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Ontario using billions in pandemic funding by March, deficit still record high

TORONTO — Ontario will spend all of the $13.3 billion in pandemic funding it received from the federal government by the end of March, although that won't change the record deficit it expects to rack up this year.
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TORONTO — Ontario will spend all of the $13.3 billion in pandemic funding it received from the federal government by the end of March, although that won't change the record deficit it expects to rack up this year.

The province has been criticized for being too slow to spend the one-time funding from Ottawa but Finance Minister Peter Bethlenfalvy said Wednesday that the last $2.6 billion of that allotment would be used for a grant program for small business, and to support hospitals and long-term care homes.

The spending will not affect Ontario's overall fiscal picture and the province still expects to rack up a deficit of $38.5 billion, something Bethlenfalvy said will eventually need to be addressed.

"Our singular focus right now is protecting people's lives and their livelihoods," he said as he delivered an update on the province's third quarter finances.

"Deficits are not sustainable in the long run. But I'm a big believer in the people of Ontario ... and I think we have the opportunity to come back stronger from an economic point of view."

The COVID-19 pandemic has taken a heavy toll on Ontario's finances.

Last March, the Progressive Conservative government said the deficit would reach $20.5 billion by the end of 2020. It later revised the projection due to billions more in spending required by the pandemic.

Wednesday's fiscal update came after weeks of opposition criticism that the province had failed to allocate billions in federal funding to necessary pandemic measures.

Those funds should be spent on paid sick days, bolstering school safety, and offering further help to small business hurt by lockdowns, opposition politicians had said.

Bethlenfalvy said Wednesday that the province's balance sheets prove that Ontario has, or will soon, spend the money.

The province had to be prudent and reserve some of its spending throughout the year in order to cope with unanticipated circumstances during the pandemic, he added.

"Some have criticized our plan," Bethlenfalvy said.

"They've claimed that we haven't spent the money. These claims are simply incorrect. Thank goodness we were prepared. Just consider all that's happened since November."

The minister also said the province has set aside a $3.9 billion contingency fund -- up by an additional $2.1 billion -- to address any further spending needs from the pandemic for the rest of the fiscal year.

Green party Leader Mike Schreiner said the contingency fund shows Ontario has left billions unspent that could be used to address the pandemic.

“The Ford government is failing to do what it takes to protect people and small businesses from the worst of the pandemic by hoarding rainy day funds," he said in a statement. "Premier, the rainy day is here and it’s pouring."

Liberal Leader Steven Del Duca said the province continues to hold back billions in unspent COVID-19 contingency funds.

"Doug Ford continues to hoard billions of budgeted COVID response funds, while small business owners suffer, nursing homes are in crisis, and class sizes remain unsafe,” he said in a statement.

NDP finance critic Catherine Fife said she is still concerned the government has not moved quickly enough to spend the billions in funding, despite what Bethlenfalvy said Wednesday.

"This government missed significant opportunities to invest in keeping workers safe through not bringing forward a progressive paid sick leave program," she said.

"They really neglected their responsibility with regards to long-term care homes and we have students going back to school this week ... and the testing and contact tracing piece of that equation has not been invested in."

This report by The Canadian Press was first published Feb. 10, 2021.

Shawn Jeffords, The Canadian Press