McGuinty Government's 2007 Budget Expands Opportunity in a New Era of Economic Strength



    $2.1 Billion to Help Children and Families, and a Return to Balanced
    Budgets

    QUEEN'S PARK, March 22 /CNW/ - The McGuinty government's fourth Budget
expands opportunity for all Ontarians by investing in children, continuing to
strengthen education, health care and infrastructure and balancing the Budget.
    "This Budget expands opportunity for children and their families who are
working hard to succeed," said Ontario Finance Minister Greg Sorbara.
"Expanding opportunity creates new economic strength and forms the foundation
of a successful, caring and compassionate society."
    The 2007 Budget announces a number of initiatives to help children and
families, including a new Ontario Child Benefit (OCB), which would provide an
additional $2.1 billion over the first five years, and benefit almost
1.3 million children a year when fully implemented. It would mean that parents
would be able to move off welfare without worrying about losing support for
their kids.
    It would also provide benefits to all children under the age of 18 in
low-income families. The OCB is part of this Budget's proposed investments and
other measures to help children and families, including:

    
    -   A two-per-cent increase in Ontario Works and Ontario Disability
        Support Program payments;
    -   Increasing the hourly minimum wage to $10.25 in 2010;
    -   Enhancing child care through an additional $25 million in 2007-08,
        growing to $50 million in ongoing support starting in 2008-09;
    -   New affordable housing programs;
    -   Giving pensioners enhanced access to their locked-in accounts and
        permitting pension income splitting; and
    -   Increased benefits for about 155,000 injured workers.
    

    Since October 2003, 327,000 net new jobs have been created in Ontario.
Over the next three years, another 270,000 new jobs are expected.
    The 2007 Budget, which contains no tax increases, projects a balanced
budget for 2006-07, the second in a row, eliminating the $5.5 billion deficit
inherited in 2003-04.
    "In 2006-07, revenue growth and interest on debt expense savings
outperformed government projections," Sorbara said. "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."
    Other key elements of the 2007 Budget include proposals to enhance the
fairness of Ontario's property tax system and to cut high Business Education
Tax rates.
    "Homeowners and municipalities have told us they want a property
assessment system that is predictable and fair," Sorbara said. "Business
property owners need a system that treats them fairly and does not hamper
competitiveness."
    The 2007 Budget also announces almost $125 million in immediate
environmental initiatives, including home energy audit rebates and funding for
the Trees Ontario Foundation, enough to plant more than one million trees
across the province. The government will unveil a major plan to establish a
greener economy this spring.

    The 2007 Budget also continues to make significant investments in health
care, education and infrastructure, including:

    
    -   $37.9 billion in health care spending in 2007-08, including an
        additional $43 million, bringing the total to $89 million, to provide
        every new Ontario nursing graduate with an opportunity for full-time
        employment, an increase of $14 million for more nurses in long-term
        care homes, and $135 million to further reduce wait times, including
        wait times for pediatric surgery;
    -   $18.3 billion in grants to school boards in 2007-08, up almost
        $800 million from last year and up more than 17 per cent from 2003-04
        funding, continuing to reduce primary class sizes, hire more
        elementary teachers and help build on the commitment to higher test
        scores and high school graduation rates;
    -   $4 billion in base operating grants to colleges and universities in
        2007-08, and an additional $390 million for postsecondary
        institutions to help with more classroom space, higher enrolments and
        training; and
    -   $5.9 billion in infrastructure investments in 2007-08 for transit,
        highways, hospitals, schools, colleges, universities and rural
        infrastructure.

    "The McGuinty government's plan is working for Ontarians. Our schools are
better places to learn, our colleges and universities are expanding, our
health care system is both healthier and more responsive, we are building new
infrastructure across the province and our economy is growing," Sorbara said.
"Today we begin an era of balanced budgets and sustainable surpluses, while
expanding opportunity for our most vulnerable citizens, directing new
resources to enhance public services, strengthening our economic capacity and
launching initiatives for a greener Ontario."

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               Ce budget est également disponible en français.

          You can access the 2007 Budget and all related budgets at
             www.ontariobudget.ca or by calling 1-800-337-7222.
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    2007 Ontario Budget                                          Backgrounder
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                                                               March 22, 2007

              EXPANDING OPPORTUNITIES FOR CHILDREN AND FAMILIES
                     $2.1 Billion Ontario Child Benefit

    Expanding opportunities for children and families is an important
investment in Ontario's future. All children must be given the best possible
start in life if they are to seize opportunities for success. Families must be
given the support they deserve to secure their most basic needs and be
equipped to participate in Ontario's economic prosperity.

    Ontario Child Benefit (OCB)

    The OCB would provide an additional $2.1 billion in benefits cumulatively
over its initial five years.

    It would:
    -   Help nearly 1.3 million children in low-income families annually when
        fully implemented - many more than the 196,000 children in families
        currently receiving social assistance and the 271,000 that currently
        receive the Ontario Child Care Supplement for Working Families
        (OCCS);
    -   Provide similar benefits to all children younger than 18 in low-
        income families, whether their parents work or receive social
        assistance;
    -   Help parents receiving social assistance make the transition to work,
        because they would continue to receive income support for their
        children after beginning employment; and
    -   Begin with a down payment in July 2007 of up to $250 per child under
        age 18, rising to a maximum of $1,100 per child once the program is
        fully implemented in July 2011, providing an additional $765 million
        in support annually.

    OCB payments would be reduced by 3.4 cents for every dollar of adjusted
family net income above $20,000 in 2007, and eight cents from 2008 onwards.
When fully implemented, the OCB would benefit about 800,000 more children than
under the current OCCS and social assistance programs combined.

    MAXIMUM ANNUAL ONTARIO CHILD BENEFIT
    ($ PER CHILD PER BENEFIT YEAR(1))

    Year                         2007      2008      2009      2010      2011
    Benefit level                 250       600       805       900     1,100
    (1) Benefit years are from July 1 to June 30.
    

    Relationship to Federal Child Benefits

    With these reforms, the government goes well beyond ending the clawback
of the National Child Benefit Supplement (NCBS). The government plans to
invest four times as much money to help more than twice as many kids.
    Since taking office in 2003, the government has flowed through all
incremental increases to the NCBS, providing an additional $56 million in
2006-07 to families receiving social assistance. The government would go
further by flowing through all future incremental increases to the NCBS
permanently.
    Upon implementation of the OCB, neither the OCB nor social assistance
benefits would be reduced by any portion of the NCBS.
    Ontario is working with the federal government to ensure that the
proposed federal Working Income Tax Benefit (WITB) realizes its objective of
supporting vulnerable individuals in Ontario and the rest of Canada. Once the
WITB is implemented, the Ontario Government would help low-income families and
individuals by flowing the full amount of the benefit through to Ontarians
receiving social assistance.

    
    Lowering the "Welfare Wall"

    The new OCB would help lower the welfare wall by removing children's
benefits from social assistance. This would:
    -   Ensure families continue to receive income support for their children
        when parents leave social assistance for employment; and
    -   Allow families receiving social assistance to keep a much larger
        portion of income support for their children as their earnings
        increase. This is because the OCB would be reduced by only eight per
        cent of adjusted family net income exceeding $20,000. By contrast,
        social assistance benefits are reduced by 50 cents for every dollar
        of earnings.

    Child Care/Early Development

    To support Best Start - the McGuinty government's plan to ensure that
children in Ontario will be ready and eager to achieve success in school by
the time they start Grade 1 - this Budget proposes to:

    -   Enhance current child care programs by $25 million in 2007-08,
        growing to $50 million annually starting in 2008-09. This would be in
        addition to the $63.5 million in annual funding announced in the 2006
        Ontario Budget;
    -   Expand the Healthy Babies Healthy Children program with an on-going
        investment of more than $5 million to support the needs of at-risk
        families with children. The expanded program would address the health
        and social needs of these families through early intervention and
        intensive follow-up so that children arrive at school with the skills
        and abilities to succeed; and
    -   Establish a College of Early Childhood Educators to improve and
        maintain consistent standards of quality in the child care system.
        The college would establish professional standards of practice,
        qualifications and ongoing professional development for early
        childhood educators.
    

    Success For Students

    The McGuinty government is continuing its plan for better student
achievement and higher secondary school graduation rates by investing
$18.3 billion in Grants for Student Needs (GSN) funding to school boards in
the 2007-08 school year, an increase of $781 million from last year, and of
more than 17 per cent from 2003-04. By 2008-09, GSN funding will rise to
$18.6 billion.

    Family Literacy and Parenting Centres

    Family literacy and parenting services are free programs for parents,
grandparents and caregivers of children from birth to six years old. These
programs help prepare children for successful school entry by supporting the
establishment of early positive connections to future schools and building a
strong home-school partnership. In 2007-08, the Province is committing an
annual investment of $6 million, expanding services across Ontario.

    Children's Treatment Centres

    Children's Treatment Centres are community-based organizations that
provide about 40,000 children annually with such services as physiotherapy and
speech and language therapy. The government's total annual funding to these
centres will have increased by nearly $30 million between 2003-04 and 2007-08,
including $10 million announced in the 2006 Ontario Budget to provide services
to almost 5,000 children and youth across the province, and an additional
$4 million starting in 2007-08.

    Children's Mental Health

    The province is building on its previous investments to more than 250
child and youth mental health centres and 17 hospital-based outpatient
programs by providing $8 million to address gaps in local service needs and
reduce wait times. As of 2007-08, the government will have increased funding
in these areas by nearly $80 million since 2003-04, including enhancements
announced in the 2004 Budget.

    Housing Allowance

    The 2007 Budget proposes to help low-income working families with
children pay their rent by creating a new, $185 million housing allowance
program that would begin in January 2008 and create more than 27,000 new
housing allowances and provide up to $100 a month, for a maximum of five
years.

    
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               Ce budget est également disponible en français.

          You can access the 2007 Budget and all related budgets at
             www.ontariobudget.ca or by calling 1-800-337-7222.
    -------------------------------------------------------------------------



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    2007 Ontario Budget                                          Backgrounder
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                                                               March 22, 2007

              EXPANDING OPPORTUNITIES FOR LOW-INCOME ONTARIANS
                    Support for Individuals and Families
    

    Expanding opportunity for all helps build a strong and prosperous
Ontario. The McGuinty government recognizes that giving everyone a fair chance
to succeed is the right thing to do - for society and for the economy.
    In addition to the Ontario Child Benefit, the 2007 Budget proposes a
number of initiatives to help the most vulnerable people in the province.

    Social Assistance

    The government proposes to increase support for Ontario's most vulnerable
families and individuals by raising Ontario Works and Ontario Disability
Support Program rates by two per cent, effective November 2007. On a full-year
basis, the proposed increase would provide an additional $83 million in
benefits to more than 420,000 Ontario families with more than 196,000
children, as well as families receiving Assistance for Children with Severe
Disabilities and Temporary Care Assistance. Municipalities would not be
required to contribute to the proposed rate increase until January 2008.

    Affordable Housing

    The government recognizes that many low-income Ontarians need affordable
housing. That is why, with the support of the federal government's $392-
million trust funds, the 2007 Budget proposes to:

    
    -   Provide $127 million to municipalities immediately for new affordable
        housing or to rehabilitate existing housing;
    -   Help low-income working families with children pay their rent by
        creating a new, $185 million housing allowance program that would
        begin in January 2008 and create more than 27,000 new housing
        allowances and provide up to $100 a month, for a maximum of five
        years; and
    -   Support off-reserve Aboriginal housing with an $80 million
        investment, allocated in partnership with Aboriginal communities, for
        up to 1,100 off-reserve housing units.

    Seniors

    The government is proposing to introduce a new life income fund (LIF) that
would increase income for pensioners in retirement and permit up to 25 per
cent of their locked-in funds to be unlocked. The new LIF, and other
modifications to the rules governing locked-in accounts, would give pensioners
who hold locked-in retirement savings transferred from employment pension
plans more flexibility in managing their retirement income.

    Other proposals to benefit seniors include:
    -   Enhancing the Ontario Property and Sales Tax Credits for seniors for
        the fourth time in four years; and
    -   Allowing individuals to split certain types of pension income for tax
        purposes with a spouse or common-law partner. This would provide
        Ontario income tax savings of about $170 million to Ontario couples
        with eligible pension income in 2007.

    Developmental Services

    The government is enhancing services and supports for people with
developmental disabilities and their families in communities across Ontario.
The government will invest more than $200 million in additional operating
funding over four years to strengthen capacity in developmental service
agencies, and $7 million in capital funding to provide needed repairs and
maintenance to developmental service community agencies. With this new
funding, the government will have invested more than $500 million in
developmental services since 2003.

    Other Budget proposals to support low-income working Ontarians include:

    -   Flowing through the proposed federal Working Income Tax Benefit to
        Ontarians receiving social assistance;
    -   Increasing the hourly minimum wage to $10.25 in 2010, with three
        annual increases of 75 cents starting on March 31, 2008;
    -   Enhancing Workplace Safety and Insurance benefits for about 155,000
        injured workers by 2.5 per cent on July 1, 2007 and January 1 in each
        of 2008 and 2009, along with other improvements;
    -   Providing an additional $51 million over three years, starting in
        2007-08, to Legal Aid Ontario; and
    -   Announcing $48 million to improve social infrastructure, including:
        -  $10 million for hospices;
        -  $5 million for community citizenship projects;
        -  $15 million for community recreation centres; and
        -  $18 million for vulnerable populations, including developmental
           services.

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               Ce budget est également disponible en français.

          You can access the 2007 Budget and all related budgets at
             www.ontariobudget.ca or by calling 1-800-337-7222.
    -------------------------------------------------------------------------



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    2007 Ontario Budget                                          Backgrounder
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                                                               March 22, 2007

                     FAIR AND PREDICTABLE PROPERTY TAXES
                 New Measures Enhance Fairness and Stability
    

    The McGuinty government is committed to an improved property tax system
that is fair, predictable and sustainable.

    Cutting Business Education Property Taxes

    This Budget announces a plan to cut Business Education Taxes (BET) by
$540 million. Over seven years, high BET rates will be lowered to a target
maximum rate of 1.60 per cent, which is well below the current average BET
rate of 1.85 per cent.
    This plan will reduce BET rates in 321 municipalities across the province
and for more than 500,000 businesses. The Province's direct transfers to
school boards are being increased to ensure that the BET cut will not affect
planned increases in overall education funding.

    Fair and Predictable Property Taxes

    The government proposes to introduce changes to the property assessment
system to enhance the fairness and predictability of assessments for property
owners. These proposed changes are:

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

    The government will consult with its municipal partners and the Municipal
Property Assessment Corporation on the implementation details of these
proposed measures and related programs.

    Timing of Reassessments
    The next reassessment is currently scheduled for the 2009 taxation year,
based on property values as of January 1, 2008. To provide stability and
predictability to taxpayers, the government is proposing that subsequent
reassessments be conducted every four years, coupled with a mandatory phase-in
program.

    Mandatory Phase-In of Residential Assessment Increases
    The government proposes to provide Ontario homeowners with an additional
level of tax stability and predictability by spreading future assessment
increases equally over a four-year period through a mandatory phase-in
program, which would complement the proposed four-year assessment cycle. The
program would be implemented province-wide in 2009 following the next
reassessment. Assessment decreases would apply immediately.

    Assessment Appeal System
    To improve the fairness and effectiveness of the assessment appeal
system, the government is proposing to establish a two-stage process with
standardized information disclosure protocols.

    Ending GTA Pooling

    The government is announcing a plan to phase out Greater Toronto Area
(GTA) pooling. For 2007, GTA pooling contributions will be rolled back to 2004
levels. Each subsequent year, costs will be reduced by one-sixth of the 2004
levels until the program is fully eliminated in 2013.
    The government will also make provisions to ensure continued financial
support for those municipalities currently receiving assistance through GTA
pooling. Therefore, as GTA pooling is phased out, the Province will take
responsibility for social assistance and social housing costs currently funded
under the program. This will eliminate a $200 million burden from the
municipal property tax bases of contributing GTA municipalities while ensuring
continued financial assistance for recipient municipalities.

    Ontario Property and Sales Tax Credits for Seniors

    The Province provides property tax relief for low- and moderate-income
individuals and families through the refundable Ontario Property and Sales Tax
Credits, delivered annually through the personal income tax system. For 2007,
this program is expected to provide an estimated $740 million in property tax
relief to Ontarians who own or rent their principal residences.
    The government is proposing to enhance the Ontario Property and Sales Tax
Credits for seniors by increasing the senior couples' income threshold for
these credits beginning in 2007, which would be determined when the federal
government finalizes Old Age Security and Guaranteed Income Supplement amounts
for 2007. In 2007, eligible seniors would benefit from an estimated
$97 million in property tax relief as a result of improvements since 2003.

    
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               Ce budget est également disponible en français.

          You can access the 2007 Budget and all related budgets at
             www.ontariobudget.ca or by calling 1-800-337-7222.
    -------------------------------------------------------------------------



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    2007 Ontario Budget                                          Backgrounder
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                                                               March 22, 2007

                  EXPANDING OPPORTUNITIES FOR BETTER HEALTH
                Shorter Wait Times, More Doctors and Nurses,
               Promoting Better Health and Preventing Illness

    Shortening Wait Times

    Ontario's Wait Time Strategy improves access to health care and reduces
patient wait times in five areas: cancer surgery, cardiac procedures, cataract
surgery, hip and knee replacements, and magnetic resonance imaging and
computed tomography (MRI/CT) scans. In this Budget, the government is
announcing that it plans to add pediatric surgeries to the strategy.

    Wait time reductions since 2005 are down in all five areas including:
    -   Cataract surgeries: wait times down 128 days or 41 per cent
    -   Knee replacements: wait times down 133 days or 30 per cent
    -   Cancer surgeries: wait times down 13 days or 16 per cent.

    Improving Access to Doctors, Nurses and Other Health Professionals

    The government's innovative health-human-resource strategy,
HealthForceOntario, helps facilitate the right mix, supply and distribution of
human resources across the province. Key components of this strategy include:
    -   Hiring over 8,000 more nurses by the end of 2007-08 - in this Budget,
        the government delivers on this commitment through an additional
        $43 million, bringing the total to $89 million, to provide every new
        Ontario nursing graduate with an opportunity for full-time
        employment, and an increase of $14 million for more nurses in long-
        term care homes; and
    -   Training more doctors - first-year medical school enrolment is being
        increased by 23 per cent between 2004-05 and 2009-10.

    By the end of 2007-08, 150 Family Health Teams are planned to be fully
operational - providing care to more than 2.5 million Ontarians in 112
communities. In addition, by 2007-08 the number of Community Health Centres
will rise to 76 from the current 54.

    The government is improving access to emergency care by investing an
additional $143 million in 2007-08 through the Emergency Department Action
Plan to:
    -   Improve physician coverage in, and increasing the efficiency of,
        emergency departments across the province;
    -   Invest $35 million in more home-care services and supports to keep
        people healthy at home; and
    -   Support the development of 1,750 new long-term care beds and
        replacement of 662 long-term care beds to help discharge patients
        from hospitals.

    Promoting Better Health and Preventing Illness

    The government created the Ministry of Health Promotion, the first in the
history of Ontario, to develop programs to promote healthy and active living.
With this Budget, the government is continuing to prioritize health promotion
by:
    -   Providing an additional $2.5 million to the Communities in Action
        Fund, raising the total to $7.5 million per year, to encourage
        Ontarians to participate in sports and other physical activities; and
    -   Investing $41 million in community infrastructure and multi-use
        facilities to promote physical activity, sports and wellness in
        various communities throughout Ontario.

    The government is further investing in public health by:
    -   Providing approximately $20 million, growing to approximately
        $40 million per year, for colorectal cancer screening for those aged
        50 and older - the first program of its kind in Canada;
    -   Providing funding for the Ontario Agency for Health Protection and
        Promotion, an arm's length centre of excellence that would provide
        support during any future public health emergency;
    -   Providing $1.5 million in 2008-09 - growing to $2.5 million by 2010-
        11 - to enhance regional capacity of communities to respond to
        HIV/AIDS; and
    -   Investing approximately $7 million to expand addiction treatment
        programs. The government is also investing $1 million for a one-year
        pilot project in Stratford to target producers and traffickers of
        methamphetamine (crystal meth) and dismantle their labs.

    Improving Efficiency and System Integration to Meet Patients' Needs

    The Ontario Government is implementing innovative strategies to provide
health care services and improve patient care.

    With this Budget, the government is providing an additional $64 million in
2007-08 to promote its comprehensive e-Health strategy including:
    -   Continued progress towards a secure electronic health record for all
        Ontarians, giving providers the information they need to care for
        patients safely, no matter where they treat them; and
    -   Expanding systems that provide drug and lab information as well as
        diagnostic images while protecting the security and privacy of
        patient information.

    The government is also taking action to modernize and upgrade Ontario's
health care facilities and equipment, and expand hospital capacity. Through
ReNew Ontario, the government is investing more than $5 billion in health care
infrastructure by 2010.

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               Ce budget est également disponible en français.

          You can access the 2007 Budget and all related budgets at
             www.ontariobudget.ca or by calling 1-800-337-7222.
    -------------------------------------------------------------------------



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    2007 Ontario Budget                                          Backgrounder
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                                                               March 22, 2007

                    EXPANDING OPPORTUNITIES FOR STUDENTS
                Investing in Programs to Reach Every Student

    Success for Students

    The McGuinty government is dedicated to building a vibrant, publicly
funded education system to develop Ontario's students into the best-educated,
most highly skilled workforce. It is continuing its plan for better student
achievement and higher secondary school graduation rates by:

    -   Investing $18.3 billion in Grants for Student Needs (GSN) funding to
        school boards in the 2007-08 school year, an increase of $781 million
        from last year, and of more than 17 per cent from 2003-04. By 2008-
        09, GSN funding will rise to $18.6 billion;
    -   Average per-student funding will increase to an estimated $9,669 by
        2008-09, up $1,749 or 22 per cent from 2003-04;
    -   Providing French-language boards with more than $1 billion in
        2007-08, an increase of $73.5 million or 7.2 per cent from 2006-07;
    -   Investing $28 million in 2007-08 for elementary specialist teachers,
        bringing the total to an additional 1,900 teachers over the last
        three years;
    -   Investing $4.5 million to train almost 25,000 teachers and
        $1.2 million to train vice-principals and principals to address
        bullying;
    -   Launching the Aboriginal Education Strategy and investing $13 million
        to improve achievement by First Nations, Inuit and Métis students;
        and
    -   Providing more than $4 million for school boards to buy arts
        materials and musical instruments.

    The government's targeted investments and strategies are working and
producing positive outcomes for Ontario students, as demonstrated by the major
achievements to date:

    -   Higher test scores:
        -  In the 2005-06 school year, 64 per cent of Ontario Grades 3 and 6
           students met or exceeded provincial standards in reading, writing
           and math, up from 54 per cent in 2002-03.
        -  The pass rate on the Grade 10 literacy test increased from 72 per
           cent in 2002-03 to 84 per cent in 2005-06 for English-language
           students;
    -   Smaller primary class sizes in all of Ontario's 4,000 elementary
        schools. In 2006-07, 65 per cent of primary classes had 20 students
        or fewer, compared to 31 per cent in 2003-04, and 93 per cent have 23
        students or fewer;
    -   Increase in high school graduation rate, from 68 per cent in 2003-04
        to 73 per cent in 2005-06. Ontario's high schools are on track to
        meet the government's 85 per cent graduation rate target by 2010-11;
    -   Introduction of the Good Places to Learn initiative - a school
        renewal program to help fund $4 billion of much-needed repairs,
        renovations and new school construction around the province. Under
        this program, almost 6,800 school building improvement projects have
        been completed or are underway;
    -   Establishment of a working partnership with public education
        providers by bringing labour stability to public education in the
        province; and
    -   Increasing the number of teachers by providing funds to hire
        approximately 1,200 new elementary-school teachers this school year,
        bringing the total to 4,800 more elementary-school teachers since
        October 2003.

    Reaching Higher in Postsecondary Education

    Under the Reaching Higher plan, the McGuinty government is investing a
cumulative $6.2 billion in the postsecondary education sector by 2009-10. The
government is continuing to improve quality, access and accountability by:

    -   Raising total base operating grants to colleges and universities to
        $4.0 billion in 2007-08;
    -   Announcing an additional $390 million to postsecondary institutions
        for more classroom space, higher enrolments and more training;
    -   By 2007-08, supporting graduate education with $170 million in
        additional funding and expanding graduate spaces by 12,000;
    -   Providing more than $580 million in student financial aid through the
        Ontario Student Assistance Program in 2007-08;
    -   Increasing first-year undergraduate medical enrolment by 23 per cent
        by 2009-10 over 2004-05; and
    -   Committing $55 million by 2009-10 to create more opportunities for
        francophones and those traditionally underrepresented in
        postsecondary education.

    Reaching Higher has already created positive change in postsecondary
education by:

    -   Increasing full-time enrolment by 86,000 since 2002-03, a 22-per-cent
        increase;
    -   Increasing special access funding by $20 million in 2006-07 for
        small, northern and rural colleges, bringing total funding to
        $65 million;
    -   Re-introducing upfront grants, benefiting nearly 60,000 students and
        limiting student debt to $7,000 per completed year of study. In 2006-
        07, 145,000 students are benefiting from enhancements over the last
        three years to student aid; and
    -   Capped tuition increases - following two years of tuition freezes -
        at an average of five per cent annually, or $100 for 90 per cent of
        college students and $200 for 70 per cent of university students.

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               Ce budget est également disponible en français.

          You can access the 2007 Budget and all related budgets at
             www.ontariobudget.ca or by calling 1-800-337-7222.
    ------------------------------------------------------------------------



    -------------------------------------------------------------------------
    2007 Ontario Budget                                          Backgrounder
    -------------------------------------------------------------------------
                                                               March 22, 2007

               EXPANDING OPPORTUNITIES FOR BUSINESS IN ONTARIO
     Investing in Ontario's Capacity for Growth and Economic Prosperity

    The McGuinty government continues to pursue a balanced economic plan,
investing strategically to strengthen the capacity of Ontario's people and
business to compete in the global economy. The 2007 Budget announces measures
that focus on fostering a strong business climate, enhancing research and
innovation, building a skilled workforce and strengthening key economic
sectors.

    Fostering a Strong Business Climate

    To enhance the competitiveness of Ontario's tax system and strengthen its
business environment, the government is proposing to:

    -   Accelerate the elimination of the capital tax to July 1, 2010, from
        January 1, 2012;
    -   Reduce high Business Education Taxes by $540 million, benefiting more
        than 500,000 businesses in 321 municipalities across the province;
    -   Seek the enactment of legislation introduced last fall to streamline
        the administration of the Province's corporate tax system and
        harmonize with the federal corporate income tax base, which would
        provide Ontario business with a $90 million annual Ontario corporate
        income tax cut, and up to an additional $100 million in annual tax
        compliance savings; and
    -   Provide $2.2 million to the Canadian Youth Business Foundation, which
        helps provide mentoring, financing and business resources to help
        young Canadians create their own successful businesses.
    

    A competitive regulatory framework protects consumers and investors, and
supports a positive business climate and growing economy. The government has
established an Expert Commission on Pensions to make recommendations to ensure
the Province's employment pension system remains sustainable. Gerry Phillips,
as the Minister responsible for securities regulation, will continue to
spearhead Ontario's leadership role in moving toward a common securities
regulator that would sharpen Canada's competitive edge.
    Investments in electricity infrastructure help support and enhance
Ontario's economic competitiveness and quality of life. The McGuinty
government's policies have initiated or supported one of the most ambitious
near-term building programs in North America for new electricity generation.
Since October 2003, about 3,500 megawatts (MW) of new supply have come on-line
and about 8,300 MW of new supply projects are in progress or planned.

    Enhancing Research and Innovation

    The government is committed to expanding Ontario's foundation in
research, innovation and commercialization with investments of $1.7 billion
over five years to 2009-10, including $527 million for the Ontario Research
Fund and $279 million for the Ontario Institute for Cancer Research.
    To ensure that Ontario maintains its competitive tax advantage for
research and development, the government has proposed a 4.5 per cent non-
refundable tax credit for Ontario-based scientific research and experimental
development (SR&ED) expenditures effective for taxation years ending after
2008. This tax credit would replace a deduction that currently provides
$200 million annually in tax support for Ontario-based SR&ED and that would
automatically expire upon corporate income tax base harmonization.

    
    The 2007 Budget is announcing a number of new investments that will help
boost Ontario's capacity to develop and market new environmental technologies,
including:

    -   $21 million to Queen's University, which is working in partnership
        with the private sector to establish a convergence centre for bio-
        products and bio-materials;
    -   $15 million to the Ontario Centres of Excellence, which promote
        linkages between academia and businesses to bring to market energy
        innovations, such as low-carbon technologies;
    -   $6 million to the Ontario BioAuto Council; this multi-industry
        initiative will help position the province as a global leader in
        manufacturing auto parts and other materials from agricultural and
        forestry feedstocks; and
    -   $6 million to Lakehead University, which is building capacity to
        support competitive and sustainable development of Ontario's boreal
        forest.

    Building a Skilled Workforce

    Modernizing and Expanding Ontario's Training System
    To help ensure that Ontario has the skilled tradespeople the economy
requires, the government has introduced initiatives since 2003 to increase
access to apprenticeships, including a 25 to 30 per cent refundable
Apprenticeship Training Tax Credit to encourage businesses to hire and train
apprentices in designated skilled trades. In the 2007 Budget, the government
proposes to extend this tax credit to eligible apprentices who start
employment before January 1, 2012, and add six more eligible trades:

    -   Entertainment industry power technician
    -   Process operator - power
    -   Tractor-trailer commercial driver
    -   Exterior insulated finish systems mechanic
    -   Information technology call centre inside sales agent
    -   Information technology call centre customer care agent.

    The government is already supporting the expansion of apprenticeships by
providing:

    -   $100 million in annual funding to meet the goal of 26,000 new
        registered apprentices by 2007-08;
    -   $4.5 million for 1,500 scholarships of $1,000 and employer signing
        bonuses of $2,000 to help at-risk youth enter apprenticeships; and
    -   $8.25 million for the Ontario Youth Apprenticeship Program, providing
        opportunities for 24,000 students in 2006-07.

    In addition, the government has increased funding to Employment Ontario -
which was launched in January 2007 and will provide seamless and coordinated
training, apprenticeship and other employment services - to nearly $1 billion
annually through the transfer of $525 million under the Canada-Ontario Labour
Market Development Agreement.

    Breaking Down Barriers for New Canadians
    The government is currently spending $146 million annually on services and
new programs to help newcomers get established and accelerate their successful
integration into Ontario's labour market. Current initiatives include:

    -   Providing $53 million this year to help train and assess
        international medical graduates, up from $16 million in 2003;
    -   Investing $53 million annually in English as a Second Language/French
        as a Second Language classes;
    -   Working to implement a pilot Provincial Nominee Program that will
        allow Ontario to nominate individuals for permanent residence, based
        on its labour-market priorities;
    -   Introducing a new six-month internship program in the Ontario Public
        Service and Crown agencies;
    -   A new Fair Access to Regulated Professions Act, 2007, and a first-
        ever Fairness Commissioner; and
    -   Investing $53 million in over 90 innovative bridge-training programs.

    Strengthening Key Economic Sectors

    Manufacturing
    To support Ontario's manufacturing sector, the 2007 Budget announces the
creation of a new Ontario Manufacturing Council that would provide regular
updates to the Minister of Economic Development and Trade on the state of this
sector.
    The government is also lowering the investment project size threshold for
loan applications to enable more small and medium-sized businesses to
participate in the Advanced Manufacturing Investment Strategy to create and
retain jobs. The strategy supports manufacturers who invest in leading-edge
technology and processes, including those that reduce energy use and
environmental emissions.

    Entertainment and Creative Cluster
    Ontario's vibrant artistic and cultural industries contribute to the
economic health of the province and the quality of life of Ontarians. In the
2007 Budget, the government is proposing to enhance certain entertainment
industry tax credits, and to introduce the Status of Ontario's Artists Act,
2007, to recognize the contributions of artists to Ontario's economy and
quality of life. Proposed new investments in support of the cultural sector
and the entertainment and creative cluster include:

    -   $20 million increase in annual funding by 2009-10 to the Ontario
        Trillium Foundation;
    -   $15 million increase in annual funding by 2009-10 to the Ontario Arts
        Council;
    -   $5 million in 2006-07 for Ontario public libraries;
    -   $2.3 million to increase annual funding of the Community Museum
        Operating Grants program, starting in 2007-08;
    -   $5 million in additional funding for the Ontario Media Development
        Corporation, which promotes and leverages investment, jobs and
        content creation in Ontario's cultural media cluster;
    -   $5.5 million to Luminato - Toronto Festival of Arts and Creativity;
        and
    -   An additional $12.5 million in 2006-07 to support the Toronto
        International Film Festival.

    Tourism
    Ontario's tourism industry is an important economic sector, contributing
$6.3 billion in real GDP to the Ontario economy in 2005. The 2007 Budget
contains initiatives that build on the government's commitment to this
industry, including:

    -   Proposing to extend to June 30, 2008, the retail sales tax exemption
        for Destination Marketing Fees, which are used to fund tourism
        marketing;
    -   Providing $35 million to the City of Niagara Falls, which is planning
        the construction of a conference and convention facility; and
    -   Committing an additional $2 million annually to the St. Lawrence
        Parks Commission to support tourism and preserve heritage sites.

    -------------------------------------------------------------------------
               Ce budget est également disponible en français.

          You can access the 2007 Budget and all related budgets at
             www.ontariobudget.ca or by calling 1-800-337-7222.
    -------------------------------------------------------------------------



    -------------------------------------------------------------------------
    2007 Ontario Budget                                          Backgrounder
    -------------------------------------------------------------------------
                                                               March 22, 2007

                EXPANDING OPPORTUNITIES FOR A GREENER ONTARIO
    Investing in a Sustainable, Healthy Environment for Long-Term Prosperity

    The McGuinty government is committed to addressing Ontario's environmental
priorities, including air quality and climate change, as well as ensuring a
sustainable, healthy environment for our future well-being and prosperity.

    This spring, the government will present a plan to establish a greener
economy in Ontario - for now and decades to come. The 2007 Budget announces
close to $125 million in immediate environmental initiatives, including:
    -   Providing homeowners with rebates of up to $150 for home energy
        audits that assess energy consumption, for a total of up to
        $24 million over four years;
    -   Providing $2 million to the Trees Ontario Foundation; accelerated
        tree planting helps clean Ontario's air and remove carbon dioxide;
        and
    -   Allocating $1.5 million for Project Porchlight to enable local
        volunteers to deliver energy-efficient light bulbs to over 500,000
        Ontario homes this summer.

    The government will also allocate more than $200 million over the next
three years to fund further climate change initiatives.
    The nearly $125 million in immediate initiatives and the $200 million for
further climate change initiatives come from Ontario's $586 million share of a
federal trust for clean air and climate change, and build on existing and
ongoing provincial initiatives.

    Growing a Greener Economy

    The government is investing in the research and innovation needed to help
Ontario's automotive sector become a global leader in alternative fuels and
clean car technology. The 2007 Budget announces support for the development of
new environmental technologies, through:
    -   $21 million to Queen's University, which is working in partnership
        with the private sector to establish a convergence centre for bio-
        products and bio-materials;
    -   $15 million to the Ontario Centres of Excellence, which promote
        linkages between academia and businesses to bring to market energy
        innovations, such as low-carbon technologies;
    -   $6 million to the Ontario BioAuto Council; this multi-industry
        initiative will help position the province as a global leader in
        manufacturing auto parts and other materials from agricultural and
        forestry feedstocks;
    -   $6 million to Lakehead University, which is building capacity to
        support competitive and sustainable development of Ontario's boreal
        forest;
    -   $3 million to the University of Ontario Institute of Technology,
        which is developing its capacity in hydrogen technology research; and
    -   $400,000 to the Durham Strategic Energy Alliance, which is an
        organization of industry, academia, local and regional Durham
        governments committed to developing sustainable energy solutions for
        Ontario.
    

    Building Green Communities

    Sustainable Transportation
    New investments in transit across the province through the government's
Move Ontario program will help reduce gridlock, air pollution and greenhouse
gas emissions by providing alternatives to driving. Potentially, these transit
projects will enable 42 million more transit rides in the GTA, resulting in
35 million fewer car trips on Ontario roads and highways each year. Ontario
will provide $352 million to municipalities immediately, based on transit
ridership.
    Ontario is also committing $85 million toward Phase II of York Region's
VIVA transit express bus service, and investing one-third toward the
Kitchener- Waterloo Light Rail Transit system along with federal and municipal
partners.

    Brownfields Reform
    Brownfields are under-developed or abandoned properties, often
contaminated from past industrial or waste disposal activities. The government
is announcing a comprehensive package of legislative and other reforms to
address barriers to brownfield redevelopment and help ensure that the public
interest remains protected.
    Several Ontario communities have a high number of brownfield properties
that may act as a barrier to development and could be returned to productive
use. The government is providing $11 million to Hamilton, Cornwall, Brantford,
St. Catharines and the University of Ottawa.

    
    Energy and Climate Change
    The government remains committed to improving Ontario's air quality and
reducing greenhouse gas emissions by:
    -   Setting targets to double the installed capacity of renewable
        electricity generation by 2025;
    -   Working with neighbouring U.S. jurisdictions to reduce transboundary
        air pollution;
    -   Proposing to extend the retail sales tax rebate for residential
        purchases of solar, wind, micro hydro-electric and geothermal energy
        systems to purchases made before January 1, 2010; and
    -   Supporting the production of ethanol fuel in Ontario through the
        $520 million Ontario Ethanol Growth Fund.

    The government also remains committed to phase out coal-fired electricity
generation in favour of cleaner sources of energy. Over the past three years,
generation from coal plants has fallen by about 30 per cent, representing a
large reduction in greenhouse gas emissions. The phase-out of coal-fired
electricity plants will represent, when complete, a reduction of up to 30
million tonnes of greenhouse gas emissions, the single largest reduction of
emissions in Canada.

    Waste Diversion
    To encourage diversion of materials from Ontario's landfill sites, the
government is streamlining the approval process for pilot projects that
encourage innovative waste technologies and for converting certain types of
waste into alternative fuels. In addition, the government is:
    -   Directing Waste Diversion Ontario to develop and fund diversion
        programs for household hazardous and special materials;
    -   Providing $305,000 to six municipalities - Toronto, Windsor,
        Hamilton, Peel Region, London and Quinte - that are undertaking
        apartment recycling pilot projects; and
    -   Providing $325,000 to the Recycling Council of Ontario, which is
        developing a zero waste toolkit for upcoming community information
        events and working to encourage the use of reusable plastic bags.
    

    Greenbelt and Places to Grow
    The Greenbelt Plan and Places to Grow initiative are central to the
government's commitment to environmental protection and growth planning.
Together, these initiatives will promote sustainable prosperity by helping
manage urban growth and development, while protecting about 1.8 million acres
of environmentally sensitive land.
    The government is providing $2 million to the Rouge Park Alliance, which
works to protect, restore and enhance the natural, scenic and cultural values
of the park.
    The government has provided $25 million to the Friends of the Greenbelt
Foundation, which co-ordinates and funds activities - such as the promotion of
agriculture and viniculture, research, public education, land stewardship and
land acquisition - across the Greenbelt.

    Protecting Ontario's Water

    The McGuinty government recognizes that clean, safe, affordable water is
critical to public health, economic growth and quality of life. This year, the
government will invest $7 million in the new Drinking Water Stewardship
Program under the Clean Water Act, and will invest another $21 million over
the next three years to allow for outreach, education and early action to
protect drinking water sources across the province.

    
    To further ensure the safety of Ontario's drinking water supply, and
protect ground and surface waters, the government is:
    -   Fulfilling all 121 recommendations arising from the Walkerton
        Inquiry; to date, 87 have been implemented and all others are
        underway; and
    -   Continuing its $120 million commitment to fund source water
        protection planning from 2004 to 2008 to protect drinking water
        sources across the province.

    Additionally, Ontario would invest more than $30 million to help restore
and sustain the Great Lakes as part of a proposal to renew the Canada-Ontario
Agreement Respecting the Great Lakes Basin Ecosystem with the federal
government.

    -------------------------------------------------------------------------
               Ce budget est également disponible en français.

          You can access the 2007 Budget and all related budgets at
             www.ontariobudget.ca or by calling 1-800-337-7222.
    -------------------------------------------------------------------------



    -------------------------------------------------------------------------
    2007 Ontario Budget                                          Backgrounder
    -------------------------------------------------------------------------
                                                               March 22, 2007

                EXPANDING OPPORTUNITY FOR ONTARIO COMMUNITIES
    Investing in Prosperity for Rural, Northern and Aboriginal Communities
    

    The McGuinty government is promoting strong and adaptable communities by
investing in strategic infrastructure projects, improving health and education
resources, fostering a positive business climate and working with diverse
communities across the province to address unique local challenges.

    Investing in Communities

    The government is continuing to make investments in communities and
regions across the province that would help foster a positive business climate
and address local challenges. In 2007, the government is investing more than
$1.9 billion in ongoing operating support to municipalities. This includes
$843 million through the Ontario Municipal Partnership Fund, which is
$225 million more than 2004 transfers under its predecessor program, the
Community Reinvestment Fund, an increase of 36 per cent.

    
    Measures in the 2007 Budget that support communities include:
    -   $127 million to municipalities for new affordable housing or to
        rehabilitate existing housing;
    -   Doubling funding for the Rural Infrastructure Investment Initiative
        to $140 million to help rural and small municipalities provide safe
        and reliable local infrastructure;
    -   Investing $10 million in 2007-08 to help expand broadband coverage in
        rural southern Ontario by leveraging community and private-sector
        investment; and
    -   Bringing total investment to $41 million for community infrastructure
        and multi-use facilities to promote physical activity in various
        communities throughout Ontario, including Port Colborne, Ottawa,
        Cobourg and Moosonee.
    

    The plan to cut high Business Education Tax rates worth $540 million
after seven years will also benefit rural Ontario. Businesses in rural
municipalities will enjoy an average 26 per cent reduction in provincial
Business Education Taxes by 2014.

    Infrastructure
    Under ReNew Ontario, the government has developed the Southern Ontario
Highways Program that sets out investments totaling $3.4 billion to expand and
improve the provincial highway network in southern Ontario. This will provide
for construction of an additional 130 kilometres of highway; replacement of 64
bridges; and repair of 1,600 kilometres of highway and 200 bridges. In 2007-
08, the government is investing $899 million in Ontario's southern highway
network.

    Local Health Care
    Patients in both urban and rural settings will benefit from 150 new
Family Health Teams (FHT) that are planned to be fully operational across the
province by the end of 2007-08. FHTs will provide care to more than
2.5 million Ontarians in 112 communities. Also, by 2007-08, the number of
Community Health Centres (CHCs) will rise to 76 from the current 54, and the
number of satellite CHCs will rise to 27 from the current 10. Together, these
CHCs will serve an additional 200,000 people.
    Furthermore, through ReNew Ontario, the government will be funding the
construction of new cancer treatment programs in Barrie, Newmarket, St.
Catharines and Sault Ste. Marie, as well as renovating and expanding existing
centres in Ottawa and Kingston.

    
    Community Justice
    To help make Ontario's communities safer, the 2007 Budget is announcing
additional funding for 2007-08 of $27 million for key initiatives in the
justice sector, including:
    -   $51 million over three years, starting in 2007-08, for Legal Aid
        Ontario to ensure access to additional services for vulnerable
        Ontarians;
    -   $4 million for 30 new justices of the peace to assist municipalities
        in addressing backlogs relating to Provincial Offences Act matters;
    -   $1 million for a one-year pilot project in Stratford to target
        producers and traffickers of methamphetamine (crystal meth) and
        dismantle their labs;
    -   $3 million to modernize the human rights system; and
    -   $4 million to promote a healthier, more diversified correctional
        services workplace.

    Agriculture
    The government is working to maintain a strong, sustainable farm sector in
Ontario. In the 2007-08 fiscal year, base expenditures by the Ontario Ministry
of Agriculture, Food and Rural Affairs will reach a new high of $876 million.

    To encourage increased ethanol production in Ontario, the government is
providing $52.9 million in 2007-08 in capital and operating assistance; this
investment is part of the 12-year, $520 million Ontario Ethanol Growth Fund.
The 2007 Budget is announcing further investments of:
    -   $6 million to the Ontario BioAuto Council; this multi-industry
        initiative will help position the province as a global leader in
        manufacturing auto parts and other materials from agricultural and
        forestry feedstocks;
    -   $2.5 million to help a number of Ontario agri-food organizations that
        fund marketing initiatives for Ontario farm products;
    -   $200,000 to the Organic Council of Ontario, which promotes industry
        development activities; and
    -   $10 million for a strategy to raise consumer awareness and promote
        consumption of food produced in Ontario.

    Municipal Water and Wastewater Systems
    The provincial and federal governments have committed almost $380 million
to help 60 small and rural municipalities across the province upgrade their
water and wastewater systems. Funding for clean water and wastewater would
also be available from the government's $140 million Rural Infrastructure
Investment Initiative, which helps rural and small municipalities provide safe
and reliable local infrastructure.

    A Strong Northern Economy

    The Province is investing strategically to support the efforts of northern
communities and businesses committed to transforming the northern economy and
realizing its potential. Key initiatives for building the foundation of the
new northern economy include:
    -   Appointing Dr. Robert Rosehart, President of Wilfrid Laurier
        University, as Northwestern Ontario Economic Facilitator, to work
        with local people and businesses to help inspire a new generation of
        growth in the northwest;
    -   Providing $6 million to Lakehead University, which is building
        capacity to support competitive and sustainable development of
        Ontario's boreal forest;
    -   Investing $2 million in the Northern Centre for Advanced Technology
        in Sudbury; and
    -   Providing an additional $3.6 million in 2007-08 to increase the
        operating subsidy of the Ontario Northland Transportation Commission
        to $19.7 million, which will allow the Commission to improve rail
        service.
    

    In addition, the Province will continue to work with the federal
government, the Northern Ontario Heritage Fund Corporation and other partners
to establish the Molecular Medicine Research Centre in Thunder Bay.
    The government will work to expand broadband and cellular services,
through the Northern Ontario Heritage Fund Corporation, to remote areas of
northern Ontario to connect most of northern Ontario within three years.
    The government's policies have also set in motion initiatives to promote
investments in electricity projects in the north, including an energy-
efficient, combined heat and power cogeneration project in Sault Ste. Marie,
which, together with cogeneration projects in other regions, will contribute
414 megawatts to Ontario's electricity supply.
    Northern communities will also benefit from the plan to cut high Business
Education Tax rates. Businesses in northern municipalities will enjoy an
average 32 per cent reduction in provincial business education taxes by 2014.

    Infrastructure
    The ReNew Ontario plan has also led to the development of the Northern
Ontario Highways Program, including investments totaling $1.8 billion for the
renewal and expansion of the highway network in northern Ontario. This funding
will allow for the expansion of the northern highway system by 64 kilometres;
the construction of 54 bridges; and the repair of 2,000 kilometres of highway
and 200 bridges. In 2007-08, the government is investing $468 million in
Ontario's northern highway network.

    
    Aboriginal Communities

    The McGuinty government is working on initiatives to close the
socioeconomic gap between Aboriginal Peoples and other Ontarians, including:
    -   Launching the Aboriginal Education Strategy and investing $13 million
        to improve achievement by First Nations, Inuit and Métis students;
    -   Providing $80 million in funding for up to 1,100 off-reserve housing
        units for aboriginal families, that the government would allocate in
        partnership with aboriginal communities; and
    -   Investing $2 million to support the implementation of "Keeping the
        Land, a Land Use Strategy" for the Whitefeather Forest in Ontario's
        Far North in collaboration with the Pikangikum community.

    -------------------------------------------------------------------------
               Ce budget est également disponible en français.

          You can access the 2007 Budget and all related budgets at
             www.ontariobudget.ca or by calling 1-800-337-7222.
    -------------------------------------------------------------------------



    -------------------------------------------------------------------------
    2007 Ontario Budget                                          Backgrounder
    -------------------------------------------------------------------------
                                                               March 22, 2007

            EXPANDING PROSPERITY THROUGH ONTARIO'S INFRASTRUCTURE
      Building on Infrastructure Investments to Strengthen the Province
    

    To position Ontario as the most productive economy and progressive
society in North America, the McGuinty government has invested and will
continue to strategically invest in its infrastructure.
    In May 2005, the government launched ReNew Ontario, a strategic five-year
infrastructure plan to invest more than $30 billion in the repair,
revitalization and expansion of Ontario's public infrastructure by 2010. The
plan involves a coordinated and longer-term approach to public infrastructure
investment in schools and hospitals, as well as water and wastewater systems
and transportation infrastructure, including public transit, highways, roads,
bridges and border crossings.
    This Budget builds on the government's infrastructure investments by
providing $5.9 billion in 2007-08. Highlights include investments in health
care, education and facilities for vulnerable populations; rural and northern
communications; water and wastewater systems; and transit and transportation
infrastructure.

    
    Investing in Community and Social Infrastructure

    Health Care
    Through the ReNew Ontario plan, the government is investing more than
$5 billion in health care infrastructure by 2010. These targeted capital
investments include:
    -   Funding more than 100 major projects to build new hospitals,
        modernize older hospitals, and reduce wait times; this includes
        building new hospitals in Brampton, North Bay, and Smiths Falls, and
        a project to replace Mental Health Centre Penetanguishene's Oak
        Ridges facility;
    -   Investing more than $200 million in new and upgraded medical and
        diagnostic equipment;
    -   Investing $50 million to increase the number of spaces in Ontario's
        medical schools; and
    -   Funding the construction of new cancer treatment programs in Barrie,
        Newmarket, St. Catharines and Sault Ste. Marie, as well as renovating
        and expanding existing centres in Ottawa and Kingston.

    Education
    Through ReNew Ontario, the government is investing more than $10 billion
to renew and expand schools and postsecondary institutions by 2010. Key
elements of this strategy include:
    -   Establishing the Good Places to Learn initiative, which will provide
        approximately $4 billion to school boards to help them address the
        backlog of repairs and build new schools; currently, almost 6,800
        projects have been completed or are underway in schools across the
        province;
    -   Investing approximately $1.4 billion for planned school construction
        and to accommodate projected new enrolment growth;
    -   Providing $1.5 billion to school boards for ongoing renewal of school
        facilities;
    -   Providing $1.8 billion to support completed school construction;
    -   Investing $540 million to renew university and college facilities and
        buy new equipment;
    -   Providing an additional $390 million to postsecondary institutions to
        help with more classroom space, high enrolments and more training;
        and
    -   Committing $550 million to create 14,000 new spaces in graduate
        programs across Ontario.

    Vulnerable Populations
    To meet the needs of Ontario's most vulnerable citizens, the government is
investing in facilities and agencies that support vulnerable populations. The
2007 Budget is announcing $48 million in 2006-07 to support social and
community infrastructure improvements, increasing the capacity of the social
sector to provide quality services. Investments would include:
    -   $10 million for hospices;
    -   $5 million for community citizenship centres;
    -   $15 million for community recreation centres; and
    -   $18 million in support for vulnerable populations, including
        developmental services.

    In addition, the government is providing $127 million to municipalities
for new affordable housing or to rehabilitate existing housing and $80 million
in funding for up to 1,100 off-reserve housing units for aboriginal families
that the government would allocate in partnership with aboriginal communities.
The government is also investing over $70 million for more than 3,000 social
infrastructure projects and $42 million in community infrastructure projects
through the 2006 Fall Economic Statement Economic Stimulus package.

    Investing in Communications Infrastructure

    The government is investing in modern and effective public communications
infrastructure, and providing new ways of delivering key government services
across the province, including:
    -   Expanding broadband and cellular services, through the Northern
        Ontario Heritage Fund Corporation, to remote areas of northern
        Ontario to connect most of northern Ontario within three years;
    -   Investing $10 million in 2007-08 to help expand broadband coverage in
        rural southern Ontario by leveraging community and private-sector
        investment;
    -   Investing in electronic service delivery to citizens and business as
        part of the e-Government initiative; and
    -   Providing an additional $64 million in 2007-08 to promote its
        comprehensive e-Health strategy, which uses modern information
        technology to better connect the entire health care system.
    

    Investing in Ontario's Water and Wastewater Systems

    To ensure Ontarians can continue to rely on clean, safe drinking water,
the government is investing almost $1 billion by 2010 for infrastructure
initiatives that support clean water and the environment.
    Since 2003, over $1.2 billion in financing has been committed through
Infrastructure Ontario's OSIFA loan program for municipal water and wastewater
infrastructure projects. Almost $380 million has been committed by the federal
and provincial governments under the Canada-Ontario Municipal Rural
Infrastructure Fund to help 60 small and rural municipalities upgrade their
water and wastewater systems.
    In addition, the government is doubling funding for the Rural
Infrastructure Investment Initiative to $140 million to help rural and small
municipalities provide safe and reliable local infrastructure, including water
and wastewater systems.

    Promoting Investments in Electricity Infrastructure

    Investments in Ontario's electricity infrastructure support and enhance
the province's competitiveness and quality of life. The government has
directed the Ontario Power Authority to produce an Integrated Power System
Plan to ensure long-term supply adequacy. The plan, which has a 20-year
horizon, will integrate investments in new renewable energy sources,
conservation and demand management, and new or refurbished nuclear generating
capacity, as well as investments in Ontario's transmission infrastructure.
This includes setting targets to double the province's renewable energy
sources by 2025 to 15,700 megawatts.
    The McGuinty government's policies have initiated or supported one of the
most ambitious near-term building programs in North America for new
electricity generation. About $11.5 billion in investments are being made in
projects in progress for new and refurbished generation. Since October 2003,
about 3,500 megawatts (MW) of new supply have come on-line and an additional
about 8,300 MW of new supply projects are in progress or planned.

    
    Investing in Transportation Infrastructure

    Roads and Highways
    In the 2007-08 fiscal year, Ontario will invest $1.7 billion in the
provincial highway system.

    Ontario recently announced progress on highway priorities such as:
    -   $55 million to widen Highway 7 in Durham Region;
    -   $250 million to extend Highway 404 by 13 kilometres; and
    -   Providing an environmental assessment for an eastward extension of
        Highway 407 to Highway 35/115; the approximate distance of this
        extension, including two north-south connections to Highway 401,
        would be approximately 67 kilometres.

    Other new projects include:
    -   Adding new high occupancy vehicle lanes on sections of Highways 400
        and 427;
    -   Widening Highway 10 in Caledon, Highway 401 in Kingston and Highway
        417 in Ottawa;
    -   Implementing new safety and operational improvements to Highway 17
        between Thunder Bay and Kenora; and
    -   Proceeding with a new alignment of Highway 26 between Collingwood and
        Wasaga Beach to improve traffic flow and safety.

    Under ReNew Ontario, the government has developed the Southern Ontario
Highways Program and the Northern Ontario Highways Program, which set out a
total of $5.2 billion in investments to expand and improve the provincial
highway network in Ontario. This funding will provide for construction of an
additional 194 kilometres of highway; construction of 118 bridges; and repair
of 3,600 kilometres of highway and 400 bridges. In 2007-08, the government is
investing $899 million in Ontario's southern highway network and $468 million
in Ontario's northern highway network.

    Transit and Regional Transportation
    Through the government's $1.2 billion Move Ontario initiative, the
government is providing:
    -   $670 million through the Move Ontario Trust to Toronto and York
        Region for new subway construction;
    -   $95 million to the City of Brampton for transit expansion;
    -   $65 million to the City of Mississauga for transit expansion; and
    -   $7 million to York Region towards detailed planning for Phase II of
        VIVA Transit express bus service.
    

    The federal government recently announced almost $1 billion in support of
Move Ontario, as well as Phase II of VIVA and Durham Region's plan for rapid
transit on higher-demand corridors. Ontario is also contributing $85 million
to Phase II of VIVA and $2.5 million to Durham Region's plan.
    In 2006-07, the government will invest $352 million for transit
infrastructure and capital, distributed to municipalities on the basis of
ridership.
    The government has also made other investments in the Toronto Transit
Commission to include a one-third contribution under the $1 billion Canada
Strategic Infrastructure Fund, to modernize and expand bus, streetcar and
subway services in Toronto. In this Budget, the government is providing
$200 million towards these investments.
    The government is committed to working with its municipal, regional and
federal partners to complete the technical studies and environmental
assessment for the Kitchener-Waterloo Light Rail Transit system and to support
the cost of one-third of the project.
    Through ReNew Ontario, the government is providing municipalities with
two cents per litre of the provincial gasoline tax as a source of long-term
sustainable funding to support public transit infrastructure. With this
transfer, between October 1, 2006, and September 30, 2007, the government will
provide an estimated $313 million to 86 transit systems in 104 communities
across the province. By 2010, the government will have provided over
$1.6 billion in gasoline tax funding to Ontario municipalities for their local
transit priorities.

    
    -------------------------------------------------------------------------
               Ce budget est également disponible en français.

          You can access the 2007 Budget and all related budgets at
             www.ontariobudget.ca or by calling 1-800-337-7222.
    -------------------------------------------------------------------------



    -------------------------------------------------------------------------
    2007 Ontario Budget                                          Backgrounder
    -------------------------------------------------------------------------
                                                               March 22, 2007

                        RESPONSIBLE FISCAL MANAGEMENT
    

    Putting Ontario's Fiscal House in Order

    When the government came to office in 2003, an independent review of
Ontario's finances concluded that the Province was on track to post a
significant deficit in 2003-04 - since confirmed to have been $5.5 billion.
    This fiscal year, despite weaker-than-expected economic growth, the
Province is projected to post its second consecutive surplus. The government
has been able to accomplish this while investing in key priority areas such as
health, education, infrastructure and postsecondary education.
    Ontario has made progress to eliminate the structural deficit through
prudent and disciplined fiscal management, while taking a balanced approach to
investing in key priority areas. The government has exceeded its planned
deficit targets in each fiscal year since 2003-04. In 2004-05, the deficit was
reduced to $1.6 billion, and in 2005-06 the Province posted a surplus of
$0.3 billion.

    On Track to Post Five Consecutive Balanced Budgets

    The medium-term fiscal outlook now projects surpluses of $0.4 billion in
2007-08, $1.3 billion in 2008-09 and $1.6 billion in 2009-10, if the reserve
is not required. This considerable improvement in the Province's fiscal
position means that, if the reserve is not required in 2007-08, the Province
is on track to post five consecutive surpluses between 2005-06 and 2009-10.
    This Province's debt-to-GDP ratio is projected to continue to improve to
17.4 per cent by 2009-10, compared to 25.2 per cent in 2003-04.

    Medium-Term Expense Outlook

    The medium-term expense outlook reflects the new investments announced in
this Budget, as well as those made in the last three budgets, mainly in
priority areas such as health, education, postsecondary education and
training, infrastructure and programs for the vulnerable.
    The medium-term expense outlook continues to maintain the government's
commitment to align growth in expense with revenue growth. Over the medium
term, total expense is projected to rise from $91.2 billion in 2007-08 to
$96.2 billion to 2009-10 - an increase of $5.0 billion. Annual growth in total
expense is expected to average 2.7 per cent over the medium term, which is
less than the 3.4 per cent average annual growth in revenue forecast over this
period.
    Ontario was able to find more than $800 million in savings, and is now
the second lowest among provinces in per-capita spending on administration.

    
    -------------------------------------------------------------------------
    Medium-Term Fiscal Plan and Outlook
    ($ Billions)
    -------------------------------------------------------------------------
                                                                Outlook
                                       Interim      Plan  -------------------
                                       2006-07   2007-08   2008-09   2009-10
                                       --------------------------------------
    Total Revenue                         89.1      91.5      94.7      97.8
    Expense
    Programs
      Health Sector                       36.1      37.9      39.8      41.5
      Education Sector(1)                 11.7      12.4      12.8      12.9
      Postsecondary Education
       and Training Sector                 5.4       5.9       6.0       6.1
      Children's and Social
       Services Sector                    10.5      10.9      11.2      11.3
      Justice Sector                       3.3       3.3       3.4       3.4
      Other Programs                      12.9      11.6      11.2      11.6
                                       --------------------------------------
    Total Programs                        80.0      82.0      84.2      86.8
    Interest on Debt                       8.8       9.1       9.2       9.4
                                       --------------------------------------
    Total Expense                         88.8      91.2      93.4      96.2
                                       --------------------------------------
    Surplus/(Deficit) Before Reserve       0.3       0.4       1.3       1.6
    Reserve                                  -       0.8       1.0       1.3
                                       --------------------------------------
    Surplus/(Deficit)                      0.3      (0.4)      0.3       0.4
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Education sector excludes Teachers' Pension Plan (TPP). Including
        TPP, total education sector expense is projected at $12.1 billion in
        2006-07, $12.8 billion in 2007-08, $12.8 billion in 2008-09 and
        $12.6 billion in 2009-10. Note: Numbers may not add due to rounding.
    -------------------------------------------------------------------------
    

    Ontario's Economic Outlook

    The Ministry of Finance is projecting Ontario real GDP growth of 1.6 per
cent in 2007, up from an estimated 1.3 per cent in 2006. Ontario's growth
rebounded in the fourth quarter of 2006 and is expected to strengthen through
2007 as U.S. demand picks up steam and the lower Canadian dollar and oil
prices stimulate economic activity.
    Real GDP growth is expected to improve over the medium term, with the
Ministry of Finance projecting growth of 2.8 per cent in 2008 and 3.1 per cent
in 2009. Improving growth over the medium term reflects a more favourable
global economic environment along with Ontario's strong fundamentals.
    Business investment spending is expected to lead growth as firms invest
to improve their competitive position. Strong income gains, low interest
rates, and increasing wealth will support growing household spending.
Ontario's trade is expected to turn around as U.S. auto demand picks up and
new auto product lines come on stream.

    Private-sector Economic Forecasts

    Private-sector forecasters generally expect Ontario real GDP growth to
strengthen over the next three years. The average of private sector forecasts
for Ontario real GDP growth is 1.7 per cent in 2007, 2.9 per cent in 2008 and
3.2 per cent in 2009. Ministry of Finance planning assumptions used to develop
the fiscal plan are deliberately prudent, below the private-sector average in
every year.

    270,000 More Jobs Expected Over Next Three Years

    Ontario's job creation is expected to continue as the economy grows.
Since October 2003, 327,000 net new jobs have been created, with full-time
positions accounting for almost three-quarters of the increase. Over the 2007
to 2009 period, 270,000 net new jobs are projected, consistent with private
sector forecasts. The unemployment rate is expected to fall as job gains
exceed the projected increase in labour force.
    Ontario is expected to create an additional 71,000 jobs this year, an
increase of 1.1 per cent. Employment growth is expected to pick up to 1.4 per
cent or 90,000 jobs in 2008 and 1.6 per cent or 109,000 jobs in 2009.

    
    -------------------------------------------------------------------------
               Ce budget est également disponible en français.

          You can access the 2007 Budget and all related budgets at
             www.ontariobudget.ca or by calling 1-800-337-7222.
    -------------------------------------------------------------------------
    





For further information:

For further information: Michael Arbour, Minister's Office, (416)
325-4138; Scott Blodgett, Ministry of Finance, (416) 325-0324

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