CHAPTER III: FISCAL OUTLOOK
SECTION A: ONTARIO’S FISCAL OUTLOOK
The government has taken decisive measures to reduce the impact on Ontario of the severe global recession and financial crisis by making substantial investments in infrastructure, supporting the automotive sector, investing in skills training, and sustaining public services. The latest economic forecasts indicate that the Ontario economy is beginning to stabilize, having benefited from the government’s stimulus initiatives and increased household spending.
The government is now projecting deficits of $24.7 billion in 2009–10, $21.1 billion in 2010–11 and $19.4 billion in 2011–12. These projections reflect a reduction in anticipated revenues due to lower 2008–09 results and a weaker economy in 2009. The decision to run a deficit also demonstrates the government’s commitment to help Ontario families during these difficult times by maintaining key public services while also positioning the province to be competitive in the global market.
This chapter provides an update to the fiscal outlook for 2009–10 and the medium-term forecast for 2010–11 and 2011–12.
2009–10 FISCAL PERFORMANCE
The fiscal outlook for 2009–10 reflects a weaker Ontario economy than was projected in the 2009 Budget, and increased spending due to the impact of the global economic downturn. While signs of economic stabilization are emerging, Ontario is still experiencing the effects of the global recession. Total revenue in 2009–10 is currently projected to be $90.2 billion, a decrease of $5.8 billion or 6.0 per cent from the 2009 Budget forecast, reflecting the effect of a weak global economy and its impact on Ontario.
Total expense in 2009–10 is currently estimated to be $113.7 billion, 4.4 per cent higher than the 2009 Budget forecast. Ongoing government measures to maintain services and lessen the effect of the economic crisis have increased spending on vital programs within the Ministry of Health and Long-Term Care, Ministry of Community and Social Services and Ministry of Training, Colleges and Universities. Higher expenses have also been driven by time-limited support to the automotive sector, additional spending for social assistance and the Province’s response to the H1N1 flu virus.
| Budget Plan | Current Outlook | In-Year Change | |
|---|---|---|---|
| Revenue | 95,980 | 90,180 | (5,800) |
| Expense | |||
| Programs | 99,579 | 104,290 | 4,711 |
| Interest on Debt | 9,301 | 9,406 | 105 |
| Total Expense | 108,880 | 113,696 | 4,816 |
| Reserve | 1,200 | 1,200 | – |
| Surplus/(Deficit) | (14,100) | (24,716) | (10,616) |
The 2009 Budget plan also included a $1.2 billion reserve to protect against adverse changes in the Province’s revenue and expense outlook, including those resulting from changes in Ontario’s economic performance. The Province continues to maintain this reserve, as well as significant contingency funds, in recognition of the continued economic uncertainty that could further impact Ontario’s finances.
2009–10 REVENUE CHANGES SINCE 2009 BUDGET
The global recession and financial crisis that have severely affected the world economy over the past year continue to affect Ontario’s revenues. The 2009–10 revenue outlook, at $90.2 billion, is $5.8 billion below the 2009 Budget forecast, largely reflecting a weaker economy in 2009 and new information from the ongoing processing of 2008 personal and corporate tax returns.
| Taxation Revenue Changes | |
|---|---|
| Corporations Tax | (2,650) |
| Personal Income Tax | (2,435) |
| Retail Sales Tax | (500) |
| Ontario Health Premium | (125) |
| Employer Health Tax | (90) |
| Total Revenue Changes Since Budget | (5,800) |
DETAILS OF 2009–10 IN–YEAR REVENUE CHANGES
Key revenue changes from the 2009 Budget forecast include:
- Corporations Tax (CT) revenues are forecast to be $2,650 million, or 31.1 per cent, lower largely due to the impact of the global recession and financial crisis on corporate income taxes in 2008. Since the 2009 Budget, processing of 2008 corporate tax returns lowered estimated 2008–09 revenues, which lowers the base upon which projected changes are applied in forecasting revenues for 2009–10 and beyond. In addition, the most recent information from tax return processing has further lowered estimated CT revenues, resulting in a decrease of $1.2 billion as past-year adjustments are included in the current year. There is a relatively high degree of uncertainty in forecasting corporate taxes, reflecting both the inherent volatility of these taxes and information lags with respect to current corporate performance.
- Personal Income Tax (PIT) revenues are projected to be $2,435 million, or 9.7 per cent, lower due to weaker 2009 wages and salaries and lower revenues from processing past-year personal income tax returns. Since the 2009 Budget, processing of tax returns has yielded 2008–09 revenues below Budget estimates, lowering the base upon which projected changes are applied for 2009–10 and beyond. As well, new information from tax return processing results in a decrease of $450 million as past-year adjustments are included in the current year.
- Retail Sales Tax (RST) revenues are expected to be $500 million, or 2.8 per cent, lower due to the weaker outlook for retail sales in 2009 and a lower 2008–09 retail sales tax revenue base than estimated at the time of the Budget.
- Ontario Health Premium (OHP) revenues are expected to be $125 million, or 4.4 per cent, lower, reflecting weaker 2009 wages and salaries and a lower-than-estimated 2008–09 base. As well, new information from tax return processing results in a one-time decrease of $60 million in 2009–10 as past–year adjustments are included in the current year.
- Employer Health Tax (EHT) revenues are projected to be $90 million, or 1.9 per cent, lower, reflecting weaker 2009 wages and salaries, and a lower-than-estimated 2008–09 base upon which the projected changes are applied for 2009–10 and beyond.
2009–10 EXPENSE CHANGES SINCE 2009 BUDGET
Total expense in 2009–10 is currently projected to be $113.7 billion, a net increase of $4.8 billion from the 2009 Budget forecast. This change mainly reflects support to the automotive sector, an increase in the Ministry of Health and Long–Term Care for the Ontario Health Insurance Program, investments in skills training in the Ministry of Training, Colleges and Universities, and additional spending for social assistance due to the increased number of Ontarians requiring income support from the government. These investments have helped cushion the effect of the recession on families and communities across Ontario.
| Program Expense Changes | ||
|---|---|---|
| Non-Core Program Expense Changes | ||
| One-Time Expense | ||
| Automotive Sector Support1 | 4,000.0 | |
| Ministry of Health and Long-Term Care — Province's response to the H1N1 Flu Virus | 650.0 | |
| Total One-Time Expense | 4,650.0 | |
| Additional Funding Related to the Economic Downturn | ||
| Ministry of Training, Colleges and Universities — Labour Market and Training Programs | 294.7 | |
| Ministry of Community and Social Services — Social Assistance | 254.2 | |
| Ministry of Education: School Boards — Lower-than-Forecast Education Property Tax Revenues | 30.0 | |
| Total Additional Funding Related to the Economic Downturn | 578.9 | |
| Total Non-Core Program Expense Changes | 5,228.9 | |
| Core Program Expense Changes | ||
| Ministry of Health and Long-Term Care — OHIP Increase | 700.0 | |
| Ministry of Training, Colleges and Universities — OSAP and Enrolment Pressures | 95.0 | |
| All Other Core Program Expense | 16.9 | |
| Total Core Program Expense Changes | 811.9 | |
Net Changes to Contingency Funds |
(1,330.0) |
|
| Total Program Expense Changes | 4,710.9 | |
| Interest on Debt | 105.0 | |
| Total In-Year Expense Changes Since Budget | 4,815.9 |
- 1 As published in the First Quarter Ontario Finances.
- Note: Numbers may not add due to rounding.
Details of 2009–10 In-Year Expense Changes
The majority of changes in Provincial program spending since the 2009 Budget are related to non-core program expense — mainly time-limited investments being made to protect and create jobs for Ontarians while also maintaining key public services. It is essential that the government continue to take action to counter the effects of the recession.
The following expense changes have occurred since the 2009 Budget:
Non–Core Program Expense Changes
- Ministry of Finance – Automotive Sector Support: An estimated fiscal impact of $4,000 million, to support the automotive industry, partially offset from the Operating Contingency Fund.
- Ministry of Health and Long–Term Care – Province’s response to the H1N1 flu virus: A one-time increase of up to $650 million for the purchase and delivery of the H1N1 vaccine, supplies and equipment for health care workers, flu centres, testing and communications activities.
- Ministry of Training, Colleges and Universities: An increase of $294.7 million to provide additional support for labour market and training programs, which are experiencing unprecedented demand due to the economic downturn.
- Ministry of Community and Social Services: An increase of $254.2 million for social assistance due to a caseload increase over the previous year, which is related to 2009 unemployment now projected at 9.3 per cent, compared to the 8.8 per cent anticipated in the 2009 Budget.
- Ministry of Education – School Boards: An additional $30 million in the Ministry of Education School Boards’ Net Expense reflects an increase in provincial transfers to school boards to offset lower-than-forecast education property tax revenues.
Core Program Expense Changes
- Ministry of Health and Long–Term Care: An increase of $700 million to accommodate higher–than–anticipated costs in the OHIP plan, due to factors such as increased patient and physician enrolment in primary care models and reimbursements for services provided outside of Ontario.
- Ministry of Training, Colleges and Universities: An increase of $95 million due to enrolment growth and Ontario Student Assistance Program (OSAP) pressures.
- All Other Core Program Expense: A net increase of $16.9 million, mainly as a result of funding for Legal Aid Ontario.
- The Operating Contingency Fund has decreased by a net $1,330 million since the 2009 Budget, mainly reflecting offsets for support to the automotive sector and allocations to fund expense changes in other ministries.
Interest on Debt expense for the year is forecast to increase by $105 million due to the impact of a higher deficit projected for 2009–10.
Federal-Provincial Infrastructure Investments in the 2009 Budget
| Transfer to: | ||
|---|---|---|
| Ministry of Agriculture, Food and Rural Affairs1 | 1,055.8 | |
| Ministry of Training, Colleges and Universities | 489.2 | |
| Ministry of Municipal Affairs and Housing2 | 233.1 | |
| Ministry of Health Promotion | 192.6 | |
| 1,970.8 | ||
| Transfer from: | ||
| Ministry of Energy and Infrastructure | (1,970.8) | |
| Net Change in Expense | – |
- 1 Includes transfer of $14.7 million for Huron Elgin London Clean Water Project, as published in the First Quarter Ontario Finances.
- 2 As published in the First Quarter Ontario Finances.
- Note: Numbers may not add due to rounding.
The 2009 Budget outlined new federal-provincial infrastructure investments totalling $3.2 billion in 2009–10 to preserve and create jobs in Ontario. As contribution agreements were negotiated with delivery partners, the government has moved funding from the Ministry of Energy and Infrastructure to various ministries, as follows:
- Ministry of Agriculture, Food and Rural Affairs: An increase of $1,055.8 million as a result of a transfer from federal–provincial infrastructure funding under the Ministry of Energy and Infrastructure, to support the municipal intake of the Infrastructure Stimulus Fund and Intake Two of the Building Canada Fund – Communities Component. Also includes a transfer for Huron Elgin London Clean Water Project, as published in the First Quarter Ontario Finances.
- Ministry of Training, Colleges and Universities: An increase of $489.2 million as a result of a transfer of federal–provincial infrastructure funding from the Ministry of Energy and Infrastructure to support postsecondary investments, including 49 college and university projects under the Knowledge Infrastructure Program.
- Ministry of Municipal Affairs and Housing: An increase of $233.1 million due to a transfer from the Ministry of Energy and Infrastructure, to support new affordable housing programs for low-income seniors and persons with disabilities, and to extend the Canada–Ontario Affordable Housing Program, as published in the First Quarter Ontario Finances.
- Ministry of Health Promotion: An increase of $192.6 million as a result of a transfer from federal-provincial infrastructure funding under the Ministry of Energy and Infrastructure, to support the Ontario Recreation Program and the Recreational Infrastructure Canada Program in Ontario.
- Ministry of Energy and Infrastructure: A decrease of $1,970.8 million as a result of infrastructure funding transfers to other ministries, including the Ministry of Agriculture, Food and Rural Affairs, Ministry of Training, Colleges and Universities, Ministry of Municipal Affairs and Housing, and Ministry of Health Promotion.
SECTION B: ONTARIO’S MEDIUM-TERM FISCAL OUTLOOK
MEDIUM-TERM REVENUE OUTLOOK
The medium-term revenue forecast reflects the Ministry of Finance’s economic outlook and the estimated impact of government policy decisions. (For more information on Ontario’s economic outlook, see Chapter II: Ontario’s Economic Performance and Outlook.)
| Revenue | Actual 2008–09 |
Projected Outlook | ||
|---|---|---|---|---|
| 2009–10 | 2010–11 | 2011–12 | ||
| Taxation Revenue | 62.4 | 59.1 | 64.3 | 67.4 |
| Government of Canada | 16.6 | 19.2 | 23.0 | 20.5 |
| Income from Government Business Enterprises | 4.0 | 4.3 | 4.5 | 4.8 |
| Other Non-Tax Revenue | 7.5 | 7.6 | 7.6 | 7.4 |
| Total Revenue | 90.5 | 90.2 | 99.3 | 100.0 |
- Note: Numbers may not add due to rounding.
The medium-term Taxation Revenue outlook reflects the latest revenue information and current projections on economic performance. The medium-term revenue outlook also anticipates that corporations will continue to apply some of their 2008 losses against future tax liabilities. Policy measures announced to date, including those subsequent to the 2009 Budget, are also included in the outlook.
The outlook for Government of Canada transfers, Income from Government Business Enterprises and Other Non-Tax Revenue is unchanged from the 2009 Budget. The projection for transfers from the Government of Canada includes $3.0 billion in 2010–11 and $1.3 billion in 2011–12 in support of a move to a more competitive Ontario economy through the implementation of a Harmonized Sales Tax (HST). For more information on these projections, see the 2009 Ontario Budget, Chapter II, Section D, Ontario’s Revenue Outlook.
MEDIUM-TERM REVENUE CHANGES SINCE THE 2009 BUDGET
| Source of Change | 2009–10 | 2010–11 | 2011–12 |
|---|---|---|---|
| Weaker Economic Outlook | (1.8) | (1.9) | (2.0) |
| Lower 2008–09 Revenues | (2.3) | (2.3) | (2.3) |
| Past-Year Tax Return Processing | (1.7) | 0.0 | 0.0 |
| Proposed Enhancements to the Ontario Production Services Tax Credit | (0.1) | (0.1) | (0.1) |
| Total Revenue Changes | (5.8) | (4.3) | (4.4) |
- Note: Numbers may not add due to rounding.
The medium-term forecast for total revenues is lower in each year compared to the 2009 Budget.
A weaker economic outlook, particularly in 2009, lowers revenues from 2009–10 to 2011–12. The economic outlook is discussed in detail in Chapter II: Ontario’s Economic Performance and Outlook.
Lower 2008–09 revenues than assumed in the 2009 Budget resulted in a lower revenue base upon which projected changes are applied, lowering the revenue outlook on an ongoing basis from 2009–10. The ongoing past-year tax return impact noted above also includes the potential application of 2008 corporate losses against future tax liabilities.
New tax return processing information results in a one-time revenue decrease in 2009–10 as past year adjustments are included in the current year.
Proposed Enhancements to the Ontario Production Services Tax Credit are discussed in detail in Chapter V: Creating a More Competitive and Modern Tax System.
MEDIUM–TERM FISCAL OUTLOOK
The recession has been deeper than even the most pessimistic economic forecasters predicted at the time of the 2009 Budget. Ontario has met these economic and fiscal challenges head-on, but uncertainties remain. The medium-term outlook now reflects further deterioration in Ontario revenue as a result of the deep global recession, as well as the impact on expenditures of policy measures taken by the government to help lessen the burden on Ontario’s families and businesses.
| Actual 2008–09 |
Projected Outlook | |||
|---|---|---|---|---|
| 2009–10 | 2010–11 | 2011–12 | ||
| Revenue | 90.5 | 90.2 | 99.3 | 100.0 |
| Expense | ||||
| Programs | 88.3 | 104.3 | 108.6 | 106.3 |
| Interest on Debt | 8.6 | 9.4 | 10.6 | 11.9 |
| Total Expense | 96.9 | 113.7 | 119.2 | 118.2 |
| Reserve | – | 1.2 | 1.2 | 1.2 |
| Surplus/(Deficit) | (6.4) | (24.7) | (21.1) | (19.4) |
- Note: Numbers may not add due to rounding.
The government is projecting deficits of $24.7 billion in 2009–10, $21.1 billion in 2010–11 and $19.4 billion in 2011–12. Revenue projections are lower than the 2009 Budget levels as a result of downward revisions to Ontario’s economic forecast and new information from the ongoing processing of past-year tax returns.
In response to the deeper economic downturn, the government has taken the necessary step of running larger deficits in the near term to deliver targeted and timely stimulus to shelter Ontario families from the worst of the economic storm. As a result, total expense over the medium term is projected to increase from $113.7 billion in 2009–10 to $118.2 billion in 2011–12. Investments in skills training, increased expenditures for social assistance, in addition to higher interest on debt expense, have led to increased spending since the 2009 Budget.
Over the medium term, total provincial revenues are projected to increase from $90.2 billion in 2009–10 to $100.0 billion in 2011–12. As economic conditions improve and the government implements its expenditure management plan, deficits are projected to decline.
As a result of the ongoing fragility that remains in the global economic environment — a vulnerable situation for Ontario with its open economy — the government’s medium-term projections will continue to include a reserve of $1.2 billion each year. This is meant to protect the fiscal outlook against further adverse changes in the Province’s revenue and expense, including those resulting from changes in Ontario’s economic performance.
Since the 2009 Budget, the fiscal projections for all G7 economies have deteriorated, resulting in higher deficit-to-GDP ratios across the board. Despite revisions to Ontario’s projections, the deficit in 2009–10 relative to the size of the economy, at 4.4 per cent, is still low compared with other industrialized jurisdictions impacted by the global economic crisis.
Furthermore, Ontario has the second-lowest 2009–10 expense per capita among all Canadian jurisdictions. This means Ontario is cost-efficient in delivering programs to the public. As the Province stood on the brink of recession, Ontario was in a strong fiscal position and was well prepared to provide much-needed stimulus, maintain key public services and position the Province to be competitive in future years through proposed tax cuts and the HST.
As the economy improves and the Province moves forward from the global economic crisis, the government remains committed to returning to balanced budgets. The government has already made significant headway in modernizing its operations and managing expenditure growth, and it is committed to doing much more.
ONTARIO’S EXPENDITURE MANAGEMENT PLAN
The government has already taken numerous steps to ensure Ontarians receive value-for-money and it is committed to implementing an even more aggressive expenditure management process to look at ways of improving further the delivery of key services for Ontarians in the future.
Ontario is not alone in its efforts to implement effective expenditure management practices. The new economic reality and inevitable demographic pressures associated with an aging population are forcing governments around the world to re-examine their expenditures and implement new approaches to manage spending.
In addition to its existing responsibilities for approving the Province’s annual expenditure plans, the Treasury Board/Management Board of Cabinet will conduct a rigorous strategic spending review focused on high-impact areas to ensure continued relevance and effectiveness of government programs and services and the way they are funded. This review will be guided by a policy framework that reflects the government’s values of fairness, targeting those who need it most, investing for the future, and value-for-money. The Board will make recommendations and provide continued support as these are considered and implemented by the government. The Board’s recommendations will be announced as a plan-of-action in the 2010 Budget.
As part of the government’s other expenditure management initiatives, the government will work with its broader public-sector partners and will also review all agencies, boards and commissions to make sure that their programs are designed to meet the priorities of Ontarians and yield measurable results in an efficient and effective way.
These initiatives will balance the government’s commitment to sustain Ontario’s public services while securing a strong and sustainable fiscal footing for Ontario.
SECTION C: DETAILS OF ONTARIO’S FINANCES
This section provides details on the Province’s current fiscal outlook, historical financial performance, and key fiscal indicators.
| Actual 2008–09 |
Projected Outlook | |||
|---|---|---|---|---|
| 2009–10 | 2010–11 | 2011–12 | ||
| Revenue | 90.5 | 90.2 | 99.3 | 100.0 |
| Expense | ||||
| Programs | 88.3 | 104.3 | 108.6 | 106.3 |
| Interest on Debt1 | 8.6 | 9.4 | 10.6 | 11.9 |
| Total Expense | 96.9 | 113.7 | 119.2 | 118.2 |
| Reserve | – | 1.2 | 1.2 | 1.2 |
| Surplus/(Deficit) | (6.4) | (24.7) | (21.1) | (19.4) |
| Net Debt2 | 153.3 | 184.1 | 212.7 | 238.4 |
| Accumulated Deficit2 | 113.2 | 138.0 | 159.1 | 178.5 |
- 1 Interest on debt expense is net of interest capitalized during construction of tangible capital assets of $0.1 billion in 2009–10, $0.3 billion in 2010–11, and $0.5 billion in 2011–12.
- 2 Net Debt is calculated as the difference between liabilities and financial assets. The annual change in Net Debt is equal to the surplus/deficit of the Province plus the change in tangible capital assets; the change in net assets of hospitals, school boards and colleges; and the change in the fair value of the Ontario Nuclear Funds. Accumulated Deficit is calculated as the difference between liabilities and total assets, including tangible capital assets and net assets of hospitals, school boards and colleges. The annual change in the Accumulated Deficit is equal to the surplus/deficit plus the change in the fair value of the Ontario Nuclear Funds.
- Note: Numbers may not add due to rounding.
| Ministry Expense | 2005–06 | 2006–07 | 2007–08 | Actual 2008–09 |
Current Outlook 2009–10 |
|---|---|---|---|---|---|
| Aboriginal Affairs1 | 50 | 25 | 33 | 55 | 71.1 |
| Agriculture, Food and Rural Affairs1 | 861 | 796 | 731 | 877 | 1,116.1 |
| Attorney General | 1,282 | 1,343 | 1,648 | 1,662 | 1,665.8 |
| Board of Internal Economy | 150 | 163 | 257 | 188 | 173.3 |
| Children and Youth Services | 3,284 | 3,277 | 3,733 | 4,056 | 4,406.5 |
| Citizenship and Immigration | 89 | 112 | 90 | 89 | 106.7 |
| Community and Social Services | 6,714 | 7,178 | 7,544 | 7,998 | 8,581.5 |
| Community Safety and Correctional Services | 1,728 | 1,856 | 1,982 | 2,142 | 2,260.0 |
| Consumer Services2,3 | 39 | 39 | 46 | 45 | 48.8 |
| Culture1 | 478 | 414 | 350 | 381 | 476.7 |
| Economic Development and Trade1,2 | 176 | 199 | 297 | 218 | 398.9 |
| Education1 | 440 | 423 | 446 | 443 | 492.9 |
| School Boards' Net Expense | 10,886 | 11,290 | 11,830 | 12,722 | 13,723.5 |
| Energy and Infrastructure1 | 325 | 525 | 401 | 263 | 764.7 |
| Environment1 | 274 | 314 | 349 | 365 | 367.2 |
| Executive Offices | 31 | 37 | 36 | 35 | 36.6 |
| Finance1 | 578 | 564 | 455 | 750 | 670.6 |
| Francophone Affairs, Office of | 4 | 4 | 5 | 5 | 5.3 |
| Government Services1 | 749 | 978 | 950 | 953 | 1,311.4 |
| Health and Long-Term Care1 | 17,797 | 19,119 | 20,373 | 21,780 | 23,576.2 |
| Hospitals' Net Expense | 14,816 | 16,145 | 17,381 | 18,585 | 19,293.6 |
| Health Promotion1 | 290 | 391 | 364 | 382 | 398.9 |
| Labour | 141 | 146 | 170 | 177 | 174.1 |
| Municipal Affairs and Housing1 | 926 | 843 | 744 | 756 | 703.9 |
| Natural Resources2 | 626 | 731 | 794 | 780 | 788.2 |
| Northern Development, Mines and Forestry2,4,5 | 332 | 314 | 341 | 491 | 378.4 |
| Research and Innovation1 | 332 | 316 | 301 | 295 | 482.7 |
| Revenue | 442 | 563 | 554 | 557 | 820.2 |
| Tourism | 210 | 204 | 234 | 185 | 216.4 |
| Training, Colleges and Universities1 | 3,509 | 4,115 | 4,384 | 4,581 | 5,126.4 |
| Colleges' Net Expense1 | 1,185 | 1,273 | 1,403 | 1,495 | 1,549.5 |
| Transportation1 | 1,795 | 1,787 | 1,892 | 2,044 | 2,112.6 |
| Interest on Debt6 | 9,019 | 8,831 | 8,914 | 8,566 | 9,406.0 |
| Other Expense1 | 4,369 | 3,813 | 7,490 | 2,960 | 13,141.1 |
| Year-End Savings7 | – | – | – | – | (1,150.0) |
| Total Expense | 83,927 | 88,128 | 96,522 | 96,881 | 113,695.9 |
- 1 Details on other ministry expense can be found in Table 11, Other Expense.
- 2 Future updates will reflect the impacts of previously announced ministry restructuring details.
- 3 Expense presented is that of the former Ministry of Small Business and Consumer Services.
- 4 Expense presented is that of the former Ministry of Northern Development and Mines.
- 5 2008–09 amount reflects an accounting adjustment of $112.1 million resulting from the reclassification of the Ontario Northland Transportation Commission from a Government Business Enterprise to a Government Organization.
- 6 Interest on debt is net of interest capitalized during construction of tangible capital assets of $78 million in 2009–10.
- 7 As in past years, the Year-End Savings provision reflects anticipated underspending that has historically arisen at year-end due to factors such as program efficiencies, and changes in project startups and implementation plans.
- Note: Numbers may not add due to rounding.
| Ministry Expense | 2005–06 | 2006–07 | 2007–08 | Actual 2008–09 |
Current Outlook 2009–10 |
|---|---|---|---|---|---|
| Aboriginal Affairs | |||||
| One-Time Expense for the First Nations Gaming Agreement | – | – | 201 | – | – |
| Agriculture, Food and Rural Affairs | |||||
| One-Time Extraordinary Assistance | 125 | 259 | 274 | – | – |
| Time-Limited Investments in Infrastructure | – | – | – | – | 1,055.8 |
| Time-Limited Assistance | 157 | 19 | 76 | 13 | 164.0 |
| Culture | |||||
| One-Time Investments | – | – | 57 | – | – |
| Economic Development and Trade | |||||
| One-Time Investments | – | – | 152 | – | – |
| Education | |||||
| Teachers' Pension Plan1 | 295 | 345 | 342 | 50 | 259.0 |
| Energy and Infrastructure | |||||
| Capital Contingency Fund | – | – | – | – | 200.0 |
| One-Time Investments in Municipal Infrastructure | – | 140 | 450 | – | – |
| Time-Limited Investments in Infrastructure | – | – | – | – | 676.5 |
| Environment | |||||
| One-Time Investments | – | – | – | 68 | – |
| Finance | |||||
| One-Time Automotive Sector Support | – | – | – | – | 4,000.0 |
| Investing in Ontario Act Investments | – | – | 1,149 | – | – |
| Ontario Municipal Partnership Fund | 714 | 758 | 907 | 905 | 782.9 |
| Operating Contingency Fund | – | – | – | – | 1,880.0 |
| Power Purchases | 803 | 863 | 929 | 953 | 964.1 |
| Government Services | |||||
| Pension and Other Employee Future Benefits | 729 | 557 | 531 | 971 | 932.0 |
| Health and Long-Term Care | |||||
| H1N1 Response One-Time Expense | – | – | – | – | 650.0 |
| Health Promotion | |||||
| Time-Limited Investments in Infrastructure | – | – | – | – | 192.6 |
| Municipal Affairs and Housing | |||||
| Time-Limited Investments in Municipal Social and Affordable Housing Stock | – | – | 100 | – | 585.3 |
| Research and Innovation | |||||
| One-Time Investments | – | – | 87 | – | 20.0 |
| Training, Colleges and Universities | |||||
| Time-Limited Investments – Training, Colleges and Universities | – | – | 699 | – | 695.2 |
| Time-Limited Investments – Colleges' Net Expense | – | – | – | – | 83.7 |
| Transportation | |||||
| One-Time Transit and Infrastructure Investments | 1,546 | 872 | 1,536 | – | – |
| Total Other Expense | 4,369 | 3,813 | 7,490 | 2,960 | 13,141.1 |
- 1 Numbers reflect PSAB pension expense. Ontario's matching contributions to the plan grow from $740 million in 2005–06 to $1,070 million in 2008–09 and $1,249 million in 2009–10.
- Note: Numbers may not add due to rounding.
| Sector | Total Infrastructure Expenditures 2008–09 Actual |
2009–10 Current Outlook | ||
|---|---|---|---|---|
| Investment in Capital Assets |
Transfers and Other Expenditures on Infrastructure1 |
Total Infrastructure Expenditures |
||
| Transportation | ||||
| Transit | 1,073.1 | 1,316.0 | 371.1 | 1,687.1 |
| Highway Construction | 1,444.4 | 1,718.3 | 0.0 | 1,718.3 |
| Windsor Gateway | 144.9 | 186.9 | 60.2 | 247.1 |
| Other Transportation2 | 350.0 | 524.5 | 51.5 | 576.0 |
| Health | ||||
| Hospitals | 2,264.3 | 2,542.8 | 0.0 | 2,542.8 |
| Other Health | 260.4 | 468.2 | 166.4 | 634.6 |
| Education | ||||
| School Boards | 1,372.9 | 1,473.6 | 30.0 | 1,503.6 |
| Colleges | 267.4 | 239.9 | 0.0 | 239.9 |
| Universities | 49.9 | 0.0 | 105.6 | 105.6 |
| Water/Environment | 288.0 | 37.1 | 236.6 | 273.8 |
| Municipal and Local Infrastructure3 | 279.2 | 19.5 | 459.0 | 478.5 |
| Justice | 383.3 | 318.6 | 37.1 | 355.6 |
| Other | 812.9 | 1,066.1 | 736.1 | 1,802.3 |
| New Short-Term Stimulus Investments4 | 0.0 | 702.0 | 2,728.6 | 3,430.6 |
| Total | 8,990.6 | 10,613.5 | 4,982.2 | 15,595.7 |
| Less: Other Partner Funding5 | 531.2 | 501.0 | 0.0 | 501.0 |
| Total Excluding Partner Funding | 8,459.4 | 10,112.5 | 4,982.2 | 15,094.7 |
| Less: Flow-Throughs6 | 221.1 | 613.3 | 1,776.7 | 2,390.0 |
| Total Provincial Expenditure7 | 8,238.3 | 9,499.2 | 3,205.5 | 12,704.7 |
- 1 Mainly consists of transfers for capital purposes to municipalities and universities, and expenditures for capital repairs. These expenditures are included in the Province's total expense in Table 10.
- 2 Other transportation includes planning activities, property acquisition, and other infrastructure programs (e.g., municipal/local roads/ remote airports).
- 3 Municipal and local water and wastewater infrastructure investments are included in the Water/Environment sector.
- 4 New Short-Term Stimulus Investments include the federal-provincial stimulus projects referenced in Chapter I.
- 5 Third-party contributions to capital investment in the consolidated sectors (schools, colleges and hospitals).
- 6 Mostly federal government transfers for capital investments.
- 7 Total provincial expenditure includes acquisitions of tangible capital assets by the Province and consolidated sectors (schools, colleges and hospitals). The Province's total expense includes amortization on tangible capital assets, rather than acquisitions.
- Note: Numbers may not add due to rounding.
| 2000–01 | 2001–02 | 2002–031 | 2003–04 | 2004–05 | 2005–062 | 2006–07 | 2007–08 | Actual 2008–09 |
Current Outlook 2009–101 |
|
|---|---|---|---|---|---|---|---|---|---|---|
| Financial Transactions | ||||||||||
| Revenue | 66,294 |
66,534 |
68,891 |
68,400 |
77,841 |
84,225 |
90,397 |
97,122 |
90,472 |
90,180 |
| Expense | ||||||||||
| Programs | 53,519 |
55,822 |
59,080 |
64,279 |
70,028 |
74,908 |
79,297 |
87,608 |
88,315 |
104,290 |
| Interest on Debt | 10,873 |
10,337 |
9,694 |
9,604 |
9,368 |
9,019 |
8,831 |
8,914 |
8,566 |
9,406 |
| Total Expense | 64,392 |
66,159 |
68,774 |
73,883 |
79,396 |
83,927 |
88,128 |
96,522 |
96,881 |
113,696 |
| Reserve | – |
– |
– |
– |
– |
– |
– |
– |
– |
1,200 |
| Surplus/(Deficit) | 1,902 |
375 |
117 |
(5,483) |
(1,555) |
298 |
2,269 |
600 |
(6,409) |
(24,716) |
| Net Debt3,4 | 132,496 |
132,121 |
132,647 |
138,816 |
140,921 |
141,928 |
141,100 |
142,418 |
153,325 |
184,110 |
| Accumulated Deficit5 | 132,496 |
132,121 |
118,705 |
124,188 |
125,743 |
109,155 |
106,776 |
105,617 |
113,238 |
137,954 |
| Gross Domestic Product (GDP) at Market Prices | 440,759 |
453,701 |
477,763 |
493,081 |
516,106 |
537,232 |
559,293 |
584,664 |
587,796 |
565,377 |
| Personal Income | 347,653 |
361,187 |
369,420 |
381,127 |
400,994 |
419,325 |
442,166 |
464,217 |
482,008 |
478,731 |
| Population — July (000s) | 11,683 |
11,897 |
12,091 |
12,242 |
12,391 |
12,528 |
12,665 |
12,795 |
12,936 |
13,069 |
| Net Debt per Capita (dollars) | 11,341 |
11,106 |
10,971 |
11,339 |
11,373 |
11,329 |
11,141 |
11,131 |
11,853 |
14,088 |
| Personal Income per Capita (dollars) | 29,756 |
30,360 |
30,553 |
31,132 |
32,363 |
33,471 |
34,912 |
36,281 |
37,261 |
36,631 |
| Total Expense as a per cent of GDP | 14.6 |
14.6 |
14.4 |
15.0 |
15.4 |
15.6 |
15.8 |
16.5 |
16.5 |
20.1 |
| Interest on Debt as a per cent of Revenue | 16.4 |
15.5 |
14.1 |
14.0 |
12.0 |
10.7 |
9.8 |
9.2 |
9.5 |
10.4 |
| Net Debt as a per cent of GDP | 30.1 |
29.1 |
27.8 |
28.2 |
27.3 |
26.4 |
25.2 |
24.4 |
26.1 |
32.6 |
| Accumulated Deficit as a per cent of GDP | 30.1 |
29.1 |
24.8 |
25.2 |
24.4 |
20.3 |
19.1 |
18.1 |
19.3 |
24.4 |
- 1 Starting in 2002–03, investments in major tangible capital assets owned by the Province (land, buildings, and transportation infrastructure) have been capitalized and amortized to expense over their useful lives. Starting in 2009–10, investments in minor tangible capital assets owned by the Province (information technology infrastructure and systems, vehicles and marine fleet and aircraft) will also be capitalized and amortized to expense. All capital assets owned by consolidated organizations are being accounted for in a similar manner.
- 2 Starting in 2005–06, the Province's financial reporting was expanded to include hospitals, school boards and colleges using one-line consolidation. Total expense prior to 2005–06 has not been restated to reflect expanded reporting.
- 3 Net Debt is calculated as the difference between liabilities and financial assets. The annual change in Net Debt is equal to the surplus/deficit of the Province plus the change in tangible capital assets; the change in net assets of hospitals, school boards and colleges; and, effective April 1, 2007, the change in the fair value of the Ontario Nuclear Funds.
- 4 Net Debt is restated in 2003–04, 2004–05 and 2005–06 to reflect the value of hydro corridor lands transferred to the Province from Hydro One Inc.
- 5 Accumulated Deficit is calculated as the difference between liabilities and total assets, including tangible capital assets and net assets of hospitals, school boards and colleges. The annual change in the Accumulated Deficit is equal to the surplus/deficit plus, effective April 1, 2007, the change in the fair value of the Ontario Nuclear Funds. For fiscal 2005–06, the change in the Accumulated Deficit includes the opening combined net assets of hospitals, school boards and colleges that were recognized upon consolidation of these Broader Public Sector entities. For fiscal 2006–07, the change in the Accumulated Deficit includes an adjustment to the unfunded liability of the Ontario Electricity Financial Corporation made at the beginning of the year. For fiscal 2007–08, a $1.2 billion decrease in the Accumulated Deficit is made up of $0.6 billion in the Province's operating surplus, with the remainder resulting from a change in accounting policy. Under this change, Ontario Nuclear Funds Agreement funds are reported at fair value on Ontario Power Generation Inc. books and, upon consolidation, on the Province's consolidated financial statements.
- Sources: Ontario Ministry of Finance and Statistics Canada.
