The Ontario government presented its 2024 Fall Economic Statement yesterday, emphasizing improved fiscal health and a planned rebate for residents, potentially in anticipation of a 2025 election.

The fiscal outlook for the province is better than anticipated, with the deficit for 2024-25 now forecast at $6.6 billion, significantly lower than the initial $9.8 billion estimate. Further projections suggest a reduction to $1.5 billion in 2025-26, with a surplus of $900 million anticipated in 2026-27. Factors contributing to this outlook include an improved revenue and economic growth picture, though the government warns of uncertainties that may alter these projections.

Under a “fast growth” scenario, for example, Ontario’s finances could see a deficit of $4.2 billion in 2024-25, moving to surpluses of $6.2 billion and $11.4 billion in the following years. The less optimistic outlook could result in deficits in the range of $8.8 billion, $8.4 billion, and $8.3 billion through 2026-27.

The province’s debt-to-GDP ratio, initially pegged at 39.2% in the 2024 budget, is expected to decrease to 37.8% by 2024-25. Real GDP growth, projected at 0.9% in 2024, is anticipated to rise to 1.7% in 2025 and reach 2.3% by 2026 and 2027.

As we noted in an earlier blog one of the government’s key proposals in the Fall Economic Statement is a plan to deliver a one-time tax rebate aimed at alleviating the high cost of living. The measure will offer $200 payments to eligible Ontario taxpayers and their children. To qualify, adult recipients must have filed their 2023 income tax and benefit return by December 31, 2024, must not have been bankrupt or incarcerated in 2024, be 18 or older and have been an Ontario resident as of December 31, 2023. Children under 18 may also qualify if their parents are eligible for the 2024 Canada Child Benefit. Families that are ineligible for the benefit may still access the rebate through an unspecified alternative method. A family of five (two adults and three children under 18) could receive up to $1,000 under the program.

The rebate—estimated to cost the treasury $3 billion—is due to be paid in early 2025 and will be funded by debt in the near term, but the government is anticipating that higher tax revenue will cover the cost of the initiative over time. Again, this is dependent upon the accuracy of the government’s fiscal projections and the direction of a less-than-certain economy. An estimated 12.5 million adults and 2.5 million children will receive the benefit.

The Fall Economic Statement featured several other new spending measures, including:

• $17.7 million in 2026-27 to broaden the Ontario Learn and Stay Grant, now including undergraduate students that commit to serving as family physicians in Ontario post-residency
• A proposed extension of the temporary gas and fuel tax rate cuts to June 30, 2025. The tax rate would remain at 9 cents per litre
• A proposed increase of the Ontario Municipal Partnership Fund by $100 million over two years—bringing total funding to $600 million by 2026—to assist municipalities in covering program and infrastructure expenses
• A proposal to boost funding by $150 million over two years for the Ontario Fertility Program. The increased funding will support in vitro fertilization (IVF) procedures, expand clinic capacity, and reduce waitlists in both hospitals and community clinics. The government will also introduce a tax credit—at a cost of $115 million over three years—in January 2025 to cover up to 25% of eligible fertility treatment costs, including IVF cycles, fertility medications, travel expenses, and diagnostic testing

The RH Partners Team

For more on the measures contained in the 2024 Fall Economic Statement, or to discuss your tax, accounting and assurance needs, contact us today.