Ontario Premier Doug Ford arrives at Queens Park as the Ontario legislature resumes in Toronto on Oct. 21.Chris Young/The Canadian Press
Ontario Premier Doug Ford plans to send most residents a $200 tax-free rebate cheque early next year, a $3-billion promise that could deepen the province’s deficit – and that opposition parties criticize is a ploy to win votes ahead of a possible early election.
At a campaign-style announcement of the pledge on Tuesday, where the Progressive Conservative Premier repeatedly took aim at Ontario Liberal Leader Bonnie Crombie, he cited the high cost of living, inflation and the impacts of federal policies such as carbon pricing as the reason for the move.
The government said the cheques will go to 12.5 million adults, as well as the parents of the province’s 2.5 million children, regardless of their financial situation. The Premier said only residents who pay taxes will receive cheques, though people who are bankrupt or incarcerated will not. He also confirmed that the cheques will not be means-tested, meaning they will also be mailed to high-income earners.
Details about the cheques will be included in Wednesday’s fall economic statement, which will also outline the state of the province’s finances. According to the last figures the province made available, it was still on track to record a $9.8-billion deficit for 2024-25. This deficit was almost double what the government had said it was expecting just the previous fall.
Opinion: Ford government should stop the $200-cheque gimmick and finally cut taxes
The next election in Ontario is not scheduled until June, 2026. But Mr. Ford, whose government has a majority, is considering moving up the vote to 2025, before a federal election campaign.
The Premier said his government is able to pay for the rebates because of higher-than-expected revenues as a result of inflation on provincial sales tax revenues, and the impact of recent changes to the federal government’s capital-gains tax.
“Taxpayers are the best people to decide how to spend their money,” Mr. Ford said at the announcement in Scarborough. “As I always say, this money belongs to the taxpayers, not the government.”
He also attempted to link Ms. Crombie, the former mayor of Mississauga who has not acquired a seat in the Ontario legislature since becoming Liberal Leader last December, with the federal carbon pricing regime. However, she has repeatedly said she would not bring in a provincial carbon tax if elected.
Governments that have in the past handed out cash en masse have done it after posting a budget surplus, as Ontario’s PCs in 1999 and Alberta’s Conservative premier Ralph Klein in 2006 did.
In its March budget, Ontario did not project a balanced budget until 2026-27, two years later than it had forecast in 2023. However, the government uses conservative economic growth estimates. Under a “fast growth scenario” outlined in this year’s budget, the province did say its deficit for this year could be as low as $6.1-billion, and that it could even balance its books by next year.
Still, it is likely that the $3-billion worth of cheques being sent out will be drawn from borrowed cash and add to the province’s net debt load, which is currently pegged at a record $439-billion. Back in June, credit rating agency Morningstar DBRS upgraded the province’s credit rating to AA from AA(low), citing its “prudent fiscal discipline.”
Brian Lewis, a former Ontario chief economist who is now a fellow at the Munk School of Global Affairs and Public Policy at the University of Toronto, said that based on the province’s current projected borrowing costs of 4.65 per cent, the giveaway will run the province an extra $140-million a year in interest, in perpetuity.
“It’s not free money,” Mr. Lewis said.
Opposition parties criticized the move as a gimmick intended to buy people’s votes.
NDP Leader Marit Stiles said the one-time payment will do nothing to address the affordability crisis and the government should focus on building more homes, hiring doctors and fixing schools.
“They think they can throw $200 cheques at people and that that’s going to somehow buy them the goodwill of the people. And I think people see through this,” she told reporters at Queen’s Park.
Ms. Crombie said Mr. Ford’s government should focus on fixing the health care system, noting 2.5 million people are without a family doctor, and that the Liberals would bring a middle-income tax cut if elected.
“The Premier is attempting to bribe Ontarians with their own money,” she said.