Ontario households are saving about $500 apiece this year thanks lower pump prices, according to Queen’s Park. If you’re a smoker, wine drinker or commuter, you’ll be dedicating a portion of those savings to government coffers as soon as Friday.
Increases in so-called “sin” taxes as well as higher gas prices are among the most visible ways the 2016 provincial budget, announced Thursday, will hit consumer pocketbooks.
Here’s a look at some of the major line items introduced by Ontario Finance Minister Charles Sousa that will have an impact on Ontarians’ personal finances.
The biggest surprise in the budget is the significant leg up for low-income households in accessing postsecondary education.
The province will provide free tuition to college or university for students from households that earn less than $50,000 annually. Households earning under $83,000 will also see a meaningful bump in available money, with a budget pledge that grants “will exceed average college or university tuition.”
Sousa said the province isn’t spending more to achieve this, meaning a likely clawback for funding available for students from higher-income homes, though the province says it will “increase access” to interest-free loans or loans with low borrowing rates.
As of 12:01 a.m. Friday, there will be a $3 increase in the price of a carton of 200 cigarettes. Taxes on tobacco will also keep rising at the rate of inflation annually as part of the government’s cessation efforts.
The minimum price for a bottle of wine is also moving to $7.95, while the province will introduce in June the first in a series of wine tax increases of two percentage points annually through 2018. There will be another one-point hike in 2019.
Already announced, the budget confirmed plans to freeze any increase in hospital parking fees for three years. And in October, hospitals that charge more than $10 a day will be required to offer frequent visitors a 50 per cent discount.
Changes to the province’s subsidization model for medications will see a reduction in benefits for upper-income seniors, but the changes also hit seniors lower down the income ladder. Critics say many older Ontarians in need of critical medications will pay a much bigger share of their pharmaceutical costs.
“The reality is, a senior earning $19,500 a year is going to have their deductible almost double, to $170,” NDP Leader Andrea Horwath said. “You can’t argue that’s a rich senior.”
Cap and trade
The province’s already-announced broad strategy to reduce emissions and foster a “greener” society will come at a cost to virtually every consumer in Ontario. Premier Kathleen Wynne estimated this week retail pump prices could rise by more than 4 cents per litre, while those who heat their home with natural gas will pay several dollars more a month.
All told, Queen’s Park is looking to raise $1.9 billion in the first year of the cap-and-trade program to fund efforts like a $100-million rebate plan for homeowners to make their houses more energy efficient.
The province is setting aside $100 million to rebate homeowners who make their homes more energy efficient, by replacing rickety furnaces, drafty windows and other energy-draining inefficiencies around the house. The budget however was lacking key details, like when and how the program will be implemented (it’s expected to commence in 2017).
The $30 fee paid every time your vehicle’s emissions are tested under the province’s mandatory Drive Clean program is being scrapped. The province tests about two million vehicles each year. Yet much like the program to retrofit home heating systems, the timing of the fee elimination hasn’t been established, government officials said.