OSPE Engineers Dissect Ontario Budget 2019

On April 11, Ontario’s Minister of Finance Victor Fedeli released Ontario Budget 2019 – Protecting What Matters Most. The Ontario Society of Professional Engineers was invited as a key stakeholder to be part of the budget briefing.

Ontario Budget 2019 builds on the foundation of four pillars:

  • Restoring Fiscal Balance in a Responsible and Sustainable Manner
  • Putting People First by Protecting Health Care and Education
  • Making Life More Affordable
  • Making Ontario Open for Business and Open for Jobs by Lowering Business Costs

The Government of Ontario’s deficit for the past fiscal year is reported to be $11.7 billion. This deficit is projected to be reduced to $10.3 billion by the 2019-2020 fiscal year, and to be balanced in 5 years. The government has also committed to lowering Ontario’s net debt by the 2022-2023 fiscal year to less than the 40.8 per cent of GDP in 2018.

Finance Minister Vic Fedeli highlighted that the government is “taking steps to attract businesses, create jobs and provide opportunities for our emerging engineers, nurses and tradespeople.”

Environment


Ontario Budget 2019 saw $352 million in cuts to spending on the environment. The budget highlights the development of the government’s Preserving and Protecting Our Environment for Future Generations: A Made in Ontario Environment Plan, which was released in November 2018.

Most environmental organizations throughout Ontario are disappointed to the cuts in this portfolio.

Greenpeace Canada characterized this announcement as “the most anti-environmental budget in Ontario since the deadly tainted-water disaster in Walkerton.”

Addressing Climate Change

Ontario Budget 2019 emphasizes the continued opposition towards the implementation of a carbon pricing mechanism. The government of Ontario continues to use taxpayer dollars to finance legal battles, challenging the constitutionality of the federal carbon tax at both the Saskatchewan and Ontario Court of Appeal.

OSPE believes that carbon pricing is an essential first step to a comprehensive climate change policy, and provided a more detailed response to the 2019 Made in Ontario Environment Plan which can be found here on OSPE’s Society Notes Blog.

Infrastructure


Ontario Budget 2019 commits to $11.2 billion to support the four following projects:

  1. Yonge North Subway Extension
  2. Scarborough Subway Extension
  3. Eglinton Crosstown West Extension
  4. Ontario Line (a new subway that aims to be a more functional version of the downtown relief line)

The government of Ontario is also moving forward with a private sector partnership to optimize the use of government-owned land and increase transit ridership, with a full upload of the TTC subway network to provincial government.

OSPE commends the government’s continued approach to invest in infrastructure, which includes public transit and infrastructure that supports trade and transportation. OSPE agrees that funding infrastructure projects is a beneficial, long-term investment. However, given that funding is finite, OSPE believes money must be spent wisely and hard decisions need to be made in terms of which infrastructure projects get approved. OSPE stresses to all levels of government that key decisions on infrastructure should be evidence-based and made in consultation with infrastructure experts, including engineers.

OSPE believes that Ontario should develop a transparent framework that informs how infrastructure projects will be prioritized, sequenced, and funded, including the mechanisms and models for funding. Ideally, this framework would be jointly developed by all levels of government, industry participants, community organizations, and other interested parties.

Mehemed Delibasic, P.Eng., OSPE Infrastructure Task Force Chair emphasizes the fact that “this framework would ensure that Ontario does not over-promise and under-deliver on infrastructure projects and improve community, industry, labour market, and government planning to meet the needs of our growing provincial population and economy.”

Engineers are key to the effective design and development of virtually all aspects of infrastructure and should be placed at the forefront of those who determine where funds should go so projects get done.

Energy


Improving Electricity Programs and Reforming Industrial Electricity Pricing

Ontario Budget 2019 commits to making electricity bills more transparent and to lowering electricity costs for residential, industrial, farm and small business customers.

The government understands the challenges to Ontario businesses caused by the high cost of electricity, affecting the ability of industrial businesses to compete globally.

The government has launched a stakeholder consultation period on industrial electricity pricing, including a review of existing pricing programs. OSPE will take this opportunity to highlight the findings and recommendations of our most recent Retail Electricity Price Reform report during this consultation process.

Paul Acchione, P.Eng,. and member of OSPE’s Energy Task Force applauds this consultation process and highlights how “OSPE looks forward to working with the Ontario government to develop new solutions to Ontario’s energy challenges. Reliable, affordable and clean energy is a key enabler of a prosperous modern society.  Engineers are key to finding solutions to those challenges.”

Modernization of the Ontario Energy Board (OEB)

Informed by the OEB Modernization Review Panel’s report, the government will modernize the OEB and will take steps to reduce costs and regulatory burden, promote regulatory excellence, and improve organizational governance and independence of the OEB.

Emily Thorn Corthay, P.Eng., OSPE Board Director and Energy Task Force Chair “commends the government for its initiative to modernize the OEB and for industry stakeholder consultations for industrial electricity pricing. OSPE recommends reforms to retail electricity pricing as well, which will reduce energy costs for homeowners and small & medium businesses, while at the same time reducing greenhouse gas emissions.”

Developing the Ring of Fire and Creating a Mining Working Group

Earlier this year, the government announced the creation of a special Mining Group focused on reducing red tape and attracting new investments. OSPE is thrilled to note that several professional engineers and engineering graduates are part of Ontario’s Mining Working Group. OSPE believes it is important that the government gather industry experts and develop concrete steps for identifying opportunities for growth, competitiveness and prosperity in the mining sector. OSPE has consistently advocated that this group must include members of the engineering community.

Housing


Ontario Budget 2019 acknowledges that housing is one of the largest costs facing Ontario families, which have risen across most areas of Ontario in the last several years. According to the Canada Housing and Mortgage Corporation, average rents in Ontario increased 3.8 per cent in 2017 and 4.8 per cent in 2018, well above the pace of growth in people’s earnings.

Ontario’s Housing Supply Action Plan, along with its new Community Housing Renewal Strategy, seek to make it easier and faster to build housing, to boost housing supply and make housing more affordable.

Emidio DiPalo, President of the Durham Region Home Builders’ Association applauds The Housing Supply Action Plan “as it is an opportunity to streamline and get rid of red tape.”

The Community Housing Renewal Strategy will focus on supporting individuals and families who have difficulty finding stable affordable housing:

  • Protecting and expanding affordable housing by creating incentives for community housing providers
  • Simplifying rent geared to income calculations to reduce the administrative burden and improve processes for tenants
  • Streamlining and updating waitlist and eligibility rules to better match applicants for social housing with solutions that meet their needs
  • Addressing community safety concerns especially for the most vulnerable, including seniors and children

Ontario is also committed to supporting affordable housing through the National Housing Strategy, which is a bilateral agreement between the federal and Ontario governments.

Education


Tuition and Funding

Ontario Budget 2019 highlights the need to strengthen Ontario’s education system, with particular emphasis on math, science and financial literacy, as well as skilled trades, so as to support future scientists, engineers, doctors and tradespeople.

The budget confirmed the changes to tuition, ancillary fees and OSAP announced earlier this year. This budget also includes changes to the college and university funding formulas. These changes will see the amount of outcomes-based funding for institutions increase from 1.4% in 2018-2019 to 60% in 2024-2025.

Reforming Apprenticeships and Supporting the Skilled Trades

The government’s plan to improve Ontario’s skilled trades and apprenticeship systems will be implemented through the following initiatives:

  1. Establishing a new governance framework through proposed new legislation to replace the Ontario Colleges of Trades and Apprenticeship Act, 2009
  2. Encouraging employer participation in the apprenticeship system through a new financial incentive program to support employers to come together and train apprentices
  3. Modernizing service delivery in apprenticeship
  4. Promoting apprenticeship and the skilled trades as a pathway choice for all students from kindergarten to Grade 12

Rakesh Naidu, president and CEO of the Windsor-Essex Regional Chamber of Commerce, qualified these initiatives as “all good steps in the right direction that will really help us transform our workforce and deal with the skills mismatch we have currently.”

OSPE also commends the focus on an integrated, multi-phased approach that tries to equip more people with the skills needed to get quality jobs through apprenticeships.

Helping Employers Attract Skilled Workers

The province is making enhancements to the Ontario Immigrant Nominee Program (OINP) in order to maximize the benefits of skilled immigration to the economy. The government will:

  • Begin a pilot initiative with selected communities to explore innovative approaches to bring highly skilled immigrants to smaller communities
  • Create a dedicated stream to help Ontario’s technology sector attract highly skilled employees

Expanding the Northern Ontario Internship Program

The new program will remove the requirement that internship applicants be recent university or college students. Program candidates will now include new entrants into the workforce, those transitioning to a new career, and those underemployed and unemployed.

OSPE commends the changes made to this program since it will remove barriers to both northern and indigenous communities, and all those who wish to advance their career.

Research and Innovation


The Ministry of Economic Development, Job Creation and Trade will modernize its programs by assessing their relevance in driving economic growth in areas of investment attraction, research and commercialization, entrepreneurship and talent.

The government will also create an expert panel on a provincial intellectual property framework that maximizes commercialization opportunities specifically related to the post-secondary education sector. This panel will potentially include representation from the post-secondary, industry, innovation, venture capital and investment, banking and finance sectors, as well as from medical research and intellectual property legal expertise.

OSPE welcomes these reforms. At the heart of innovation is investment in research and development, which allows researchers, scientists, and engineers to uncover new knowledge, techniques and technologies.

What did you think of Ontario Budget 2019? How will it impact you as an engineer and Ontarian?

This Post Has 2 Comments

  1. From a cursory look at the data it appears the Canadian federal government carbon strategy will have no significant effect on global emissions. At best a 0.5% reduction globally. On an annual basis it would give a little over one and a half days respite before reaching a specific concentration of CO2 in the atmosphere.

    For me there is in addition an ethical problem with selling licenses to pollute. The burden falls disproportionately on those with lower incomes.

    The OSPE should be supporting development of strategies that will actually have a significant effect on global greenhouse gas emissions. Perhaps a progressive environmental tax with proceeds devoted to development of technologies to avert global warming.

    1. Hi Ross. Thanks for taking the time to comment and start an important discussion. Paul Acchione, P. Eng., FCAE, one of OSPE’s subject matter experts reviewed your concerns and offers the following observations.

      It is true that Canada is a very small contributor to total carbon dioxide (CO2) emissions globally but on a per capita basis Canadians are one of the highest CO2 emitters. If Canada wants to show leadership in climate change mitigation it needs to carry its fair share of the burden to reduce CO2 emissions.

      How we do that is critically important because Canada derives a significant amount of its GDP from trade. If we get too far ahead of our trading partners in applying carbon pricing we undermine our competitiveness in trading zones where we are members (NAFTA/USMCA, TPP, CETA, WTO). OSPE is advocating with the Ontario government to focus initially on low hanging fruit that allows us to reduce emissions without imposing undue hardship on trade exposed businesses or on consumers’ disposable income. That is one reason why OSPE published a report titled “Retail Electricity Rate Reform – Path to Lower Energy Bills and Economy-Wide CO2 Emission Reductions”. Finding opportunities to lower emissions and also reduce energy bills is key to getting public acceptance to rapidly reduce emissions.

      For carbon pricing to be effective, consumers need to have a cleaner energy option once the carbon tax is applied. If they do not have a cleaner economic choice they will see the carbon price as a tax. The public, especially low income residents, will resent paying an unavoidable tax and demonstrate to stop it or repeal it. We can see that in various places around the world, sometimes as violent protests.

      Carbon pricing is only one of a set of policy tools. There are other tools at our disposal. Retail electricity price reform is another tool that is made possible by Ontario’s very low emitting electricity system.

      Here in Ontario, for some fuels like fuel oil, gasoline and diesel there are now economic alternatives to use cleaner energy options like electricity or natural gas, albeit at higher up-front costs. Over the life cycle of the product (car, furnace, water heater, etc.) the reduced maintenance and energy costs from using cleaner energy sources will eventually pay for the higher up-front costs.

      Some fuels like natural gas are currently at too low in price in North America for carbon pricing to be effective at the currently planned level of up to $50/tonne CO2. However, OSPE’s proposed retail electricity rate reform will make clean “surplus” electricity an economic alternative to using natural gas.

      OSPE believes Ontario and Canada can achieve their environmental and economic goals if those governments work more closely with engineers to find more special situations like the one described above. By doing so we can meet our obligations to the global community and demonstrate our leadership. That would also be good for business because other countries would come knocking at our door for those solutions. The improved economic activity will help improve the disposable income of all residents.

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