Categorized | Canadian Politics

Ontario dips into reserves to cover increased costs of free tuition and college strike

Posted on 22 February 2018 by admin

Money is taken from the province’s $500 million reserve fund but Finance Minister Charles Sousa says the budget will be balanced.

Higher costs for student loans – including for college learners whose courses were extended because of a fall strike — forced the province to dip into its $500 million reserve fund in the third quarter.

But Finance Minister Charles Sousa said Thursday the Liberal government remains “on track” to balance its budget before the June 7 election.

The finance department’s report on three months ending Dec. 31 said “greater demand” for free tuition following the early launch of Ontario Student Assistance Plan applications pushed costs up by $118 million.

Another $20 million went to college students following a five-week strike that forced some programs to continue into the New Year.

The government spent a further $8 million to provide fare discounts to PRESTO card users transferring from GO Transit lines or the Union-Pearson Express to the TTC.

Overall, expenses in the quarter were $215 million more than forecast in last spring’s budget.

Revenues came in $115 million higher, with drops in personal income taxes and land transfer taxes offset by higher revenues from corporation taxes and the Ontario Lottery and Gaming Corporation.

The revenues from personal income taxes totalled $33.3 billion, $1.7 billion lower than forecast. Corporations tax revenue was almost $1.6 billion higher than expected at $15.4 billion.

Sousa said in a statement that the “uncertain global economy” presents challenges for Ontario given tricky NAFTA negotiations, reductions in U.S. corporate taxes under the Trump administration, a slowdown in household spending and the pinch rising interest rates will put on consumers with debt to manage.

The finance minister has not made public a date for his spring budget, but has said it will be presented after the federal government’s fiscal blueprint on Feb. 27.

That means the Liberal government’s pre-election budget — which will be a preview of the party’s campaign platform — is not expected until later in March.

The election campaign officially begins May 9.

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