Canada: Ontario Budget 2007 Highlights

Last Updated: April 2 2007
Article by Colin MacDonald

Most Read Contributor in Canada, September 2016

On March 22, 2007, the McGuinty Government presented their fourth and final budget prior to the general election in October. The theme of this year’s budget is "Investing in People & Expanding Opportunity." The Budget is referred to as the next phase of the McGuinty government’s plan to strengthen the province by strengthening its people. This will be achieved by investing in children, continuing to strengthen education, health care and infrastructure, and balancing the budget.

The 2007 Budget contains no tax increases and projects the government’s second balanced budget in a row. This means an elimination of the $5.5 billion deficit inherited in 2003-04. As the Minister of Finance stated, "In 2006-07, revenue growth and interest on debt expense saving outperformed government projections. We are entering an era of balanced budgets; in fact, we are on track to post five consecutive surpluses if the reserve is not required in 2007-08."

The following summary features certain highlights of the 2007 Ontario Budget, with an emphasis on those areas that would be of greatest interest to clients of Borden Ladner Gervais LLP.


The government is proposing initiatives to boost the competitiveness of Ontario’s tax system and strengthen its business environment. These include:

  • Accelerating the elimination of the capital tax to July 1, 2010 from January 1, 2012;
  • A reduction of the Business Education Tax (see Property Taxes below);
  • Seeking the enactment of legislation introduced in the fall of last year that would harmonize the provincial corporate tax system with the federal corporate income tax base. This would provide businesses in Ontario with an annual Ontario corporate income tax cut of $90 million, and up to an additional $100 million in annual tax compliance savings; and
  • Continue Ontario’s role as a leader in the move toward a common securities regulator.


The province is projecting surpluses of $0.4 billion in 2007-08, $1.3 billion in 200-09 and $1.6 billion in 2009-10, if the reserve is not required. The government expects to post five consecutive surpluses between 2005-06 and 2009-10. The Budget also states that Ontario was able to find over $800 million in savings.

The Budget states that Ontario is committed to achieving ongoing balanced budgets by implementing the following fiscal plan:

  • Ensuring decisions are disciplined and holding the annual rate of total spending growth to less than the rate of growth in total revenue;
  • Investing in Ontario’s infrastructure, health care, education and postsecondary education and training in order to promote a strong economy;
  • Promoting principled and sustainable federal-provincial fiscal agreements;
  • Maintaining a prudent debt-to-GDP ratio; and
  • Maintaining a cautious and prudent fiscal plan (with annual reserves).


The government’s ReNew Ontario programme launched in 2005 is a five-year infrastructure plan to invest more than $30 billion by 2010. The 2007 Budget announces the following new initiatives:

  • $1.7 billion for the provincial highway system;
  • $200 million toward investment in the Toronto Transit Commission to modernize and expand; and
  • An immediate additional $70 million for the Rural Infrastructure Investment Initiative.

The 2007 Budget does not announce new initiatives within the energy sector. It does reaffirm the government’s commitment to replacing coal-fired generation in Ontario and highlights the Ontario Power Authority’s (OPA) ongoing initiative to establish an Integrated Power System Plan (IPSP). The government has also directed the OPA to begin feasibility studies with respect to refurbishing existing nuclear units and to initiate a federal approvals process for new units to be located at existing sites.


The 2007 Budget contains nearly $125 million in immediate environmental initiatives including:

  • Providing homeowners with rebates of up to $150 for home energy audits for a total of up to $24 million over four years; and
  • Providing $2 million to the Trees Ontario Foundation which is enough to plant 100 million trees.

The Budget also provides for the building of "green communities." These initiatives include:

  • New investments in transit across the province and the provision of $352 million to municipalities immediately based on transit ridership;
  • A new commitment to York Region’s VIVA transit express bus service;
  • $25 million to the Friends of the Greenbelt Foundation; and
  • Investment of more than $30 million to help restore and sustain the Great Lakes.


The government is proposing a 4.5 per cent non-refundable tax-credit for Ontario-based scientific research and experimental development in order to ensure that Ontario stays competitive in research and development.

The 2007 Budget also contains a number of new investments to enhance Ontario’s ability to develop and market new environmental technologies, including $21 million to Queen’s University to establish a convergence centre for bioproducts and bio-materials, and $15 million to the Ontario Centres of Excellence, which promote linkages between academia and business for market energy innovation.


The 2007 Budget proposes $37.9 billion in health sector spending in 2007-08 with money going to fund major projects to build new hospitals, modernize older hospitals and to reduce wait times. The Budget also allocates $143 million in 2007-08 to improve access to emergency care and an additional $64 million to promote the government’s comprehensive e-Health strategy.


Property tax changes are a key initiative of the 2007 Budget. The Budget affirms the government’s commitment to an improved property tax system that is fair, predictable and sustainable.

The Budget proposes to cut Business Education Taxes (BET) by $450 million over seven years, lowering BET rates to a target maximum rate of 1.6 percent. To ensure planned education spending increases will not be impacted, the province’s direct transfers to school will be increased.

There are also proposed changes to the property assessment system including:

  • A four-year reassessment cycle;
  • A mandatory phase-in of assessment increases over four years; and
  • Enhancements to the fairness and effectiveness of the assessment appeal system.

Finally, the government plans to phase out Greater Toronto Area (GTA) pooling, which should be fully eliminated by 2013 in order to lift a $200 million burden from the municipal tax bases of contributing municipalities.


The 2007 Budget announces a number of key initiatives aimed at supporting families and children. The most important is a new Ontario Child Benefit (OCB) that will provide an additional $2.1 billion in benefits cumulatively over its initial five years to assist approximately 1.3 million children living in low-income families. In addition, the Budget contains various other proposed investments to assist children and families including:

  • Enhancing current child care programmes by $25 million in 2007-08;
  • Investing $18.3 billion in Grants for Student Needs (GSN) to ensure student achievement and higher graduation rates;
  • Increasing investment in Family Literacy and Parenting Centres, Children’s Treatment Centres and Children’s Mental Health Centres and Programmes; and
  • Help for low-income families with children through the creation of a new $185 million housing allowance programme.

In addition, the Budget contained proposed investments aimed at assisting some of Ontario’s most vulnerable people. Key initiatives include:

  • Providing $127 million to municipalities immediately for affordable housing projects;
  • $200 million to enhance services and supports for people with developmental disabilities and their families;
  • A new life income fund (LIF) that would increase income for pensioners and permit up to 25% of their locked-in funds to be accessed;
  • Increasing minimum wage to $10.25 by 2010; ▪ Providing an additional $51 million in funding over three years to Legal Aid Ontario; and
  • Announcing $48 million to improve social infrastructure (e.g. hospices, community citizenship projects, community recreation centres and developmental services for vulnerable people).

BLG Government Relations Services

The Government Relations Group at Borden Ladner Gervais represents clients in their relations with governments in Canada at all levels - Municipal, Regional, Provincial and Federal and with Departments, Boards, Authorities and Agencies of each of those Governments.

BLG professionals bring extensive experience working within the public sector and maintaining excellent contact with key decision-makers. We provide insight with respect to new legislation, assessment of complex policies and identification of key contacts within the public service regardless of department and including appropriate elected officials.

Our services include:

  • Monitoring political policy developments
  • Analyzing the potential impact of emerging government policy and program changes on clients’ interests
  • Preparing briefs, submissions and presentations to governments on behalf of clients
  • Creating advocacy campaigns on behalf of clients, including communicating on behalf of clients with government decision-makers
  • Developing strategic advice that incorporates political agendas of the day with the technical expertise needed to meet the challenge of any public pronouncements

National Contact: Colin P. MacDonald (Calgary)

Regional Contacts: Robert A. Fyfe (Montreal), Hon. Gar Knutson (Ottawa), Jack Hughes (Ottawa), J. Stephen Andrews (Toronto), Jeffery S. Graham (Toronto), Dirk Laudan (Vancouver).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.