It’s my pleasure to speak this morning on the notice of motion regarding budgetary policy for our government. It is my pleasure to do that. And I’m very pleased to be part of the government now—but budgetary policy going back to 2018, and now to 2024, in the budget released on Tuesday by the minister.

I’ll be going through a number of different areas in this budget because I think there are so many important elements to it, whether it’s the infrastructure plan—a record investment, over a 10-year period, of $190 billion; the economic development initiatives that we’ve been undertaking in so many areas, as a government; and the fiscal environment that we find ourselves in, the economic environment, which has been more challenging than was the case last year. It’s certainly a pleasure to work with the Minister of Finance and the Ministry of Finance budget team on this. The minister has been terrific. It has been a pleasure being his PA for the last while. And I look forward to ongoing work with the government.

Touching on a couple of those themes, and starting with the fiscal environment—over the past six years, as our economy and population have grown, our government has been delivering on our plan to build Ontario. But like the rest of the world, Ontario continues to face economic uncertainty due to high interest rates and global instability. These challenges are putting pressure on Ontario families as well as public finances. High inflation, high Bank of Canada interest rates and the high cost of the federal carbon tax have pushed costs up. Households are struggling.

Faced with the challenges, our government might have chosen to raise taxes, reduce investments and services, or download costs on municipalities. Our government is taking a different approach. We are continuing to invest in Ontario’s people and communities. We are doing what’s needed to get it done.

Looking more closely at the fiscal situation—like the rest of the world, Ontario continues to face these economic challenges that I mentioned. The outcomes of persistently high interest rates and inflation continue to be unclear. However, Ontario’s economy has demonstrated continued resiliency in light of ongoing economic pressure. By taking a responsible approach to fiscal management while creating stronger communities for future generations, the government is continuing to make progress on its plan to build Ontario together.

Ontario’s economy performed stronger than expected in 2023, despite continued economic headwinds prompted by elevated consumer price inflation and interest rates. Nearly all private sector forecasters expect continued, but slower, growth in 2024 compared to the projection in the 2023 budget.

Ontario also experienced above-average employment growth in 2023, adding 183,000 net new jobs, a 2.4% increase. Ontario’s unemployment rate rose modestly to 5.7% in 2023 but remained low compared to historic averages.

The government plan retains the path to balance despite these fiscal deterioration pressures relative to the 2023 budget and the outlook in the fall 2023 economic outlook and fiscal review. While slower projected growth in 2024 and other factors beyond the province’s control are key drivers of the deterioration, the government is continuing to invest in key public services and not raising taxes or fees to increase revenues, at a time when it’s important to keep costs down for people and for businesses.

In 2023-24, Ontario is projecting a deficit of $3.0 billion, this year. Over the medium term, the deficit will increase to $9.8 billion in 2024-25 and $4.6 billion in 2025-26, before a surplus of half a billion dollars in 2026-27.

The government will continue to support people and businesses in Ontario and make prudent and targeted investments, as I noted.

Looking at some of the economic assumptions: GDP grew by 1.2% in 2023—stronger than projected in the last year’s budget. Nominal GDP growth is expected at 4.1%, higher than the 2.8% projected in the last year’s budget. The outlook has been revised compared to the projections in the 2023 budget. Key changes since then include stronger estimated real and nominal GDP growth in 2023, but slower real and nominal GDP growth in 2024 and 2026, with most of the deterioration this year.

I say all these things because at the end of the day, budgets are about choices. As I noted and as the minister noted in his remarks, faced with these challenges that are evident all over the world, the government could have reduced spending to keep its budget in check, or increased taxes, and we did not do those things. In fact, we kept our spending profile very, very strong and infrastructure spending, which I’ll talk about in a short time, very, very strong. So those are the choices that we have made. It’s the right, balanced choice. And we will get to balance in the years ahead, so we’re looking forward to that.

Some of the measures that are used to determine what makes a prudent plan for governments are measures like, “How big is the debt-to-GDP ratio?” The goal is to treat it below 40%. Well, we’re doing that. Right through this piece, it never goes above 40%—38.4% this year, 2023-24; 38.0% in 2023-24 in the final number; and in 2024-25, 39.2%, so below that 40% threshold. That’s very important.

The other thing that’s important is, the government has done a very good job in its borrowing program. Even though interest rates have gone up, they’ve done more long-term borrowing, and so interest costs are actually down compared to what was expected in the last year’s budget. We’re going to pay $12.8 billion in interest costs in 2023-24; $13.9 billion in 2024-25; and $14.7 billion in 2025-26. Those are down from the forecasts of $14.1 billion, $14.4 billion and $15.1 billion. So I give the government full credit for having the forecast and the propensity to extend its borrowing program so that there is less volatility in the borrowing program—very, very prudent and very, very well done.

The overall fiscal plan: I mentioned the deficit numbers. The other thing that I find is very strong about this budget and the government’s approach is that we’re showing the benefits of the economic development that’s happening in Ontario. Overall revenues, which were $192 billion in 2022-23, are rising to over $200 billion this year—$205 billion—without any new taxes. Government revenue will go up, and there’s always a tension there—“Hey, you’re taking too much from my pocket”—but it’s so important. That shows the underlying strength of the Ontario economy. That’s what it’s based on. It’s the underlying economic strength that’s generating these revenues—whether it’s for corporations, personal taxes or other elements that are behind it—not tax increases. That’s very, very important.

At the same time, our program spending has continued its very substantial and solid growth. Let’s look at some of the sectors. Health care: $75.1 billion in 2022-23; up to $85 billion this year, 2024-25—a $10-billion increase in health care funding. That is so fundamental to what we’re doing. I’ll talk about the infrastructure shortly and all the other measures. But that’s a great measure of the priorities that our government is placing on health care.

Education: $33.6 billion to $37.6 billion in that same period—a substantial increase in spending. Post-secondary, children, community and social services—on and on and on. This government is treating these areas—continues to treat them—as a key priority and is able to accommodate those very substantial spending increases in our economic plan. It ultimately leads to a balanced budget in the out years.

These are the choices that we have made—maintain our support for these key programs; maintain the priorities for the people of Ontario; have a balanced and prudent approach in, frankly, a difficult economic environment. That’s the basis on which this budget has been done, and I’m very pleased with the approach that has been taken.

I want to now talk about infrastructure and our government’s plan to build. This is an area where, again, I am very, very encouraged by the approach we’ve taken. Normally, governments will make decisions as far as they can see towards the next election—“Hey, let’s just do what we need to do to get re-elected.” Well, that’s not the approach we’ve taken. We were going a full decade out, 10 years out, with $190 billion of investment in infrastructure over the next 10 years—a huge, huge number. More importantly, this year, it’s $26.2 billion in the next 12 months; that’s over $2 billion per month in infrastructure spending in the province of Ontario—massive numbers. These are also investments that aren’t going to be there just for tomorrow, next year and when they’re built. These are legacy, generational investments that are needed. And whether it’s in health care or transportation or transit, they’re so, so important to the economy and to our province.

Let’s look first at transit: over the next 10 years, $67.5 billion in transit—just massive, massive numbers.

With GO Transit, we’re transforming the GO rail network to improve access and convenience across the greater Golden Horseshoe by increasing two-way service; making investments to extend GO Transit rail service to Bowmanville; extending the Hazel McCallion light rail transit line; expanding service to the Milton GO line by adding train trips there; increasing frequency between Union and Niagara; more express service between Hamilton, Burlington, Toronto—on and on and on. These are fundamental and such important investments in our transit community.

Let’s look at subways. One of the great things that this government did early in its mandate was upload construction of subways. I was on the board of—