How the New Ontario Budget Will Affect Your Finances!

How the New Ontario Budget Will Affect Your Finances!

Ambitious is the most relevant adjective that can be used to describe Ontario’s new budget. Over the last few years, we’ve seen a bunch of stale budgets that haven’t offered much, but this trend has been smashed. This year, we see the introduction of free post-secondary education for select households, the introduction of a cap-and-trade emissions policy and more. This is how these new policies will affect your personal finances.

Before we start, it’s important to add that the majority of these listed policies have not been passed into legislation yet and details are subject to change.

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Free Tuition

Students are the clear winners with the possibility of receiving free tuition and other beneficial services. Many news outlets repeated the belief that tuition is just free for households that earn under $50,000, but this is only part of the story. Instead, many households that earn approximately $80,000 and under will receive payments that meet or even EXCEED the average university tuition cost and households that earn over $80,000 will qualify for smaller tuition grant that cover a portion of these costs. Any extra funds can be used for ancillary educational costs, such as paying for text-books, accommodations, and more.

budget financial literacy budget Friendly Financial Coach Bank Account Help Toronto Retirement education Matthew Siwiec

Source: Ontario Budget

Additional support is also being extended to mature and married students. Previously, students that were out of high school for several years did not qualify for many educational grants. This policy will be phased out and other changes to assist mature students will be enacted.

The government is also increasing educational planning and support tools. These tools will help guide students and predict educational costs. There is also a big push to offer online college and university courses through eCampus Ontario, which is planned to offer more than 13,000 courses and 600 programs online.

To partly fund this new government grant, all other student tuition rebates and educational tax credit will be eliminated. Any difference in funding will mainly come from income taxes and corporate taxes. The new grant will begin during the 2017-18 school year.



Another big change is the introduction of a cap and trade policy, covering approximately 82% of all green house gas (GHG) emissions in Ontario. The government sets an annual emissions limit for the GHG emitters and those emitters must buy credits for any emissions that exceed these limits. Emisson limits will decrease every year in an effort to meet provincial targets.

Any revenue generated from this market will be reinvested in into “green” initiatives. These investments include innovations, public transit, transportation and more. However, what classifies as green is likely up for a lot of future debate.

budget financial literacy budget Friendly Financial Coach Bank Account Help Toronto Retirement education Matthew Siwiec

Source: Ontario Budget

The cost of this policy is going to impact consumers in many ways. The price of gas is estimated to increase by 4.3 cents a litre and gas heating expenses will increase by 3.3 cents per cubic metre (about $5 extra per average household). However, you will save $2 on your average monthly electric bill and low-income families have access to government programs to reduce costs. However, we can expect out overall annual energy costs to increase.

budget financial literacy budget Friendly Financial Coach Bank Account Help Toronto Retirement education Matthew Siwiec

Source: Ontario Budget


Infrastructure Spending

Over the last few years we’ve seen a big push for infrastructure spending from all levels of government. This year is no different; we see a pledge to spend $137 billion over ten years into transportation, schooling and other projects.

The biggest investment push is into public transit and highways, with an emphasis on strengthening regional transportation. Public transit projects are planned for high population centres, such as in Mississauga, Hamilton and Toronto.

One of the biggest projects is the “Regional Express Rail”, this is a $13.5 billion GOtransit investment that’s expected to modernize the rail system and increase service levels. In Toronto, we see the continued investment into the Eglington Light-Rail system and the Finch West LRT.

We’ll also see many widening of highways and the introduction of high-occupancy toll lanes. These new toll lanes allow either vehicles with multiple passengers or those that pay a fee.

The government will also invest $11 billion to invest in new schools and improvements. There is also a goal to facilitate the creation of 4,000 new licensed childcare spots.


Medicine and Health Care

Another controversial part of the budget are the changes to seniors’ prescription costs. There are two major changes; the first change is that the income threshold to exempt seniors from deductibles has increased, which will qualify allow more low-income seniors to qualify. However, those not exempt will have to pay a increased deductible, $170, and will need to pay an extra $1 for each additional prescription.
budget financial literacy budget Friendly Financial Coach Bank Account Help Toronto Retirement education Matthew Siwiec

The budget also includes increased healthcare spending to hospitals with a goal of expanding services, reducing wait times, and maintaining existing services. $130 million will be spent over three years on cancer care services and there are further spending increases for hospice and long-term care. Also, parking passes will now be discounted for those that use them often.


Taxes and Loss of Tax Credits

This is the section that everyone despises! This year we see some increases in taxes on wine and cigarettes. Tobacco taxes are increasing by $3 per carton or an extra 1.5 cents per cigarette. Wine drinkers will also be impacted, as the lowest bottle price will be raised to $7.95 and now the LCBO will be able to increase their annual mark-up on wine by 2% for each year between 2016-2018 and an additional 1% in 2019.

We’ll be losing a few tax credits this year, specifically;
– The children’s activity tax credit
– Tuition and educational tax credit
– Healthy homes renovation tax credit

My Take

Overall, this budget focuses on helping low-to-medium income households and reducing green house gas emissions. For low-to-medium income households, many of the extra costs in the budget will be partly offset by government rebates and credits. Therefore, higher-income households will incur most of the extra charges.

Financially, the total government spending exceeds it’s projected revenue, incurring a modest deficit that the government projects to eliminate over the next couple years. The economic forecasts that were used to make these projections were based on many third party projections, ex. banks and researchers, and seem fairly accurate. This budget should be sustainable if Ontario’s economy stays on track and isn’t affected by an external shocks. My biggest concern is the way that the cap-and-trade will operate; as such systems have historically been misused.

Thanks for reading about how your personal finances will be impacted by the new Ontario Budget. If you have any questions, you can contact me at or 647-289-0012. Also, don’t forget to sign-up for our awesome newsletter!

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