Annual Reports

Ontario Ministry of Finance Annual Reports 2002-2003 and 2003-2004

This document includes:
Ministry Overview
Annual Report 2002-2003
Annual Report 2003-2004

MINISTRY OVERVIEW

The Ministry of Finance manages the economic, fiscal and financial policies of the Government of Ontario. To do this, the ministry develops economic and fiscal strategies, plans and manages government operating and capital expenditures, develops tax policies and administers the provincial tax system, and produces the provincial budget. The ministry also manages the Consolidated Revenue Fund, including raising money, establishing the government's financial controls and reports on financial matters. In addition, it develops policies for Ontario's financial services sector and supports the regulation of institutions and intermediaries carrying on business in the province.

The ministry is comprised of seven core businesses:

Tax Policy, Budget and Revenue Operations
Economic, Fiscal and Financial Policy
Financial Services Industry Regulation
Strategic Infrastructure Investments and Partnerships
Government Financing and Debt Management
Internal Business Support
Central Agencies Information and Information Technologies Cluster

ANNUAL REPORT 2003-2004

The ministry recorded a number of significant achievements during 2003-04.

TAX POLICY, BUDGET AND REVENUE OPERATIONS

Issued more than 210,000 Retail Sales Tax rebates on energy efficient appliances and solar panels in 2003-04.
Discontinued the seniors' education property tax credit and tax credit for private schools.
Took the first step toward raising the tobacco tax to the national average.
Ensured all eligible recipients receive tax benefits in a timely manner by directly depositing 73 per cent of all payments for Ontario Child Care Supplements for Working Families to their individual accounts and by ensuring 100 per cent of applicants eligible for the Guaranteed Annual Income System benefit received it within 30 days.
Improved customer service for taxpayers through electronic service delivery initiatives including accepting address changes via the Internet; providing Retail Sales Tax Rulings, Corporations Tax, Employer Health Tax Bulletins online; an e-mail broadcast subscription service; and a website feedback/survey tool.

ECONOMIC, FISCAL AND FINANCIAL POLICY

Improved fiscal and financial management through the implementation of the Integrated Financial Information System (IFIS) in 21 provincial government ministries and central agencies.
Delivered more than 5,300 training days for Ontario government staff in the application of modern controllership principles; implemented a multi-year funding framework for hospitals, colleges, universities and school boards.
Introduced amendments to the Audit Act to make the entire public sector more transparent and accountable to the people of Ontario.
Received an unqualified opinion from the Provincial Auditor on the 2002-03 Public Accounts.
Introduced the Fiscal Responsibility Act, 2003, to begin addressing the deficit through the roll back of tax incentives to corporations.
Continued to work with the federal government on long-term, sustainable funding arrangements for health care.
Participated in the provincial/territorial steering committee to move toward national securities regulation including national stakeholder consultations.

FINANCIAL SERVICES INDUSTRY REGULATION PROGRAM

Developed cost-saving measures so that automobile insurance companies could pass on an average 10 per cent rate reduction to consumers upon renewal.

ONTARIO FINANCING AUTHORITY

Saved $129 million from borrowing, money market and debt management activities.
Achieved Ontario Savings Bonds sales of $3.8 billion, the second highest sales in the history of Canadian provincial bond issues.
Provided financial analysis, modeling and related advice to the government on electricity sector financial issues.

ONTARIO STRATEGIC INFRASTRUCTURE FINANCING AUTHORITY

Created the Ontario Municipal Economic Infrastructure Financing Authority (subsequently renamed the Ontario Strategic Infrastructure Financing Authority) as an innovative financing vehicle that can be used by municipalities and other broader public sector partners to renew and build critical public infrastructure assets.
Approved 88 communities across Ontario as eligible for the authority's low-cost, longer term loans, totalling up to $1 billion aimed at helping municipalities to improve their clean water facilities, sewage and waste management infrastructure, municipal roads and bridges, and public transit.

	Ministry Expenditures ($ millions)
		2003-2004 Actual
Operating	Ministry Expenditures	1,255
	Interest on Debt	9,604
	Community Reinvestment Fund*	651
	Electricity Consumer Price Protection Fund	253
	Power Purchases **	797
Capital ***		5
Staff Strength (as of Mar. 31, 2004)		4,187.3

NOTES:

* Replaced by Ontario Municipal Partnership Fund (OMPF) March 31, 2005. Municipalities operate on a calendar year fiscal cycle. The 2003-04 Actual of $651 million reflects three-quarters of calendar 2003 and one quarter of calendar 2004, plus $51 million in Community Reinvestment Fund (CRF) reconciliation payments.
** Both revenues and expenditures associated with power purchase contracts entered into by the former Ontario Hydro are now consolidated into the province's accounts on a separate line-by-line basis.
*** Starting in 2002-2003, major tangible capital assets owned by provincial ministries (land, buildings and transportation infrastructure) are accounted for on a full accrual accounting basis. Other tangible capital assets owned by provincial ministries will continue to be accounted for as expense in the year of acquisition or construction. All capital assets owned by consolidated government organizations are accounted for on a full accrual basis.

The ministry recorded a number of significant achievements during 2002-03.

ANNUAL REPORT 2002-2003

TAX POLICY, BUDGET AND REVENUE OPERATIONS

Encouraged investment and economic growth through the reduction in the small business corporate tax from 6.0 per cent to 5.5 per cent effective January 1, 2003.
Ensured the fairness and integrity of the provincial tax system and the stability of the tax base by engaging the federal government to begin development of a new federalprovincial relationship on the Tax Collection Agreement; incorporated recommendations from the Small Business Advisory Committee into the 2003 Budget; and developed Service Commitments and Standards in Tax Administration.

ECONOMIC, FISCAL AND FINANCIAL POLICY

Balanced the budget in 2002-2003.
Improved fiscal and financial management practices including the development and updating of over 100 policies, guidelines and toolkits.
Implemented the Integrated Financial Information System (IFIS) in nine provincial government ministries and central agencies.
Received an Unqualified Opinion from the Provincial Auditor on the 2001-02 Public Accounts in November 2002.
Cut business education property taxes by $67 million in 2002 in order to make Ontario more competitive.
Economy achieved annual real economic growth of 3.9 per cent in 2002.
Economy created 221,000 net new jobs in the 12 month period ending in March, 2003.
Improved the fairness of the property tax system and the stability of provincialmunicipal financing through the streamlining and consolidation of numerous property tax regulations and the announcement of a review of Municipal Property Assessment Corporation policy and operations.
Ensured investor confidence and promoting strong corporate governance by introducing legislative amendments to securities regulations.
Announced a new Ontario Securities Commission private placement exemption that reduced red tape and made it easier for smaller firms to raise money in Ontario capital markets, without compromising investor protection.

FINANCIAL SERVICES INDUSTRY REGULATION

Continued to ensure only safe and sound financial institutions are permitted to operate in Ontario, thus protecting consumers, by continuing monitoring activities and placing one credit union/caisse populaire under administration in 2002-03.