mae lindo
catherine fife kaleed rasheed
randy hillier john vanthof
*JILL ANDREW was replaced by LAURA MAE LINDO on June 3, 2020.
Clerk of the Committee
dmitry granovsky and andrew mcnaught
Ontario’s Action Plan: Responding to COVID-19 (March 2020 Economic and Fiscal Update)
Economic and Fiscal Update
Figure 1: Revenue Adjustment, 2020-21
Figure 2: Projected Expenses, 2020-21 ($Billion)
Ontario’s Action Plan
Figure 3: Highlights of Ontario’s Action Plan: Responding to COVID‑19
Bill 188 (the Economic and Fiscal Update Act, 2020)
Letters Filed by Party Leaders and Independent Members
Letter from the Leader of the New Democratic Party
Letter from the Leader of the Ontario Liberal Party
Letter from the Leader of the Ontario Green Party
Letter from Independent MPP
What the Committee Heard
Minister of Finance
Questions from the Committee
Financial Accountability Officer
Terms of Reference*
That the Leaders of the parties represented in the Legislative Assembly as well as Independent Members may file copies of letters with the Speaker, who shall cause them to be laid upon the Table, containing their recommendations to the Minister of Finance with respect to the economic and fiscal measures they proposed to be included in the provisions of Bill 188, and such letters shall be deemed to be referred to the Standing Committee on Finance and Economic Affairs; and
That when the committees of the Legislature resume meeting, the Standing Committee on Finance and Economic Affairs shall be authorized to consider the Party Leader and Independent Member letters, together with An Act to enact and amend various statutes as passed by the Legislature today, with the first witness during such consideration to be the Minister of Finance;
*Votes and Proceedings, March 25, 2020, 42nd Parliament, 1st Session
a) The electronic means of communication is approved by the Speaker;
b) The meeting is held in a room in the Legislative Building, and at least the Chair/Acting Chair, and the Clerk of the Committee are physically present;
c) Other Members of the committee participating by electronic means of communication, whose identity and location within the Province of Ontario have been verified by the Chair, are deemed to be present and included in quorum;
d) The Chair shall ensure that the Standing Orders and regular committee practices are observed to the greatest extent possible, making adjustments to committee procedures only where necessary to facilitate the physical distancing and electronic participation of Members, witnesses, and staff; and
That, notwithstanding the Order of the House dated March 19, 2020, the Standing Committee on Finance and Economic Affairs is authorized to meet at the call of the Chair to consider its Order of Reference dated March 25, 2020, respecting the Economic and Fiscal Update Act, 2020 (Bill 188); and
To study the impacts of the COVID-19 crisis on the following sectors of the economy and measures which will contribute to their recovery:
b) Culture and Heritage
c) Municipalities, Construction, and Building
e) Small and Medium Enterprises
f) Other economic sectors selected by the Committee
• The committee shall study Bill 188 and each specified economic sector for up to 3 weeks with one additional week allotted for report-writing for each.
• The Sub-committee on Committee Business shall determine the method of proceeding on the study, and at its discretion, may extend each sectoral study by one week where a public holiday may fall during the scheduled time for the sectoral study.
• The Legislative Research Service shall make itself available to the Committee collectively, and to members of the Committee individually, on a priority basis.
• That in accordance with s. 11 (1) of the Financial Accountability Officer Act the Financial Accountability Officer shall make the resources of his office available to the Committee collectively, and to members of the Committee individually, on a priority basis.
• The time for questioning witnesses shall be apportioned in equal blocks to each of the recognized parties and to the Independent Members as a group.
• The Committee may present or, if the House is not sitting, may release by depositing with the Clerk of the House, interim reports, and a copy of each interim report shall be provided by the Committee to the Chair of the Ontario Jobs and Economic Recovery Cabinet Committee; and
• The Committee shall present or, if the House is not sitting, shall release by depositing with the Clerk of the House, its final report to the Assembly by October 8, 2020 and a copy of the final report shall be provided by the Committee to the Chair of the Ontario Jobs and Economic Recovery Cabinet Committee; and
That notwithstanding Standing Orders 38 (b), (c), and (d) the interim reports presented under this Order of Reference shall not be placed on the Orders and Notices Paper for further consideration by the House nor shall the government be required to table a comprehensive response; and
That notwithstanding Standing Orders 116 (a), (b) and (c), the membership of the Standing Committee on Finance and Economic Affairs for the duration of its consideration of the Order of Reference provided for in this motion shall be:
Mr. Sandhu, Chair [Sub-committee Chair]
Mr. Roberts, Vice-Chair
Mr. Cho (Willowdale) [Sub-committee Member]
Ms. Hunter [Sub-committee Member]
Ms. Shaw [Sub-committee Member]
Ms. Skelly [Sub-committee Member]
Mr. Smith (Peterborough—Kawartha)
Ms. Andrew (non-voting member)
Mr. Blais (non-voting member)
Ms. Fife (non-voting member)
Mr. Hillier (non-voting member)
Ms. Khanjin (non-voting member)
Mr. Rasheed (non-voting member)
Mr. Vanthof (non-voting member); and
That, should the electronic participation of any voting Member of the Committee be temporarily interrupted as a result of technical issues, a non-voting Member of the same party shall be permitted to cast a vote in their absence.
Letters filed by Party Leaders and Independent Members
Sunday, March 22, 2020
To: Doug Ford, Premier of Ontario
Rod Phillips, Minister of Finance
Paul Calandra, Government House Leader
From: Andrea Horwath, Leader of the Official Opposition New Democrats
Subject: New Democrat Suggestions for the Financial Statement
On Friday, the Government House Leader informed New Democrat House Leader Gilles Bisson that the government would be willing to accept suggestions with regards to the upcoming Financial Statement provided they were provided before the end of the weekend.
New Democrats support the Finance Minister’s decision not to present a full Budget given economic uncertainty amidst the COVID-19 pandemic. However, the government should act urgently to bolster healthcare funding to fight the pandemic, protect Ontario’s economy and support families and businesses facing significant economic disruption.
This submission lays out key measures the government should urgently take to address the current crisis.
Bolstering our healthcare system
Our health care system needs immediate investment and support. In last year’s Budget, the government’s healthcare investment barely kept pace with inflation and hospital funding was effectively frozen. The Financial Accountability Office analysis noted that the 2019 budget cut overall health spending by $2.7 billion over the next two years as compared to the 2018 budget plan. We now need urgent investment:
· Immediately enhance hospital funding for the coming year by a minimum of $1 billion. The Ontario Hospital Association indicated in their pre-Budget submission, before the COVID-19 outbreak, that this amount (a 4.85 per cent increase in hospital sector funding) was needed simply to address underlying inflationary pressure, and the need to increase service volume and create capacity at the local level.
· Halt all plans for public health restructuring and increase financial support. Provide 100 per cent provincial funding to public health units, so that they are not relying on municipalities for 30 per cent of their funding, especially while municipalities have paused revenue tools like property tax payments.
· Create a fund to recruit back and retain Personal Support Workers (PSWs), many of which have left the profession. The PSW shortage in Ontario was already hurting home care and long-term care before the COVID-19 outbreak. Now it risks hindering COVID-19 containment efforts. Trained PSWs have left the field for other professions and now urgently need to be encouraged to return. Wage and benefit enhancements with longer term plans to provide greater job stability would help achieve this.
· Offer dedicated funding for child-care and other supports for health care, emergency and any other workers deemed essential. The Government’s new Employment Standards Amendment Act (Infectious Disease Emergencies) specifically reserves the right of the government to exempt any class of workers deemed essential. New Democrats agreed to this provision but now it is incumbent on us as a province to provide whatever support these essential workers need as they do their part in this pandemic.
· Provide necessary funding in home and community care to ensure no disruption to critical services like dialysis and cancer treatment. The Government has announced plans to ramp down non-urgent services in hospitals and free up hospital beds by moving patients to community settings. While it is important that hospitals get all the resources they need to respond to COVID-19, the government still needs to ensure they will not reduce or cut critical, lifesavings services provided in the community.
· Set aside additional, dedicated funding to enact measures to protect seniors. Seniors are a vulnerable population measures here should include:
• Enhanced supports for screening at all centres that provide health care services to seniors (long-term care homes, retirement homes, supportive housing, and assisted living)
• Ensure that seniors have access to medication they need, and that they may receive at home so they do not put themselves at risk by going in public to get their medication.
The COVID-19 pandemic has had a devastating impact to millions of Ontario households and the overall economy. Economists estimate that we are now seeing the highest number of Employment Insurance claims ever and the largest employment drop in Canadian history. Urgent action is needed to supplement federal support that will not be adequate or timely enough to meet people’s needs:
· Establish an Ontario Emergency Income program to provide households experiencing unemployment or lost income.
o With an Ontario Emergency Income, any household experiencing unemployment or reduced income would be able apply for a one-time $2,000 cheque or direct deposit.
o Individuals already enrolled in support programs including Ontario Works, Ontario Disability Support Program, Employment Insurance, and the federal Emergency Care Benefit should be automatically enrolled.
o Families with dependents would qualify for an additional $250 per child.
o Payments should be received by April 1, making it possible for monthly expenses due on the first of the month to be paid.
o Enrolling should be available by phone and online to anyone who declares a need.
o People who take advantage of the fund that have not lost their job or had their income reduced will have payments clawed back on their provincial taxes. New Democrats are ready to work with the government and the Ministry of Finance to determine exact criteria.
o This emergency benefit will help households in the immediate term. The government should then work with the federal government to bring in a program for ongoing income support for Ontarians throughout the COVID-19 pandemic.
· Order all utilities to provide interest-free bill deferrals of up to six months to anyone who cites financial need, with penalty-free repayment plans.
· Immediately cancel Time Of Use hydro billing.
· Take whatever steps are needed, including legislation, to ensure that no one can be evicted for any reason during the pandemic, nor punished in any way for missing a rent payment. Despite government measures to stop eviction proceedings many tenants are worried about falling into arrears. Moreover, some tenants report that landlords have issued eviction notices regardless of government action. The Government should work with rent banks and financial institutions to institute grants and interest free loans to ensure no one loses their home or sees living conditions affected because of the pandemic and should institute legislation to ensure those protections.
· All programs and all funding to agencies and organizations currently being funded through transfer payments should be automatically renewed for the upcoming fiscal year so that staff can be retained and people’s needs are met. This should be communicated immediately to the broader public sector including non-profit agencies and organizations.
· Create a new stabilization fund for the non-profit sector to provide financial support for non-profits like food banks. Food banks and other non-profits are reporting declining revenues and increasing need. Their efforts are vital at this time.
· Designate immediate emergency funding for the shelter system, outreach and harm reduction to ensure that vulnerable populations have the support they need to stay healthy and enforce social distancing instructions.
Bolstering small and medium-sized businesses
· Enhance wage subsidies. The federal government has offered a 10 per cent wage subsidy program for small businesses. Many small businesses have noted that this amount will not be sufficient to maintain employment. The province should institute a substantial top-up, so employers can afford to maintain staff on the payroll while business is hampered.
· Working with other levels of government, immediately halt the collection of all payroll, property, sales, and income taxes from small and medium-sized business; including ceasing issuing penalties and fines on taxes owed and limit audits for the remainder of the year fiscal year. Canadian Manufacturers and Exporters have indicated this measure will help businesses who have been hit with severe economic disruption.
· Institute a utility payment freeze for small and medium-sized businesses.
· Postpone tourism and marketing fees for businesses in the hospitality sector. The Ontario Chamber of Commerce has recommended this measure to support the hospitality sector.
· Dedicate additional resources to ensure the food supply chain is maintained and responsive to shortages, including direct support to growers and animal agriculture.
· Create a remote-work set up fund for small-businesses — which could help them with things like setting up an online retail operation, or buying laptops and software for their workforce.
· Work with the insurance industry and the Financial Services Regulatory Authority to institute an auto-insurance grace period for taxis and car-sharing drivers.
Support for municipalities
Municipal governments have limited revenue tools and fiscal capacity, yet the services they provide will be vitally important to Ontarians during the COVID-19 pandemic.
· For municipalities that institute property tax deferrals, ensure the flexibility to defer their remittance of relevant taxes to the province.
· As previously noted, provide 100 per cent provincial funding to public health units, so that they are not relying on municipalities for 30 per cent of their funding, especially while municipalities have paused revenue tools like property tax payments.
March 25, 2020
The Honourable Rod Phillips
Minister of Finance
7 Queen's Park Crescent, 7th floor
Prior to the COVID-19 crisis confronting us, Ontario families had been working hard and playing by the rules. And then they were sideswiped by this terrible virus. They need their government to be there for them and I believe it’s my responsibility to make sure that the Ontario government rises to the occasion to do what it can to support Ontario families and businesses.
There are three priorities through which I am measuring the effectiveness of today’s economic update from the Ontario government. And those are:
The health and safety of Ontarians;
The economic security of Ontarians in the short and medium term;
The recovery of the Ontario economy so that it can once again create the jobs and opportunities our families are counting on.
From the very beginning, I have been determined to work with the government, collaboratively, to help the people we are honoured to serve.
Ontario must take measures now to protect the economic well-being of workers and businesses. Last week, I wrote to you to advocate you match the 10% federal wage subsidy, dollar for dollar. I stand by that but urge you now to consider even more funding to protect jobs and keep food on the table. This is not in the economic and fiscal update that was tabled today – I urge you to take action before it is too late.
I will re-iterate that I hope you study these recommendations carefully. These measures have not been included in today’s legislative package:
Stop price gouging. Use the Emergency Management and Civil Protection Act to stop retailers from gouging customers on items such as Lysol wipes, toilet paper and more.
Remove barriers to testing. While we recognize there is a backlog that must be cleared, we recognize that COVID-19 is affecting more and more Ontarians through community spread. The current testing regulations must be changed to reflect that.
Test all staff in long-term care facilities. We must work quickly to protect our seniors. In communities where community spread is detected, immediately move to test all staff in vulnerable facilities.
Provide help and support to Ontario’s must vulnerable. Leverage existing programs to provide immediate financial relief to those on Ontario Works and ODSP, create a program to support workers who are being hit the hardest (retail, minimum wage earners), and appoint an ombudsperson responsible for responding to the needs of the most vulnerable during this crisis.
Introduce a six-month suspension of provincial payroll charges (like WSIB and Employer Health Tax premiums) for businesses with up to 300 employees, and make it retroactive to January 1st, 2020. This should be a suspension of charges – not a deferral.
Provide Ontarians further relief on electricity prices by temporarily removing distribution and regulatory charges.
Permit licensed establishments providing take-out and delivery services to temporarily sell alcohol.
Be clear about how to preserve the school year using whatever innovative techniques are required, because Ontario cannot afford to fail our students who need to keep learning.
Dramatically scale-up funding to finally provide universal mental health support and treatment. It’s become clear that the impact of this crisis on our mental health will be considerable and we will need this support in order to weather the storm.
We look forward to your response to these recommendations. Ontario must do everything it can to weather this storm.
Steven Del Duca
Premier Doug Ford
Toronto ON M7A 1A1
March 20, 2020
Dear Premier Ford,
- Suspend limitation periods in the Limitations Act
- Suspend LPAT limitation periods
- Suspension of financial penalties with respect to missed timelines for building inspections
- Provide daily public health information in multiple languages
Cc: Hon. Min. Christine Elliott, Ministry of Health <email@example.com>
Hon. Min. Rod Phillips, Ministry of Finance, <firstname.lastname@example.org>
Concerning Bill 188
Speaker Ted Arnott
In a motion adopted unanimously by the House on March 25th, it was agreed that all party leaders and Independent members of the House are permitted to table their concerns regarding Bill 188 with the Speaker and to be delivered to the Standing Committee on Finance and Economic Affairs to consider.
Please accept this letter in accordance with the motion dated March 25th 2020.
There are four constituent parts of Bill 188 that require Legislative oversight and I request the Standing Committee to examine these in detail. They are: the government’s forecasts, the $4.8 billion in reserve funds, the $32 billion in authorized borrowings, and the impacts on personal privacy.
Currently the legislation as written and passed permits the government to access these funds/borrowings without any need to account for these expenditures or borrowings.
It is imperative that the government demonstrate its commitment to accountability and transparency. These funds/expenditures and borrowings must be utilized in a prudent manner and with the knowledge of the Legislature who agreed to the expedited passage of the Bill through unanimous consent.
The most practical manner that this can be achieved, being cognizant that the Assembly and its Committees may have little or no sittings days are thus:
Submission of the Financial Accountability Officer
Full submission available at:
Appendix D: Dissenting Opinion of the New Democratic Party Members of the Committee
What We Heard
The Government members of this committee may want to pat themselves on the back for finally getting around to listening to small business owners – three months after the pandemic started – but throughout this process the Official Opposition heard a different story. The discrepancies between the Government account and the testimony reinforce the opinion that the Ford Government response to the crisis, while better than nothing, has time and time again been a day late and a dollar short.
When this crisis began, Ontario’s business owners and the hard working people who power them were all told by the government that, if we wanted to beat this virus, they had to shut down and stay home. This meant putting their lives on hold and their livelihoods in jeopardy. But while workers and businesses did their part for Ontario, the government refused to do theirs. While businesses and advocacy groups like the Canadian Federal of Independent Business and the Ontario Chamber of Commerce were calling for rent relief, wage supports, and a moratorium on commercial evictions, the government instead chose to wait for others to act and take credit for the federal government’s action.
And despite the committee, businesses owners and workers are concerned about the costs of reopening and how they’re going to pay for PPE and the protections the need to keep themselves and their customers safe. They’re worried about problems accessing insurance. But increasingly they’re worried about how they’re going to deal with the extra debt that the government put them into with their loans and deferrals. This crisis has been one of the most difficult times in Ontario’s history. Hundreds of thousands of everyday families lost their jobs and business owners still don’t have a clear path back to normal.
Even though they went without income for three months landlords still expected the rent in full, insurance and utility companies still demanded that bills were paid, and when businesses went to the government for support they were met with silence. The committee majority may talk a lot about Ontario being open for business – but after months of inaction from the government – this crisis has meant the permanent closure of thousands of small businesses. Many more are on the verge of closing but still the government and their majority on this committee continue actively ignoring the concerns of businesses.
Reports and the testimony from the FAO make it clear that nearly 75% of the Government’s response comes in the form of tax deferrals, allocations committed prior to the start of the crisis, and the reversal of cuts made by the Ford Government in last year’s budget instead of actual dollars spent on providing relief that Ontarians need more than any other time in recent history.
Save Main Street
While the government and the committee majority may not have chosen to listen to businesses, the Official Opposition New Democrat Caucus has always been on the side of business owners and we’ve been fighting for what matters to them. That’s why, after consulting with business owners from every corner of the province the Official Opposition New Democrats released the Save Main Street plan. This five point plan provided concrete solutions to the concerns that Ontario businesses were raising – and unlike the government’s plan – was built directly on the suggestions of those in the business community.
- A 75 per cent commercial rent subsidy up to $10,000 a month for three months
- A utility payment freeze
- A remote-work set up fund, which could help them with things like setting up an online retail operation, or buying laptops and software for staff
- An auto insurance grace period for taxis and car-sharing drivers, established in partnership with the insurance industry and the Financial Services Regulatory Authority
- A designated emergency fund for small businesses and entrepreneurs who have faced historic barriers to accessing traditional capital, as proposed by the Canadian Black Chamber of Commerce.
The Committee heard during their consultation that many of the concerns Ontario’s small businesses are facing could be solved if the government chose to adopt these simple, concrete, solutions. We know that our economy will not go back to normal overnight. So it’s essential that the government to step up with the direct financial supports and services that businesses need today. We’re calling on the committee to ensure that that businesses have these supports in place for as long as the impacts of the pandemic are with us as well.
The NDP Official Opposition has four main recommendations
1. That the government take the advice of the Official Opposition and of business advocacy groups like the Ontario Chamber of Commerce and the Canadian Federation of Independent Business and adopt the Ontario New Democrat Caucus’s Save Main Street plan
a. This includes working with business owners and land lords on a rent relief program that works for everyone – and doesn’t just lead to more debt and evictions like the current program
2. That the government release a set of clear guidelines for the distribution of pandemic pay for frontline workers – including a clear rational, and specific criteria for eligibility and timelines for delivery of fund from the government
3. That the government immediately introduce specific strategies and new direct funding options to support the call from the Canadian Black Chamber of Commerce as referenced by the Min of Finance
4. That the government provide clarification on current economic supports for Indigenous communities and reduce red tape for Indigenous business owners and communities who need
Appendix E: Dissenting Opinion of the Liberal Party Members of the Committee
The Ontario Liberal committee members would like to thank the Minister of Finance and the Financial Accountability Officer for making presentations to the committee. We heard very different economic updates about the state of the Ontario economy during COVID-19 pandemic, and where it is forecasted to end up over the next few years. Below is a summary of our recommendations:
The Ontario Liberal caucus is calling on the provincial government to address this crisis by taking the following immediate action:
· Table a fiscal update before July 15th;
· The creation of a multi-year financing pay-back program for small and medium businesses to repay deferred taxes, with an option of forgiveness.
· There needs to be a centralized support hub for businesses to access services and information, to help limit the amount of bankruptcies and avoid permanent business closures;
· Replicate the Quebec government’s approach to CECRA, making the program more attractive to landlords, with the government taking on a larger share of the rent burden, reducing the landlord’s percentage from 25 to 12.5;
· The Government of Ontario needs to address these realities by providing relief, supports, and programs for students and youth, low-income Ontarians, and Ontarians with disabilities;
· The creation of the Ontario Emergency Municipal Support Fund with an available a minimum of $4 billion, cost-shared with the federal government, to provide urgent relief funding to municipalities facing financial hardship;
· Doubling the funding provided to qualifying municipalities in 2019 through the existing Provincial Gas Tax Program so that those communities with local public transit have the support needed to continue operating their systems without fare increases; and,
· Expediting provincial infrastructure funding to already-approved and viable projects that municipalities have previously budgeted for as a form of significant local and regional economic stimulus.
In governance, transparency is of the utmost importance, especially in democracies. Ontario has yet to see a fiscal update from the Ontario Government since March 25, a few weeks into this pandemic. On July 8th, the Government of Canada will give the country an economic update of the impact of the pandemic on the Canadian economy, but the Ontario government is still making economic decisions based on pre-pandemic projections. Premier Ford needs to provide a fiscal update before July 15th as Ontario enters the final stages of reopening. Ontarians deserve to know the full economic impact of the shutdown.
The Minister of Finance informed the committee that he plans to introduce a fiscal update by August 15th. That is too long of a wait to evaluate spending decisions during this crisis. In his presentation to the committee, the province’s Financial Accountability Officer (FAO), indicated that the pandemic has pushed Ontario in a sharp recession projecting a 9% decline in real GDP, and a record $41 billion deficit: twice as large from the Government’s projections back in March. The disparity between the FAO’s data and the province’s projections in March shows that now is the time for a fiscal update.
The FAO also stated that 2.2 million workers have been directly affected by the crisis. Ontarians deserve to understand the economic effect on their communities, and should hear it from the Government’s Ministry of Finance. When the economy spirals in such turmoil, the books need to be open. Now is not the time to be silent. Ontarians’ fear about the health of the economy is growing and requires clear and direct communication from their government. Ontarians deserve answers on the economic impact of COVID-19 thus far on Ontario, and what it means for the future of the province. Specifically:
· How much does the provincial government provide Ontarians with direct new spending due to COVID actions?
· Are the existing supports just reversals to cuts from previous budgets?
· How much have we lost in tax revenue from business shutdowns and the loss of jobs?
· What is the Ford Government’s forecast for projecting a full economic recovery for Ontario?
Accurate fiscal information is necessary to evaluate program spending to determine who needs support and how to provide it best. From the sections below, it will become clear that government support will need to come from various mechanisms to support Ontario’s economic recovery.
The Ontario Liberal Caucus has held over 20 consultations across different sectors in the province regarding reopening and recovering the economy. The vast majority of Ontario businesses need more from their government.
Organizations are having trouble accessing PPE and supplies to protect employees and consumers. In addition to supply chain issues, businesses are also facing increased costs to implement health and safety protocols with no help from the government. Committee members heard that small businesses needed assistance in covering the costs of reopening, such as plexiglass for restaurants.
Many businesses in other provinces and across the continent are applying a COIVD-19 surcharge on customers to make up these costs. As we enter stage two of reopening our economy and promoting economic recovery, we cannot allow businesses to take on these costs alone. A COVID-19 surcharge will affect consumer spending and hurt enterprises even further. Businesses need support for these new costs.
We also heard repeatedly that reopening guidelines are very vague, which is causing interpretation issues between government and local public health units, affecting the ability of people to re-open their businesses. Businesses need clarity and time to prepare, and they are hesitant to invest in costly adaptations for unclear public health measures that are required.
As businesses shift to online services and meetings, this is disproportionately impacting many Ontarians in rural communities where there is a lack of broadband infrastructure for high-speed internet and use of Xplorenet. Information, video conferencing and the ability for purchasing from suppliers are all examples of the difficulties many rural businesses are facing. Instead of travelling to urban communities to meet with stakeholders, the many business owners who are doing the right thing by staying in their homes are seeing their businesses' local economy suffer.
Many small businesses are falling through the cracks of federal programs and need the province to fill in the gap. New and seasonal companies who do not have the revenues from the year prior do not qualify for the Canada Emergency Wage Subsidy (CEWS). Those with contractors, instead of payroll employees, also do not qualify for it. The wage subsidy also needs to be extended so employers can continue to afford operations.
There needs to be a centralized support hub for businesses to access services and information, to help limit the amount of bankruptcies and avoid permanent business closures.
Ontario’s ban on commercial evictions may help small businesses in the immediate term but not in the long run. The Government is not doing much to support commercial landlords either.
Consider small-business owner Courtney Anderson’s case: Anderson told the CBC that he has put every resource he has into his Caribbean restaurant in Ajax. Coincidentally, in the same riding of the Finance Minister. His restaurant is struggling since the closure with sales reducing to fraction from when it opened. Although his landlord applied for the CECRA, he still needs to pay 25% of the rent. To cover the cost for April, May and June, he needed to borrow from his family. When it comes to the months ahead, he says, “I don’t know if I’m gonna (going to) make it. I’m trying.” Anderson’s story is a carbon copy of many small-businesses in the province.
We heard in committee that the CECRA program is voluntary, and the feedback the some of the committee members heard from landlords, is that they are reluctant to participate in the program. From the perspective of a commercial landlord, Premier Ford's Government could do much more for them. The provincial government needs to step up and do their part as the federal government has. Toronto landlord Susan Chiu, who has five commercial properties and 30 tenants qualified for the CECRA, also spoke with the CBC. She is baffled by the eviction ban. "There's no one to move in. It doesn't make business sense for a landlord to evict a tenant." Chiu still fears for her losses. The consensus opinion of building owners is that it is not fair for them to take on the losses of their tenants.
Benjamin Shinewald, The President of Building Owners and Managers of Canada, deemed the best course of action is providing direct rent relief to tenants and let them come to terms with their landlords. Many of the small businesses whose landlords have not applied for CECRA certainly feel the same way. CECRA is a federal program, but when it comes to possible future expansions, Ontario should work with the federal government to restructure the program based on these recommendations so we can have an effective solution.
Many landlords are also weighing whether lower rent is better than a vacancy. In an attempt to help save businesses and encourage landlords, the Quebec Government provides a more substantial contribution towards CECRA to assume more of the landlords' cost. Landlords of CECRA eligible Quebec properties see a reduction of 50% in the amount typically forgone by CECRA, with the Quebec government taking on a larger share of the rent burden, reducing the landlord’s percentage from 25 to 12.5. Meanwhile, Ontario has done nothing to step up to the plate.
The current CECRA program is not working. With data as of June 8, the federal government has paid out 2% of the budgeted $3 billion for this program. CECRA does not entice landlords, and this leaves small businesses behind. Minister Phillips stood before the committee, affirming that the government is taking action to support businesses, but favouring a failing program does not help Ontario's business owners and commercial landlords.
Deferred Business Taxes
Small businesses are facing unprecedented losses through no fault of their own. Most small and medium enterprises (SMEs) do not have access to the same financial instruments as large corporations and have a reduced capacity to weather this economic storm. We heard in committee that the Ontario’s Action Plan was intended to defer provincial taxes for a period of five months, to improve businesses cash flow. It was pointed out to Minister Phillips that business belief that in six months this will compromise their ability recover as an economy.
The road to economic recovery will take many months and years, as the pandemic will have extended impacts on consumer behaviour and purchasing power which is particularly true for SMEs in the tourism and culture industries, which depend on seasonal revenues and may not be able to resume normal operations until we have a vaccine and it is safe for Ontarians to gather in large numbers.
To prevent permanent closures, further job losses, and to allow for businesses to fully recover, an effective tax relief plan is needed. Companies will not be able to pay deferred taxes in addition to accumulated debt in a matter of weeks and months. Our province needs to structure a multi-year repayment plan for deferred taxes, with an option for forgiveness of a portion which will help keep businesses from permanently closing and help build a climate of investment that will accelerate Ontario’s economic recovery.
Low Income Ontarians, Youth, and those with Disabilities
In the Interim Report, the Committee heard that the hardest-hit sectors of the economy are public-facing, as services, retail, and hospitality sectors closed their doors as Ontarians stayed home to stop the spread of COVID-19.
These public-facing industries employ women, new Canadians, and youth in proportionally higher numbers. In Committee the FAO confirmed in their presentation that these public-facing sectors of the economy have been the hardest hit. Many of the jobs in these industries are part-time and pay low hourly wages. They are also slower to resume operations as limits on social gatherings continue into the summer, impacting tourism and cultural events.
Many high school and post-secondary students seek summer employment in seasonal tourism and cultural events. For the second time in its 142 year history, the Canadian National Exhibition has cancelled the annual festivities that attract visitors to the city and provides employment opportunities for hundreds of Ontario's youth. Across the province, summer jobs are disappearing for youth, and many are unlikely to return this year.
At the same time, the cost of living is going up for many during the COVID-19 pandemic—families with children no longer can rely on school or childcare. Low-cost summer recreational activities, including local programming, are unable to continue as planned or face limited enrollment to allow for physical distancing. Families face new costs to keep their children educated and entertained at home.
Ontarians with disabilities also face increased costs. Food prices increase as the pandemic impacts supply chains of fresh meat and produce, making it more expensive to eat nutritious food. Immuno-compromised Ontarians may no longer be able to rely on public transit safely or do their shopping. For months, the medications that Ontarians require have been dispensed in 30-day supplies, tripling regular dispensing fees. These impacts add up to people on low and fixed-incomes.
While the government has taken some positive actions, including a moratorium on residential evictions, small payments for families with children, and income support from the federal government, in many cases, they are insufficient to meet peoples' needs.
The Government of Ontario needs to address these realities by providing relief, support, and programs for students, youth, low-income Ontarians, and Ontarians with disabilities.
The Government of Ontario, acknowledging that summer employment opportunities have disappeared for thousands of young Ontarians, should reverse their cuts to OSAP to prevent students from dropping out because they cannot afford tuition. Ontario's future needs help now. The province should join the federal government in doubling student grants, and forgive the grants that were converted into loans for many Ontario students. The government should also provide training programs for youth to address the lost workplace skills and experience due to summer unemployment.
The government should also move to provide rent relief directly to families at risk of eviction after the pandemic subsides. Direct financial support will assist families with accumulated debt to make ends meet and prevent a wave of evictions in the fall.
Finally, the government should increase financial support for Ontarians in the ODSP program by making additional COVID-19 funds universal and automatic for all enrolled in the program. The government should not claw back CERB benefits from those on ODSP who have lost their supplementary income sources. Ontarians with disabilities face unique financial challenges resulting from the COVID-19 pandemic, and should not be treated as an expendable afterthought by their government. All Ontarians deserve to be supported with dignity as we face these unprecedented challenges.
The COVID-19 crisis has dealt a devastating blow to Ontario municipalities. The combination of increased expenses and a dramatic reduction in revenues leads to a crisis that threatens to stifle economic recovery and leads to social discord.
With millions of Ontarians remaining at home over the first three months of the COVID-19 crisis, municipalities across the province have seen a significant revenue decline. Ontario's Large Urban Mayors have projected a shortfall in transit revenue of over $400 million from April to June. So, the 100 million of direct support to municipalities, that the Minister informed the committee about, will not come close to covering the revenue shortfalls.
While revenue from room rentals and fees for adult and youth programming has all but evaporated, the costs of maintaining and operating community centres, arenas and pools are mostly unavoidable. With millions of residents off work, some are unable to pay property taxes and utility bills in a timely fashion. As like most other employers, municipalities also face increased costs related to physical distancing measures, personal protective equipment, and public health expenses. All told, municipalities across Ontario are in deep financial trouble.
According to an analysis published by RBC, Ontario municipalities face a revenue shortfall from user fees and property taxes approaching $5 billion. Unlike the federal and provincial governments, municipalities cannot run operating deficits, which leaves them with bleak options: draconian spending cuts, huge increases to property taxes, or both.
The City of Toronto is projecting the possibility of a $1.5 billion shortfall as a result of the COVID-19 crisis. Without service cuts, this would require a 47% increase to property taxes. To avoid significant tax and user fee increases, layoffs and cuts to services that Ontarians rely on daily to maintain their high quality of life, the province needs to assist its municipalities.
With millions of Ontarians remaining home to comply with public health guidance, transit agencies have seen an unprecedented drop in ridership and a sharp drop in transit fares that fund the majority of their operating costs. In a memo to their city council, Ottawa's OC Transpo sees 70-90% lower levels than usual.
The Minister admitted to committee that we are a long way from restoring consumer confidence, even with a national approach to contact tracing. Even if a second wave event does not occur, a lack of adequate support will force transit agencies to reduce service, increase fares and potentially lay off employees. As we contemplate Ontario's economic recovery, we cannot overlook the value of public transit.
Here is what Toronto Mayor John Tory had to say to reporters back in May:
“Increased transfers from provinces for all sizes of cities, or targeted funding for public-transit operations for larger ones could help. Transit funding may also speed economic recovery if it subsidizes more trips with fewer passengers per trip. Making it safe for people to stay on the train rather than drive would also alleviate pressures on other infrastructure and mitigate carbon emissions.”
Appendix F: Dissenting Opinion of the Green Party Member of the Committee
COVID-19 brought Ontario and the world to a standstill. Small businesses were forced to shutter for months. Families were kept apart from their loved ones. Frontline workers were left with no choice but to wade into danger every day.
Despite the hardships it has caused, the Green Party of Ontario believes the Province responded appropriately by putting our economy and lives as we knew them on pause.
What we have seen during this time is that this legislature and this province can work together to put people first.
This crisis has reminded us what is possible when we count on each other, respect science, and cooperate on creative solutions.
While the Government has provided some limited monetary support to people and businesses, it has, unfortunately, come up short in providing the substantial and meaningful relief needed to provide care for people, especially our elders, and to ensure our economy can rebuild in a way that builds a bridge to a greener, healthier, and more caring Ontario.
For example, the government boasted of providing a $17 billion pandemic response package of which $7 billion was in direct funding and $10 billion in tax deferrals. The Financial Accountability Officer, however, made it clear to the Committee that only $4.5 billion was new, direct funding.
On March 20, the Green Party of Ontario encouraged the government to implement a number of recommendations to help the people and businesses of Ontario weather this storm.
Unfortunately, few recommendations were implemented. And if they were, they were done so after a significant delay, leading to increased anxiety and in some cases personal and commercial financial distress.
The Green Party of Ontario would encourage the Government to use the contingency and reserve funds set aside in the March 2020 Economic and Fiscal Update to immediately provide the following:
The Covid-19 pandemic has laid to bare the inadequacy of our province’s social security nets. Ontario must work with the Federal government, to embrace a permanent basic income program to guarantee no one falls through the cracks and worries about putting food on the table when an emergency hits.
Support for Small Businesses, Non-Profits and Charities
The Government has failed to provide adequate support to small businesses, non-profits and charities. Ontario must stand up for local independent businesses, non-profits and charities by giving them access to funding to reopen safely and by providing protections against commercial evictions so they can begin once again to create jobs and support vibrant communities. The Finance Minister should report back to the committee on the number of small businesses who have accessed the CECRA program and how much money the government has spent on the program.
Reverse Cuts to Public Health
The Covid-19 pandemic has highlighted the importance of a fully funded and effective public health system. This government should reverse all cuts to public health made in the 2019 budget and provide 100 per cent provincial funding to public health units.
Provide Funding for Municipalities
Due to the downloading of many costs from the Province to municipalities, municipalities require immediate funding to ensure they are solvent and able to provide necessary social and infrastructure support. The Green Party of Ontario’s funding recommendations include:
1. Providing a $350 million operating grant to cover the operating costs of municipal-run long-term care homes;
2. Restoring provincial funding for community housing;
3. Increasing emergency stabilization funding for shelters, food banks and other non-profits;
4. Fast-tracking funding for already approved infrastructure projects;
5. Creating a multi-billion dollar active transportation fund for municipalities;
6. Restoring the previous funding formula for child care;
7. Funding 50% of local transit operating costs for municipalities;
8. Doubling the municipalities’ share of gas tax funding; and
9. Allowing municipalities to implement new revenue generating tools, including road tolls, parking levies and land value taxation
The Government’s March 2020 Economic and Fiscal Update did not adequately anticipate the financial devastation that the people of this Province would be enduring. This pandemic has cost us dearly and governments should not pin those costs on people and the planet.
Our economic recovery should not come at the expense of our communities - it should restore and empower them.
 The members of the OJRC are: Minister of Finance (Chair); Minister of Economic Development, Job Creation and Trade; President of the Treasury Board; Minister of the Environment, Conservation and Parks; Minister of Municipal Affairs and Housing; Minister of Transportation; Deputy Premier and Minister of Health; Minister of Agriculture, Food and Rural Affairs; Minister of Energy, Northern Development and Mines and Minister of Indigenous Affairs; Minister of Natural Resources and Forestry; Minister of Infrastructure; Minister of Heritage, Sport, Tourism and Culture Industries; Minister of Government and Consumer Services; Minister of Labour, Training and Skills Development; and the Associate Minister of Small Business and Red Tape Reduction.
 See Ontario Hospital Association, 2020 Pre-Budget submission https://www.oha.com/Bulletins/OHA%20Speaking%20Remarks%20-%202020%20Ontario%20Budget%20Consultation%20Jan%2017%202020.pdf
 See Ontario Health Coalition Report “Caring in Crisis: Ontario’s Long-Term Care PSW Shortage” https://www.ontariohealthcoalition.ca/wp-content/uploads/final-PSW-report.pdf
 See comments by Professor Trevor Tombe, Associate Professor University of Calgary https://twitter.com/trevortombe/status/1241061606353596418
 See comments from the Canadian Federation of Independent Business to Global News https://globalnews.ca/news/6696920/ottawa-wage-subsidy-too-low-small-business-cfib/