Ontario Budget 2021- What Engineers need to know

On March 24, Ontario’s Minister of Finance and President of the Treasury Board, Peter Bethlenfalvy released the Ontario Budget 2021 “Ontario’s Action Plan: Protecting People’s Health and Our Economy.

The Ontario Society of Professional Engineers (OSPE) was invited as a key stakeholder to be part of the consultation process undertaken by the government prior to the release of the budget.

Ontario Budget 2021 builds on the foundation of two pillars:

  1. ontario 2021 budget
    Ontario Finance Minister, Peter Bethlenfalvy and Ontario Premier, Doug Ford, arrive at the Ontario Legislature to deliver the 2021 Ontario Budget Photo: THE CANADIAN PRESS/Frank Gunn

    Protecting People’s Health

  2. Protecting our Economy

The Government of Ontario is projecting a deficit of $33.1 billion for 2021-22. Over the medium term, the government is forecasting deficits of $27.7 billion in 2022–23 and $20.2 billion in 2023–24. However, the province is not projected to return to a pre‐COVID‐19 deficit until 2027–28 under its planning projection.

While Ontario’s current levels of spending are critical to get through the pandemic, the government recognizes that this is unsustainable over the long term, thus the focus on building a foundation for recovery fuelled by economic growth. Ontario’s net debt‐to‐GDP for 2021–22 is projected to be 48.8 per cent and is projected to grow to 50.2 per cent by 2023–24.  

Ontario’s real gross domestic product (GDP) increased 9.4 per cent in the third quarter, but it remained below the level of the fourth quarter in 2019. Ontario’s real GDP is estimated to have declined by 5.7 per cent in 2020. Between May 2020 and February 2021, Ontario employment has risen by 829,400 net jobs but remained 305,300 (‐4.1 per cent) below its pre‐pandemic level. 

OSPE has identified the following areas of Budget 2021 that are of most interest to our membership:

Budget 2021 is:

  • Committing to vaccinate every person in the province who wants to be vaccinated, by making $1 billion available for a provincewide vaccination plan.
  • Making it safer to re‐engage with our workplaces, businesses, and communities with $2.3 billion for testing and contact tracing.
  • Investing $1.4 billion for personal protective equipment, including more than 315 million masks and more than 1.2 billion gloves.
  • Investing $1.8 billion in 2021–22 to continue providing care for COVID‐19 patients, address surgical backlogs and keep pace with patient needs.
  • Investing $4.9 billion over four years to increase the average direct daily care to four hours a day in long‐term care and hiring more than 27,000 new positions, including personal support workers (PSWs) and nurses.
  • Providing additional funding of $175 million in 2021–22 as part of the historic investment of $3.8 billion over 10 years in mental health.
  • Providing free occupational health and safety training for health and safety representatives in up to 60,000 small businesses by investing $3.5 million annually over a three‐year period, focused on helping to lower injury rates and improve health and safety awareness and practices in small businesses.
  • Renewing the occupational health and safety strategy for 2021 to 2026 to improve health and safety in workplaces, prevent workplace injuries, illnesses, and fatalities in the medium and long term.

IMPACT: The engineering community has been severely impacted by this pandemic, as thousands of engineering jobs are directly linked to manufacturing, technology, infrastructure and research and innovation sectors. OSPE is pleased to see that this budget seeks to address some of the major concerns our members and all Ontarians face daily as a result of COVID-19. We are pleased to see a renewed focus and investment on health and safety in workplaces as business owners deal with keeping staff protected now and following the height of the pandemic.

Accelerating Ontario’s Broadband and Cellular Action Plan

  • The 2021 Budget commits a historic new investment of $2.8 billion in broadband infrastructure to ensure that every region in the province has access to reliable broadband services by 2025.
  • This investment builds on the Up to Speed: Ontario’s Broadband and Cellular Action Plan announced in 2019, to invest $315 million over five years to improve broadband connectivity in underserved and unserved communities, with a goal of increasing access for up to 220,000 households and businesses.

Demonstrating Progress on New Subway Projects

  • The government reiterated their previous commitments from their 2019 and 2020 Budgets. Some updates highlighted include:
    • In December 2020, it issued two Requests for Proposals (RFPs) to design, build, finance, operate and maintain the Ontario Line. The contracts are expected to be awarded in 2022.
    • In August 2020, it issued two RFPs to advance tunnelling work on the Scarborough Subway Extension and the predominantly underground Eglinton Crosstown West Extension projects. The contracts are expected to be awarded in 2021. Progress continues on early works including utility relocations.
    • In March 2021, the province released the Initial Business Case for the Yonge North Subway Extension. Ontario is leveraging previous planning, design and environmental assessment work completed to move this project forward as quickly as possible.

Investing in Highways

  • Ontario has allocated more than $21 billion in funding over the next 10 years, including about $2.6 billion in 2021–22, to expand and repair highways and bridges.  

IMPACT:  OSPE commends the government’s continued approach to invest in infrastructure, which includes public transit, Information Technology (IT), 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 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.

Engineers believe that the COVID-19 pandemic provides an opportunity to invest in infrastructure as a key method that will drive economic growth in Ontario. However, mistakes of the past should not be repeated. Infrastructure projects should:

  1. Not only be “shovel-ready” but also “shovel-worthy”: to ensure preparedness for future events and build an economy that is strong and benefits all people, it is imperative that new funding allocations provide a sustainable benefit for diverse, future generations by ensuring a targeted focus on building sustainability. OSPE believes that prioritized investment in sustainable infrastructure will help alleviate the economic burden the province is facing, while decreasing unemployment rates in several critical sectors of the economy.
  2. Make use of a Qualifications Based Selection (QBS) framework: given Ontario’s current economic and fiscal situation, it is essential that all public infrastructure investments be transparent and return the greatest possible value for money. By adopting Qualifications-Based Selection (QBS) as its best practice for the selection of consultants, the government can realize the greatest possible value for investment in its infrastructure projects. QBS is the smartest tool to ensure post-COVID-19 economic recovery throughout Ontario. READ MORE HERE
  3. Effectively report life-cycle costing: it is essential that all infrastructure projects conducted by the province properly report and consider life-cycle costing. To gain the maximum value for money, all costs incurred over the whole life span of infrastructure projects must be estimated. This will ensure that taxpayer’s money is used for infrastructure projects that are able to produce multigenerational benefits for most Ontarians at a proper cost.
  4. Consider diversity and inclusion: the provincial government should implement supply chain diversity policies. This will enable the province to use procurement to advance equity, diversity, and inclusion.

Keeping Schools Safe- Improving Ventilation and Air Quality in Schools

  • Through the federal Safe Return to Class Fund, Ontario is committing investments of $50 million for High Efficiency Particulate Air (HEPA) filters and other immediate measures to optimize air quality and ventilation.

IMPACT: OSPE believes the need for proper ventilation to stop the spread of infected aerosol particles is not being properly addressed through this previous announcement.

“Ontario engineers are concerned about the health and well-being of students, and the lack of attention to air quality by the provincial government,” said Sandro Perruzza, CEO of OSPE. “While investments like the Ontario Together Fund to develop new technologies are welcome, we need a transparent plan to prioritize and conduct upgrades to heating, ventilation and air conditioning (HVAC) systems in schools now.”

OSPE is calling on the Ontario government to take the following immediate actions: 

  1. Determine which schools require priority HVAC systems assessments
  2. Commit more funding to ventilation improvements
  3. Hire professional engineers to do this work now

OSPE’s President & Chair, Réjeanne Aimey, P.Eng., says government must take steps now to prevent future outbreaks. “As engineers, we have always known there is a connection between ventilation systems and our health, but it has taken a global pandemic to shine light on this issue. We are urging government to properly invest in protecting our children – allocating $50 million of federal support is inadequate,”she said.

Leading in Electrical Vehicle Development

  • Recent proposed investments in Ontario’s auto sector totalling up to $4.3 billion will help the province become a global leader in EV manufacturing. These proposed investments include retooling the Ford Oakville Assembly Complex for battery electric vehicle production, Stellantis (previously Fiat Chrysler Automobiles) assembly of plug‐in hybrid vehicles and battery electric vehicles in Windsor, and General Motors creating Canada’s first large‐scale commercial electric vehicle manufacturing plant at its Ingersoll facility.
  • Ontario is investing $56.4 million over the next four years to create the new Ontario Vehicle Innovation Network.

IMPACT:  As Ontario historically has been a leader in automotive manufacturing, OSPE is pleased that the government is recognizing the importance of investing in electric vehicles (EVs). However, although this is a positive first step, OSPE believes that more can be done. The Ontario government cancelled the EV incentive program, which resulted in a 53 per cent decrease of EV purchases in the first half of 2019. Ontario is the only province in Canada not experiencing an increase in EV sales. With the current pandemic, the government has the opportunity of rectifying this decision, and supporting a clean growing sector right here in our province.

Some of the uptake barriers encountered with EVs, such as a shorter range, longer recharge times, and a higher upfront cost can be addressed by smart government action. Some jurisdictions, like California, have committed to achieving a “tipping point” of electric vehicle adoption by enacting EV sale mandates requiring automakers to sell a specified number of EVs per year, as a percentage of sales. In Quebec, such action has resulted in a 131 per cent increase in one year.

To ensure Ontario accelerates the electrification of its transportation system, the province should:

  1. Work with the federal and municipal governments to allocate specific resources to the electrification of the public transportation system.
  2. Develop and implement an incentive program for electric vehicles, until mass adoption “tipping point” is achieved.
  3. Enact an EV sales mandate like the ones established in Quebec and California, requiring automakers to sell a minimum percentage of electric vehicles.
  4. Permit free or discounted access for EVs to all tolled highways in Ontario.
  5. Establish a robust network of electric vehicle charging stations across Ontario.
  6. Amend the Building Code to ensure that there is a minimum percentage of electric vehicle supply equipment (EVSE) in residential and non-residential buildings, including condo and apartment buildings.

Supporting a Greener Economy

  • OSPE is disappointed to see that Budget 2021 does not properly address one of society’s biggest concerns: climate change and the need for a greener economy, which includes the energy efficiency and building sectors.

IMPACT: As Ontario and Canada transition towards a low-carbon future, the energy efficiency and building sectors will be at the forefront of change. To accelerate this, we need to strengthen the capacity of the existing workforce and attract more people to work in these sectors, especially engineers. OSPE, as a member of The Workforce 2030 coalition, knows that as a proven cornerstone of economic recovery, the building industry can mobilize shovel-worthy projects to generate good jobs that create safe, healthy, and comfortable places for Ontarians to live and work. Ontario needs a robust workforce to meet building sector demand.

The Ontario government must address labour market gaps and urgently invest in worker upskilling and re-employment for energy-efficient building retrofits and new low-carbon construction. Without this investment, Ontario risks losing its competitive advantage in a global context that is rapidly and irrefutably transitioning to a low-carbon economy. We strongly believe that a recovery fueled by economic growth and climate action can go hand in hand. Government stimulus towards building to low-carbon standards – both new construction and retrofits – could create over 600,000 new jobs in Ontario and help reach Canada’s climate targets by 2030.

Protecting Communities from Flooding

  • Through its Protecting People and Property: Ontario’s Flooding Strategy, the government is moving forward with a range of activities, such as improving floodplain mapping guidance and establishing a flood‐mapping technical team to better identify hazard areas.
  • The province is also providing ongoing support for municipalities through the Ontario Community Infrastructure Fund, which helps small, rural, and northern communities invest in local infrastructure and asset management planning to address their priority needs, including flood protection and climate adaptation.

IMPACT: OSPE is pleased that Ontario has committed to do more to fight flooding in the province. OSPE has been calling on the government to update the province’s flood mapping program and ensure it recognizes new technology and approaches for flood hazards. This should be updated and reviewed frequently. Such mapping should inform the creation of “municipal/communal flooding briefs” that identify and analyze the following flood risk factors.

Advancing Ontario’s Clean Energy Advantage

  • The government is keeping its electricity plan, which was released in its 2020 Budget. In this plan:
    • The government is focused on trying to provide greater customer choice for families, small businesses and farms who pay time-of-use (TOU)electricity rates. As of November 1, 2020, these consumers can choose a rate plan that best suits their household and lifestyle, with the option of either TOU or tiered pricing. Tiered pricing provides a set rate for electricity up to a certain level of consumption regardless of the time of day it is consumed. 
    • Since January 1, 2021, a portion estimated at approximately 85 per cent wind, solar and bioenergy contracts, entered under the previous government, will be funded by the Province, not ratepayers. The government claims that removing these costs from electricity bills will result in medium size and larger industrial and commercial employers saving about 14 and 16 per cent respectively, on average.

IMPACT: Giving consumers the choice to switch to tiered rates may have three negative impacts.  If consumers who switch to the Tiered Price Plan begin to use more of their electricity during peak hours, the power system will need more peaking capacity. That peaking capacity is likely to be fueled in part by natural gas which emits carbon dioxide. We could also have more surplus clean electricity at night that may be discarded. Those impacts will cause the price of electricity and emissions to rise.

OSPE recommended to the Ontario government in April 2019 that a better option is to have people volunteer for an optional price plan that allows them to get surplus clean electricity that is available between midnight and 6 .a.m. at very low prices. That electricity is sold to New York, Michigan and Quebec at prices under 1 cent/kWh. OSPE believes it would be better if we had a voluntary special TOU price plan that provided a  fourth price period at the very low export rate from midnight to 6 a.m. Ontario consumers could then use that cheap and clean electricity to charge their electric vehicles and displace some of their fossil fuels used for hot water and space heating by purchasing a duel electric-fossil fuel furnace with a smart controller to use clean electricity for heating when available. In addition, industry could use that clean surplus electricity at those low prices to make low-cost clean hydrogen for industrial use, or to power the new fuel cell vehicles that will be introduced in Ontario in the near future. Ontario consumers would then benefit from lower fossil fuel bills and lower emissions.

Réjeanne Aimey, P.Eng., President and Chair of OSPE reiterated that “Re-allocating surplus electricity by way of price reform is the next step in Ontario’s advancement, and engineers are equipped with the innovation and scientific skills to accomplish this.”

Therefore, OSPE still cautions the public to make sure they do not ask to switch to the Tiered Price Plan before they have checked to make sure their bill will not rise after the switch. For more information read our detailed analysis of this policy decision HERE.  

OSPE will also continue to monitor this file and keep advocating for lower electricity prices for all Ontarians, not only businesses.

Supporting Junior Mining Exploration

  • To support junior mining companies, Ontario is investing $5 million over the next two years in the new Ontario Junior Exploration Program. Through the program, junior mining companies can apply for funding to cover eligible costs of up to $200,000 per mineral exploration or development project.

Advancing Critical Minerals Development in Ontario 

  • Budget 2021 highlighted the government’s upcoming development of its first ever Critical Minerals Strategy. The discussion paper is focused on five areas:
    • Supporting partnership opportunities with Indigenous peoples
    • Finalizing an Ontario critical minerals list
    • Enhancing investment in mineral exploration and development
    • Regulatory and policy reform
    • Supply chain and manufacturing opportunities

 IMPACT: OSPE is pleased to see the government moving forward with the development of this strategy. Engineers understand that the global shift to a knowledge-based, low-carbon economy is increasing demand for raw materials. Mining is one of the economic backbones of the Ontario economy and is especially important to northern Ontario. The materials and products delivered help Ontarians stay safe, meet basic needs, and sustain northern communities. This industry produces around $10 billion in revenues for Ontario per year and employs over 75,000 Ontarians. Mining is also the largest private sector employer of Indigenous Ontarians.

Additionally, the Ring of Fire region of northern Ontario is an immense and untapped economic opportunity. Research done by the Ontario Chamber of Commerce suggests that in the first 30 years of its development, this region could generate more than $25 billion in economic activity across several different sectors in Ontario, including mining, financial services, retail trade, manufacturing, and utilities.

The development of this region will also provide enormous long-term benefits to northern communities through increased economic activity and job creation. To realize the full economic potential of the Ring of Fire, the government must prioritize key investments in core infrastructure, as well as ways to address the needs of the labour market.

OSPE also believes that it is very important that the government ensures resource development is sustainable, by establishing guidelines and frameworks that ensure corporations respect economic, environmental, and social needs of the communities. These projects must also ensure Indigenous peoples are full partners in the development of the Ring of Fire, where consultations with Indigenous communities begin at the planning stage and continue throughout the mining exploration stages. 

Attracting Business Investment through Invest Ontario

  • As part of the 2021 Budget, the government is committing $400 million over four years to create the Invest Ontario Fund, which will support Invest Ontario and encourage investments in the key sectors of advanced manufacturing, technology and life sciences. To identify investments in high‐value projects, the agency will rely upon a sophisticated evaluation process to inform its assessments and project selections. The agency will provide expertise and responsive and customizable investor services to support investment opportunities, including available financial assistance, talent support, advisory supports and concierge services.

IMPACT: OSPE is pleased to see the Ontario government’s commitment to fuel investment in innovation across the province.

Promoting Ontario Manufacturers

  • Ontario is investing $1 million in 2021–22 to support enhancements to the Ontario Made program to reach more retailers and manufacturers, to encourage participation and build awareness and recognition among consumers of Ontario‐made products.

Protecting and Creating Jobs in the Automotive Sector

  • To maximize the impact of previous investments in the automotive sector across Ontario’s full automotive value chain, including a shift towards smart and clean technologies, Ontario is investing $56.4 million over the next four years to create the Ontario Vehicle Innovation Network (OVIN). The OVIN will build on successful elements of the Autonomous Vehicle Innovation Network (AVIN), accelerating the development of next generation electric, connected and autonomous vehicle and mobility technologies, as well as supporting Ontario’s role as the manufacturing hub of Canada. The OVIN will also encourage innovation and collaboration through partnerships between small and medium‐sized enterprises (SMEs), academia, the auto industry and battery sector, including critical minerals development in Ontario’s north.

IMPACT: OSPE commends the Ontario government for supporting local manufacturing and innovation. Supporting businesses in improving current manufacturing processes and methods, developing, and implementing digital technologies and focusing on developing more sustainable and energy-efficient products will help create resiliency in this sector and improve Ontario’s export potential.

  • Ontario is making a new $1.5 million investment to support the Special Implementation Team on Intellectual Property, which was established as a continuation of the work of the Expert Panel. This funding will help launch a web‐based IP curriculum, support the development of a centralized Ontario resource and create a robust IP policy that will help protect home‐grown ideas and prioritize the commercialization of IP‐related products to fuel Ontario’s innovation ecosystem. Ontario is working with universities, colleges and research institutes to clarify the commercialization mandates of postsecondary institutions, in order to ensure that IP generated through taxpayer‐funded research in the province’s world‐class postsecondary sector results in social and economic benefits for the people of Ontario. There is also work underway to develop accessible, basic and advanced IP curricula that is web‐based for researchers and businesses to enhance IP awareness and understanding.

IMPACT: We commend the government’s continued investments to Ontario’s Intellectual Property ecosystem. This will enable the province to ensure that the social and economic benefits of research and innovation are incentivized and retained within Ontario. Many engineers and engineering school graduates are either entrepreneurs involved in launching SMEs or otherwise associated with SMEs. OSPE is pleased to see that the government is focused on working with universities, colleges and research institutions to generate transparency and clarify mandates. We encourage the province to consult with industry, specifically SMEs in the innovation space. Further, we continue to ask that the government focuses on addressing three key barriers currently preventing all types of SMEs from pursuing the generation, protection, and commercialization of IP:

  • Limited access to IP professionals with practical expertise (patent agents or patent lawyers)
  • Lack of transparency and uniformity in the process to engage research institutions in IP development and commercialization
  • Cumbersome administrative requirements that impact the access for funding

  • To help workers get the training they need, the government is introducing the proposed Ontario Jobs Training Tax Credit. This would be a temporary, refundable Personal Income Tax credit that would deliver support for 2021. The credit would provide up to $2,000 in relief for 50 per cent of eligible expenses.  
  • Government is committing $85 million to support the Skills Development Fund to help training and employment organizations assist workers during the province’s economic recovery. The funded projects will give laid‐off workers immediate access to training supports or new jobs, improve the quality of training, support traditionally underrepresented groups, increase apprentice registrations and completion, better serve local communities and support the talent needs of small businesses.
  • $117.3 million to assist women, racialized individuals, Indigenous peoples, youth and people with disabilities who are facing the highest rates of unemployment during the pandemic. This funding will help remove barriers and offer training opportunities so they can get the in‐demand skills they need for good jobs and get connected with employers looking to grow their businesses.
  • $194 million to further support Ontario workers with additional employment and training programs and services that are responsive to the province’s economic recovery.
  • Ontario is also investing a total of $288.2 million in 2021–22 in its Skilled Trades Strategy

IMPACT: OSPE is pleased that the government understands the need to invest in training its workforce. We commend the focus on an integrated, multi-phased approach that equips more people with the skills needed to get quality jobs through apprenticeships. However, more should be done to ensure that engineers, and not only tradespeople have access to these opportunities. As engineers lead the design aspects of many projects across these sectors, without supporting engineers in upskilling and keeping up with evolving trends, it will be very difficult to innovate in the province. This inability to innovate within these sectors will mean a loss of opportunities for new job creation for both professionals and tradespeople.

Combatting Racism

Budget 2021 is:

  • Investing $1.6 million over two years to support the Anti-Racism and Anti-Hate Grant program. This funding will support community-based anti-racism initiatives focusing on anti-Black racism, anti-Indigenous racism, anti-Semitism, and Islamophobia. This grant program will be developed collaboratively with community partners across Ontario to ensure that it leads to the most effective solutions to fight racism and hate across the province. 

IMPACT: OSPE applauds the government for making an investment to support combatting racism against racialized and marginalized communities. As outlined in our pre-budget submission, OSPE believes that Ontario’s economic recovery will depend on the ability to attract and retain a diverse workforce. Ending racism is a core component of ensuring that Black, Indigenous, and other people of colour (BIPOC) and other underrepresented groups are provided with equal opportunities to enter and advance in professions such as engineering. The reality is that as it stands, BIPOC individuals continue to face numerous barriers within engineering spaces.

  • Ontario is also building more childcare spaces. The government has committed to creating up to 30,000 new childcare spaces, including up to 10,000 spaces in new schools. As of winter 2021, over 20,000 new spaces have been approved, which will support families and ensure a strong and accessible childcare system. Together, along with the proposed enhancement of the CARE tax credit, these investments help parents remain in or re‐enter the workforce by making childcare more accessible and affordable during this challenging period.

IMPACT: OSPE commends the government for investing in childcare which will inevitably reduce the burden of unpaid care on caregivers, many of whom are women. Research shows that female caregivers continue to face the brunt of responsibilities in Canadian homes. This has been cited as one of the reasons why  women are leaving the workforce at an alarming rate during the COVID-19 pandemic. Since women’s inclusion in the workforce began during the last century, caregiving responsibilities now impacts all professionals regardless of gender – including engineering graduates and engineers – limiting career progression. Investing in access to affordable and quality childcare is an important factor in determining the participation, attachment, and retention of professionals in the labour market.

For more on what we thought the Budget should focus on, read our 2021 Pre-Budget Submission

 What did you think of Ontario Budget 2021? How will it impact you as an engineer and Ontarian?

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