Rapid Recap: Staying the Course Amidst Revenue Windfall: Ontario Budget 2023
Ontario Minister of Finance Peter Bethlenfalvy released the Ontario 2023 Budget Building a Strong Ontario this afternoon with a focus on two themes, “Building Ontario” and “Working for You.” The budget includes a record spending of $204.7 billion, including $81 billion in health spending. The health budget will see an increase of $15.3 billion over the next three years, including $4.4 billion in new federal funding following on the recent agreement in principle over increases to the Canada Health Transfer.
Minister Bethlenfalvy has committed to “staying the course,” with the budget focused on many of the same issues as the 2022 Budget: developing infrastructure, strengthening the health care system and economic development.
Major health spending was committed to support the roll-out of new initiatives in the Your Health plan released in January 2023. The budget contains more than $56 billion over 10 years in health care infrastructure, including $48 billion for hospitals. It is unclear if the $8 billion increase in hospital infrastructure is due to inflationary costs on existing capital projects or a commitment to new projects. The budget also signals significant investments in health human resources capacity, with funding for education and training as well as increases in contract rates for home and community care staff. $72 million was also announced for the roll-out of the new Integrated Community Health Service Centres. Significantly, the government also announced today that they intend to expand scope of practice further for pharmacists to new common ailments, after a successful launch of the program in January 2023.
Despite these increases, the budget is more fiscally restrained than the past few iterations during the height of the COVID-19 pandemic, with a total increase in program spending of only $2.1 billion over the 2022 Budget and a projected deficit of only $1.3 billion. This is a stark contrast to the $12 billion increase in planned spending between Budget 2021 and Budget 2022. Part of the reduction in costs can be attributed to the gradual phasing out of time-limited funding related to COVID-19, while the government also reins in spending to address concerns about a potential recession.
See the end of this memo for the full list of health care commitments.
Minister Bethlenfalvy has signaled for weeks that the budget would show the government is committed to “staying the course.” This budget does exactly that, continuing with the themes of the 2022 Budget. Spending is more restrained than in previous budgets, with few increases outside of health spending.
Despite the increases in health spending, the government is likely to be criticized for not investing even more. In the few months since the Fall Economic Statement, the government’s projected deficit has almost entirely disappeared. When 2022-23 numbers are finalized in a few months, it is likely that this small deficit will turn into a surplus. Given these windfall revenues (~8% growth year-over-year) and the ongoing challenges in the system, there will be many groups that argue that the government should have invested more.
Overall, health care remains a priority with ongoing health human resources challenges, a significant surgical backlog and system capacity issues, however, the government continues to make efforts to turn the page to a greater focus on economic pocketbook issues and developing infrastructure.
There has been a significant increase in the government’s health infrastructure spending plans for the next 10 years, with an $8 billion (or 20%) increase over the 2022 Budget, and $18 billion more than the $30 billion announced in Budget 2021. Unlike the 2022 Budget, when the government emphasized the additional $10 billion as evidence of their commitment to expanding hospital capacity with the announcement, they have been quieter on the reasons for this year’s increase. If there are no new projects included in the additional $8 billion, this would represent a sizeable increase of the budget for projects already underway.
The $72 million for the expansion of Integrated Community Health Service Centres (the new name for Independent Health Facilities) helps to further clarify the government’s projected plan for expansion of this new model for private delivery of care. It is unclear at this time how many clinics or surgeries the government expects to fund in the first year of the expansion, but this figure acts as a guide for the scale of reform that they are considering.
There are major investments in health education and training, but the government has been quieter on immediate term solutions. Recent efforts to streamline professional registration requirements and develop building programs are significant, however, there are still major gaps in the health workforce. Unlike other provinces, the government has not made major commitments to address workforce retention, with the exception of the $5,000 nursing retention bonus in 2022. These issues are unlikely to be resolved in the short-term.
The government’s commitment to develop innovation pathways for new medical technologies in collaboration with Supply Ontario represents a new approach for medical technology procurement, potentially offering new avenues for innovative new technologies to enter the notoriously difficult Ontario market. This could see Ontario start to adopt new technologies at a faster pace and is worth watching.
With the government touting the success of the recent expansion of pharmacist scope of practice, they are doubling down with a commitment to increase the number of ailments pharmacists can prescribe. The government has been quieter about scope expansions for other professions since a quiet comment at the end of the Your Health plan, and the budget is also quiet on this point. There will be many opportunities for the government to consider how expanding scope for some regulated health professions could ease some of the health human resources challenges facing the health system.
Health Funding Announcements
Health Human Resources
- Previously announced expansion of the Learn and Stay Grant to include paramedic and medical laboratory technologist programs alongside nursing programs. The grant provides full, upfront funding for tuition, books and other direct educational costs to students in return for working and caring for people in the region where they studied for a term of service after they graduate.
- Investing $80 million over three years to further expand nursing education by increasing enrollment by 1,000 registered nurses, 500 registered practical nurses and 150 nurse practitioner seats.
- Providing $200 million in 2023-24 to extend supports to address immediate health care staffing shortages, including investments in the Enhanced Extern Program and Supervised Practice Experience Partnership Program.
- Investing $100.8 million over the next three years to expand and accelerate the roll-out of medical training seats resulting in an additional 160 undergraduate positions and 295 postgraduate positions by 2028.
- Investing $33 million over three years for 100 additional undergraduate seats, beginning in 2023, as well as 154 medical training seats to prioritize Ontario residents trained at home and abroad beginning in 2024 and going forward.
- Providing $60 million over two years to expand existing primary care teams and create up to 18 new primary care teams in communities with the greatest need.
- Funding 52 new Physician Assistant training seats, with regulation of Physician Assistants to be rolled out by 2024.
- $3.3 million over the next three years to expand access to dual credit opportunities in health care-related courses, providing for an extra 1,400 secondary students. These credits will cover both high school and introductory-level courses in college.
- The government confirmed that COVID-19 paid leave measures will expire on March 31, 2023.
- $3.349 billion in hospital infrastructure spending in 2023-2024. This is part of $48.119 billion in spending projected over the next 10 years including over $32 billion in hospital capital grants to support more than 50 hospital projects adding 3,000 new beds over 10 years.
- An additional $581 million for other health infrastructure spending in 2023-2024, with a total of $8.482 billion in spending projected over next 10 years. This includes the $6.4 billion in spending on building 30,000 new long-term care beds and upgrading 28,000 beds by 2028.
- Commitment to further expand scope of practice for pharmacists to include new ailments.
Surgical Backlog and Integrated Community Health Service Centres
- Investing an additional $72 million for expansion of Integrated Community Health Service Centres. This builds on the $18 million announced in January to expand the number of cataract surgeries, minimally invasive gynecological surgeries, plastic surgeries and MRI and CT scans.
Home and Community Care and Seniors Care
- $569 million in accelerated funding, including nearly $300 million to support contract rate increases to stabilize the home and community care workforce. This brings forward some of the $1 billion in funding announced in the 2022 Budget.
- Proposed changes to expand the Guaranteed Annual Income System (GAINS) program, starting in July 2024, to see about 100,000 additional seniors eligible for the program and adjusting the benefit annually to inflation.
- Adding 23 palliative care beds to the 500 already available.
- $120 million in Seniors Care at Home Tax Credits.
- $5 million annually to support 6,500 people with dementia to live in the community.
- Investing more than $174 million over two years to continue the Community Paramedicine for Long-Term Care Program.
- $5.5 million in 2023-24 to build new Behavioural Specialized Units in long-term care homes, including approximately 70 new beds.
- $1.2 million to the Ontario Personal Support Workers Association to help with recruitment efforts by promoting the personal support worker profession in the long‐term care sector.
Mental Health and Addictions
- Providing an additional $425 million over three years to support mental health and addictions services as part of the Roadmap to Wellness commitment of $3.8 billion over 10 years. This includes a 5% increase in base funding for community-based mental health and addiction service providers.
- Providing an additional $25.1 million in 2023-24 to support the identification, investigation, protection, and commemoration of Residential School burial sites and provide mental health supports to First Nation communities.
- Providing an additional investment of $9.6 million to accelerate the development of the Runnymede Healthcare Centre’s First Responders Wellness and Rehabilitation Centre towards its next round of approval.
- Investing in the Life Sciences Innovation Fund, launched in November 2022, to help life sciences entrepreneurs and innovators bring their ideas and prototypes from the lab to the marketplace. The fund is being delivered by the Ontario Centre of Innovation, and eligible companies will receive up to $500,000 to scale their made‐in‐Ontario health solutions.
- Recommitment to developing the Life Sciences Council.
- Providing a grant to McMaster University for the McMaster Nuclear Reactor, which will help increase research and production of critical nuclear isotopes.
- Development of a new Ontario Made Manufacturing Investment Tax Credit to support Ontario-based, Canadian-controlled manufacturers. This will include a 10% refundable Corporate Income Tax credit for investments in buildings, machinery and equipment, capped at $2 million a year
- Providing $3.1 million in 2023-24 for an expansion of Ronald McDonald House Charities Ottawa House to more than double the capacity to 115,000 overnight stays per year.
- Supporting children and youth with complex special needs by investing $12 million over three years to fund 14 additional beds at Safehaven.
- Committing more than $200 million to connect children and youth to care at hospitals and in their communities.
- $60 million over two years to expand existing primary care teams and create up to 18 new primary care teams in communities with the greatest need.
- An additional $51 million over three years for the Dedicated Offload Nurses Program.
MedTech and Supply Ontario
- Commitment to develop a multi-year Claims Modernization plan to improve management of claims related to Ontario’s Health Plans. This could have an impact on a broad range of government programs, including drug programs, the Ontario Disability Support Program and the Assistive Devices Program among other health plans. Many of these programs have been criticized by the Auditor General for outdated and inefficient practices.
- The government has committed to engage with the private sector to develop more efficient processes. The government also announced it is exploring an Innovation Pathway in collaboration with Supply Ontario to fund, review and adopt innovations in the health system, reducing barriers to early adoption.
- The government announced a new Emergency Management Preparedness Grant to support community organizations.
- Investments in a new emergency response fund to provide relief to municipalities.
- Expanding emergency preparedness program in coordination with emergency management partners.
- Annual funding to support capacity in communities with nuclear roles and responsibilities.