Ontario Adds $2.2B In COVID-19 Spending To Prepare For Uncertainty Around Variants

Ontario is putting $2.2 billion more toward COVID-19 spending, bracing for the impacts of the Delta variant as the province sees a rising number of cases, largely in unvaccinated people.

The province reported 513 new infections on Thursday, with more than 80 per cent of them in unvaccinated or partially vaccinated people.

Half of the total new cases are in people aged 20 to 39. It’s the highest case total since mid-June and is based on 22,896 tests done in the previous day.

Finance Minister Peter Bethlenfalvy released the province’s 2021-22 first quarter finances Thursday, announcing an additional $2.2 billion for a COVID-19 fund, thanks to a revenue projection that’s $2.9 billion higher than in the budget.

“Under normal circumstances and all other factors remaining the same, higher than projected revenue would directly reduce the deficit,” he said.

“However, there remains continued uncertainty about variants of concern, the risk of surges and future waves, and the need to target future investments to spur economic recovery.”

The higher revenue is due to $1.9 billion from the federal government and another approximately $1 billion from corporate taxes and land transfer taxes.

The deficit projection is being revised by $700 million, down to $32.4 billion.

Bethlenfalvy didn’t specify what the $2.2 billion in new spending would go toward, saying it’s available for the government to use to protect people’s health and the economy as needed.

The lower deficit forecast and stronger economic growth contributed to a lowered net debt-to-GDP ratio, down 0.7 percentage points to 48.1 per cent.

Real GDP increased 1.2 per cent in the first quarter of 2021, putting it only 1.8 per cent below the level in the fourth quarter of 2019.

“Ontario’s fiscal recovery will be driven by economic growth, and the continued recovery and employment and the modest deficit proven projected today are evidence of that,” Bethlenfalvy said.