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Tuesday, January 18, 2022

Province to unveil mini-budget as inflation drives costs up

Author of the article:

Brian Lilley

Canadian currency Photo by Getty Images /Toronto Sun

The Ford government will unveil its fall economic statement on Nov. 4, a document that is now having to consider a sustained and steady rise in inflation.

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Finance Minister Peter Bethlenfalvy told reporters Wednesday that he is watching the increase in prices as he plots the province’s fiscal course.

“There’s a lot of volatility,” Bethlenfalvy added.

One issue that could hurt the province’s bottom line over the coming year is interest rate hikes. The province has been running high deficits during the pandemic, and a rise in interest rates could drive up borrowing costs across the board.

“The good news is that we are pretty good at borrowing in the capital markets. Our rates are very good,” Bethlenfalvy said when asked about the impact of a potential rate hike on the government books.

He acknowledged that inflation is hurting family budgets and the government will have an eye on affordability issues when it unveils its plan.

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“Inflation is very, very painful. So, I’m very mindful for those hard-working Ontarians. I’m also mindful of seniors who are on a fixed income,” the minister said.

Primarily though, the fall economic statement will focus on the pandemic and Ontario’s  economic recovery.

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“The work against COVID-19 is not over,” Bethlenfalvy told reporters. “So we will be very careful with this process.”

At the same time, the government is expected to start tipping its hand about spending promises that Ford will put before voters during this spring’s election campaign.

In the 2018 campaign, Ford promised to revive the Hwy. 413 project, which was shelved by the  Liberals.

So far, there have been no concrete spending promises on that front, but the promise of the new highway northwest of Toronto is making its way into election ads. Asked whether highway funding will be in the economic update, Bethlenfalvy noted population growth estimates for the GTA.

“You know, we’re going to have 1 million people by some estimates, every five years, and so by 2050, I mean, that’s I think about another 6 million people,” Bethlenfalvy said.

He added the government is focused on building infrastructure, including public transit and roads.

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Kaylie Pferten
A pilot of submersible crafts in a former life, now married to my husband David and writing about investment advice.

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