Ont. to spend $27.5B on roads, schools to boost sagging economy – Metro US

Ont. to spend $27.5B on roads, schools to boost sagging economy

Ontario will be shovelling money out the door in this week’s budget to combat a slowing economy, promising to spend $27.5 billion on roads, schools, hospitals and public transit over the next two years to create and maintain jobs.

Premier Dalton McGuinty said the huge infrastructure investment, to be detailed in Thursday’s provincial budget, will be topped up with another $5 billion from the federal government and help create 300,000 jobs.

“One of our responsibilities that we want to continue to deliver on through our budget is to strengthen Ontario so we can seize the new possibilities that will be there for us when this recession does, in fact, come to an end,” said McGuinty, whose province is facing an $18-billion deficit over two years.

The funding is “a big number, but it needs to be done,” he said. “Inaction is not an option.”

McGuinty declined to provide details about which projects will get new money, saying some are still being negotiated with Ottawa and others will be revealed in the budget.

Transportation projects will receive the biggest chunk of the money at $9 billion, followed by health care at $7 billion and education at $4 billion.

TD economist Derek Burleton called the promised funding a “significant injection.”

“It’s a significant ramping up from infrastructure trends over the last couple of years that should help to support the economy through this difficult period,” Burleton said.

“The one knock against it is that often there’s difficulty spending the money as quickly as one might expect.”

The investment, he added, won’t be enough to pull Ontario out of the economic crisis, but “it helps sell the budget” and sets up the province for prosperity in the longer-term.

“It will create some employment that otherwise wouldn’t have been created, but the real stimulus happens when the U.S. economy pulls out of recession,” Burleton said.

McGuinty’s announcement follows promises by Ottawa to spend $40 billion over two years on measures to kickstart the economy – including infrastructure, social housing, home retrofits, railways and tourism.

The federal Conservative government has come under fire for inadequate oversight as it tried to get infrastructure spending out the door quickly, but McGuinty vowed that won’t happen in Ontario.

“It’s a lot of money and we want to get it out the door in short order,” McGuinty said.

“Obviously we’re going to be as rigorous as we possibly can be to ensure that taxpayers are being served well, the money’s being used wisely, and it’s creating the jobs we want to have created.”

The plan also means the province can finally start addressing its infrastructure deficit and help combat growing fears about the state of the economy, said Henry Jacek, a politics professor at McMaster University in Hamilton.

“What governments are trying to do, whether in Ottawa, Queen’s Park or Washington, they’re trying to break this vicious cycle of fear that we’re in right now, where people are afraid to spend money,” Jacek said.

“It’s a lot more desperate than people probably realize, so we’ve got to do something dramatic to try to turn this all around, because if we don’t do it, every day will get worse.”

Construction worker Ray Mouat is hopeful the investment will allow him to continue working for several more years, but said the government should also be thinking longer-term.

“I’d like to see them throw more money into the apprenticing program too, because we are losing a lot of our skilled people,” Mouat said.

“They’re getting older, they’re retiring and you’ll see a lot of 65-to 70-year-old men working on the job site because you’re not getting the skilled work right now.”