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CTV News
15-05-2025
- Business
- CTV News
Ontario deficit grows $10B as province tables $232.5B budget aimed at protecting economy from tariffs
Ontario's deficit is expected to balloon by another $10 billion in 2025-26 as the Ford government spends billions of dollars on programs to support workers and stimulate the economy in the face of U.S. tariff threats. 'Ontario and all of Canada are at a precipice, and we need to take serious steps to make sure we do not find ourselves anywhere near the bottom,' Finance Minister Peter Bethlenfalvy said Thursday as he presented Ontario's latest budget, the first since the Ford government won re-election in March. The government says it is setting aside $5 billion for the Protecting Ontario Account – a fund promised during the campaign to provide support to businesses facing 'significant tariff-related business disruptions.' The province will also bolster the Skills Development Fund by another $1 billion over the next three years. There's also $500 million for a new Critical Minerals Fund the government says will 'unleash the potential' of the mineral sector. Finance Minister Peter Bethlenfalvy called the tariffs imposed by the United States 'a wake-up call for Canadians' in prepared remarks but said this is a time for growth rather than fear. The government says it plans to spend about $200 billion over the next 10 years on infrastructure. That will include $33 billion in 2025-26. Over the next decade., the plan includes $30 billion for highway construction and rehabilitation; $61 billion for public transit, such as the GO 2.0 expansion and subway projects; $56 billion for health care infrastructure; and around $30 billion to build more schools and child care spaces. Many of the measures included in the budget were previously unveiled. As announced earlier this week by Premier Doug Ford, the budget keeps an election promise to permanently lower the gas tax and to eliminate tolls on a provisionally owned portion of Hwy. 407 East, between Clarington and Pickering. Last week Bethlenfalvy announced an expansion of the Ontario Made Manufacturing Investment Tax Credit – a tax credit meant to bolster Ontario's manufacturing sector. That will provide $1.3 billion over three years to help the sector. A six-month deferral of some taxes for businesses, worth $9 billion, was announced in April and is also included in the budget. Impact of tariffs still uncertain The new spending means the government is now projecting a deficit of $14.6 billion in 2025-26 -- $10 billion more than last year's budget predicted and $13 billion more than the fall economic statement projected just a few months ago. A deficit of $7.8 billion is expected in 2026-27 instead of the $500 million surplus that had been projected previously. The government still believes that it can balance the books by 2027-28, predicting a small surplus of $200 million in that fiscal year. Fiscal outlook Ontario's 2024-25 deficit is now projected to be $6 billion -- $3.8 billion lower than the 2024 budget predicted. The government says that's due to higher-than-expected tax revenue. While there have been fears that tariffs could send Ontario's economy into a recession, the budget actually predicts mild growth. Ontario's real GDP grew by 1.5 per cent in 2024, but is expected to rise by just 0.8 per cent in 2025 and one per cent in 2026 because of tariffs. GDP is forecast to grow by 1.9 per cent in 2027-28. However, ministry staff stress that the economic environment remains highly unpredictable. They say that the impact of tariff actions has not yet been fully observed in recent economic data, but forward-looking economic indicators are down significantly, close to levels not seen since the pandemic. No major increases for health, education spending The government plans to spend $91.1 billion on health care. That's up from $89.3 billion from last year, but the increase is still less than inflation. While health care spending growth looks somewhat flat, the government says that's because of higher costs in previous years when the province experienced an influx of newcomers and there were added pressures on OHIP. Spending in 2025-26 will include $235 million to create and expand 305 additional primary care teams as part of a plan announced in January to connect more Ontarians with primary care. The latest budget also includes a fertility tax credit that would cover 25 per cent of fertility treatments up to $20,000 per year, for a maximum of $5,000. Education spending is up at $1 billion, compared to $38. 4 billion last year, but it appears that it will remain relatively flat for the next two years. The government says that's because of higher capital spending in previous years. Wher your money goes Opposition slams budget as 'band-aid' Opposition Leader Marit Stiles slammed the government's latest budget at Queen's Park Thursday, calling it a missed opportunity to strengthen the province. 'This is a band-aid budget, a missed opportunity to strengthen Ontario,' Stiles said. She said she was 'shocked' there was plenty of discussion around alcohol prices, but little attention to child care or post-secondary spending. When it comes to housing, MPP Jessica Bell said the government 'quite frankly have thrown in the towel on housing in this budget.' When it comes to housing, the government is lowering its projections, expecting just 71,800 housing starts for 2025. That's about 20,000 fewer housing starts than the 92,300 predicted in the 2024 budget. The forecast has also been lowered by about 20,000 homes for 2026 and about 13,000 homes for 2027. However the government notes that those are macro-economic projections which may differ from the ministry's real-time numbers, which could potentially be higher. Ontario has set a goal of building at least 1.5 million homes by 2031 and needs to build more than 100,000 homes each year to stay on track. Bethlenfalvy said Thursday they are still committed to that goal. The budget includes no new details on Premier Doug Ford's proposal to build a vehicle and transit tunnel under Highway 401 to relieve gridlock, simply saying that feasibility work will be carried out. Other highlights $75.5M extra beyond annual funding to homelessness prevention programs, such as boosting shelter capacity and ready-to-build affordable housing projects $57M on helicopters for police in Niagara and Windsor $15.5M more over three years to increase production of medical isotopes to 24 hours a day The province will create an 'Ontario Grown' badge this summer for cannabis products with at least 75 per cent Ontario content Cannabis shop windows will no longer have to be blacked out to 'increase comfort, security, and safety' of customers and employees, though products cannot be visible from the outside The province will be making various changes to alcohol pricing and taxes, with revenue from the LCBO and the beer, wine and spirits tax expected to drop significantly in 2025-26. -With files from CTV Toronto's Siobhan Morris
Free Malaysia Today
12-05-2025
- Business
- Free Malaysia Today
Investors seeking emerging currency bargains zero in on Asia
A Bloomberg index of Asian currencies rose the most in almost a week today. (Freepik pic) LONDON : Currencies like South Korean won, the Indonesian rupiah, and the Indian rupee rank among the most undervalued in emerging markets relative to their historic average, according to data compiled by Bloomberg. Beyond attractive valuations, fresh economic stimulus in China and signs of progress in US-Asia trade negotiations are adding to the region's allure. The potential for Asian currencies to strengthen was on full display earlier this month, when a sharp surge in the Taiwanese dollar spread across the region. That helped the cohort catch up with their developed and emerging-market peers, which had been outperforming following the dollar's decline after US president Donald Trump's early-April tariff announcement. 'On a fundamental basis, it's been cheap for a long time,' said Claudia Calich, head of EM debt at M&G Investment Management, adding that investors including herself had been underinvested in Asia thanks to higher carry opportunities in Latin America. 'It's finally started correcting a little, but even then it's still relatively cheap,' Calich said. Korean won, which plummeted last month in response to Trump's barrage of 'reciprocal' tariffs, is a prime candidate for further gains, according to Goldman Sachs Group Inc and Barclays Plc. Goldman strategists – who looked at the extent of undervaluation, possible conversion of dollar assets, and the role of the yuan – for their picks, also expect Malaysia's ringgit and the South African rand to appreciate. Barclays analysts see significant scope for gains in the Singapore and Taiwanese dollars too. Sentiment toward Asia's depressed currencies has already improved, as investor sentiment toward concerns about Trump's policies tarnish the appeal of the dollar and trade-deal hopes improve appetite toward EM assets. A Bloomberg index of Asian currencies rose the most in almost a week today, as the yuan and the Taiwanese dollar advanced after the US and China reported 'substantial progress' in their trade talks. While details were sparse, the progress added to signs that the tariff uncertainty may have peaked, helping the gauge gain more than 3% since its low in April. Global funds have been snapping up local currency bonds in Indonesia, Thailand and South Korea this month, according to data compiled by Bloomberg. Selling pressure on the greenback has been so strong that Hong Kong's monetary authority was forced to intervene to maintain its peg. While many market watchers expect a degree of appreciation in Asian currencies, whether the gains will last beyond catch-up moves remains to be seen. The relative stability of the yuan as a managed currency can be a double-edged sword in that it can reduce volatile swings across Asia but also cap rapid gains. Beijing has signaled that it's not ready to let the yuan strengthen dramatically against the US currency. The dollar has regained some ground last week as Federal Reserve chair Jerome Powell signaled the central bank is not in a hurry to adjust interest rates. That's led to many Asian currencies paring some of their earlier gains. 'I don't think we're necessarily in the global growth environment now where Asian currencies are going to meaningfully outperform,' said Grant Webster, co-head of EM sovereign debt and currencies at Ninety One in London. Still, the dominance of the dollar has been so ingrained in investors' mindset that a dent in that perception has been enough to create wild swings. Investors have no option but to prepare for future episodes like the Taiwanese dollar's epic surge. 'When scouting for potential winners, 'the focus is on the ones that haven't' gained much yet,' said Dominic Schnider, head of global FX and commodities at the chief investment office of UBS Group AG's wealth management unit. In emerging Asia, 'some of these currencies just from a valuation angle do look cheap'. Key events to watch this week: Trade and geopolitics will be at the forefront with the fallout from the US-China trade talks. Trump is due to visit to Saudi Arabia, Qatar and UAE. Brazil's president Luiz Inácio Lula da Silva is expected to meet with his Chinese counterpart Xi Jinping on the sidelines of the China-CELAC summit. Trade data in India and Indonesia will be parsed for signs of the impact of US tariffs. GDP figures for Malaysia and Poland are also due. Mexico's central bank is expected to lower its policy rate. Inflation data for India, Argentina, Bulgaria and Poland will provides investors with fresh clues on the path of monetary policy in those countries. Assets in India and Pakistan will be in focus after the two nations agreed to a full and immediate ceasefire, though each soon accused the other of violating the truce.
