2010 Ontario Economic Outlook and Fiscal Review

CHAPTER 3: Fiscal Outlook

Highlights

• 2010–11 deficit projection — $18.7 billion, down from the $19.7 billion forecast in the 2010 Budget.
• 2010–11 deficit projection represents an almost 25 per cent improvement from the $24.7 billion deficit forecast a year ago for 2009–10.
• Province on track for deficit targets in 2011–12 and 2012–13.
• The government has laid out a realistic, responsible plan to cut the deficit in half within five years of its highest point and to eliminate it in eight years.
• Ontario needs a strong federal partner that will provide long-term, predictable support.

Section A: Overview

This chapter outlines Ontario's fiscal outlook for 2010–11 and the medium-term forecast for 2011–12 and 2012–13. In addition, it reviews federal support for the delivery of services important to Ontarians.

While the economy is gradually recovering, Ontario's families and businesses are still feeling the effects of the global financial and economic crisis. Key economic indicators have improved from lows posted during the recession, but most remain below pre-recession levels. Risks to the outlook include uncertainty regarding the U.S. economic recovery and the ongoing challenges in the global economy, such as sovereign debt concerns and trade imbalances (for further details, see Chapter 2: Ontario's Economic Outlook).

The government has already announced that it has exceeded its fiscal target for 2009–10, recording a deficit of $19.3 billion, down from the $24.7 billion deficit projected in the Fall 2009 Ontario Economic Outlook and Fiscal Review.

The Province is now projecting an $18.7 billion deficit in 2010–11 — a $1.0 billion improvement from the 2010 Budget and an almost 25 per cent improvement from the $24.7 billion deficit forecast a year ago for 2009–10.

The government is on track to meet the medium-term fiscal targets outlined in the 2010 Budget. These include steadily declining deficits of $17.3 billion in 2011–12 and $15.9 billion in 2012–13, and incorporate the initiatives announced as part of this document, including the proposed Ontario Clean Energy Benefit. The government has laid out a realistic, responsible plan to cut the deficit in half within five years of its highest point and to eliminate it in eight years.

Section B: 2010–11 Fiscal Performance

The 2010 Budget and the First Quarter Ontario Finances projected a deficit of $19.7 billion for 2010–11. The government is now projecting a deficit of $18.7 billion for 2010–11 — a $1.0 billion improvement.

The improvement to the fiscal forecast for 2010–11 is mainly due to an increase in revenue resulting from stronger economic growth and the government's prudent fiscal management. Total program expense is unchanged from the 2010 Budget plan.

Total revenue has increased by 0.7 per cent while total expense has decreased by 0.2 per cent. Total expense is lower due to the fact that the Province's interest on debt expense projection is $0.2 billion below the 2010 Budget forecast.

The fiscal plan continues to maintain a $0.7 billion reserve in recognition of the global economic uncertainty that remains.

Table 1
2010–11 In-Year Fiscal Performance
($ Millions)

	Budget Plan	Current Outlook	In-Year Change
Revenue	106,867	107,656	789
Expense
Programs	115,896	115,896	–
Interest on Debt	9,961	9,715	(246)
Total Expense	125,857	125,611	(246)
Reserve	700	700	–
Surplus/(Deficit)	(19,690)	(18,656)	1,035

• Note: Numbers may not add due to rounding.

2010–11 REVENUE CHANGES SINCE THE 2010 BUDGET

The 2010–11 revenue outlook, at $107.7 billion, is $0.8 billion above the 2010 Budget forecast, largely reflecting stronger economic growth in 2010.

Table 2
Summary of Revenue Changes since the Budget
($ Millions)

		2010/11
Taxation
Personal Income Tax	(1,130)
Sales Tax	326
Corporations Tax	696
Education Property Tax	382
Tobacco Tax	166
Ontario Health Premium	151
Land Transfer Tax	126
Other Taxes	165
Total Taxation		882
Government of Canada		76
Other Non-Tax Revenue		(169)
Total Revenue Changes since Budget		789

• Note: Numbers may not add due to rounding.

DETAILS OF 2010–11 IN-YEAR REVENUE CHANGES

Key revenue changes since the 2010 Budget forecast include:

• Personal Income Tax (PIT) revenues are projected to be $1,130 million, or 4.4 per cent, lower due to weaker 2009 revenues indicated by tax returns processed since the 2010 Budget. Stronger 2010 employment and wage growth only partially offsets the weaker 2009 amounts.
• Sales Tax revenues are forecast to be $326 million, or 1.7 per cent, higher largely due to stronger projected growth in consumer spending during 2010. This stronger growth is partially offset by a revenue-neutral change in the reporting of the energy component of the proposed Ontario Energy and Property Tax Credit (OEPTC), whereby in 2010–11 the credit would be netted against Sales Tax rather than Education Property Tax (EPT) as assumed at the time of the Budget. This would result in an offsetting increase in EPT. (For further information on this tax credit, see Chapter 5: Tax and Pension Modernization.)
• Corporations Tax (CT) revenues are projected to be $696 million, or 9.4 per cent, higher mainly due to stronger 2009 revenues indicated by tax returns processed since the Budget. Weaker 2010 profit growth only partially offsets the stronger 2009 amounts.
• Education Property Tax (EPT) is up $382 million, largely due to the tax credit reporting change noted above. This is partially offset by a revised estimate of the remaining property tax credit to be netted against EPT.
• Tobacco Tax revenues are projected to be $166 million higher due to improved enforcement activities.
• Ontario Health Premium revenues are expected to be $151 million, or 5.3 per cent, higher largely due to stronger 2009 revenues and faster 2010 employment and wage growth.
• Land Transfer Tax revenues are projected to be $126 million, or 12.3 per cent, higher reflecting the strength in the Ontario housing market earlier in the year.
• Other Taxes are forecast to be a combined $165 million higher, largely due to stronger 2010 economic growth. This includes an increase in the revenue outlook for Fuel Tax ($81 million) and Employer Health Tax ($46 million).
• The $76 million increase in Government of Canada transfers is due to tobacco settlement claims that were previously announced in the First Quarter Ontario Finances.
• Other Non-Tax Revenue is down $169 million due to updated information based on the current forecast.

2010–11 EXPENSE CHANGES SINCE THE 2010 BUDGET

Consistent with the government's approach to controlling the rate of growth in spending while protecting core public services, total program expense is unchanged from the 2010 Budget plan. Total expense in 2010–11 is currently projected to be $125,611 million — 0.2 per cent lower than the 2010 Budget forecast, due to a lower interest on debt expense projection than forecast in the 2010 Budget, reflecting lower interest rates than those projected in the Budget.

Table 3
Summary of Expense Changes since the Budget
($ Millions)

	2010/11
Key Program Expense Changes
Ontario Clean Energy Benefit	300
Home Energy Savings Program	85.1
Extra Forest Firefighting	57.1
Other Program Expenses	8.3
Contingency Funds	(450.5)
Total Program Expense Changes	–
Interest on Debt Expense Forecast Change	(246.2)
Total Expense Changes since the Budget	(246.2)

DETAILS OF 2010–11 IN-YEAR EXPENSE CHANGES

Key 2010–11 expense changes from the 2010 Budget forecast include:

• An increase of $300.0 million to provide direct relief to eligible consumers through the proposed Ontario Clean Energy Benefit, providing a credit equal to 10 per cent of the after-tax cost of electricity on their bills, effective January 1, 2011. Eligible consumers include residential, farm, small business and other small users who consume less than 250,000 kilowatt hours per year.
• An $85.1 million increase to address increased demand in the Home Energy Savings Program and the Ontario Solar Thermal Heating Initiative.
• An increase of $57.1 million for extra forest firefighting, to provide additional resources during the 2010 fire season, which began earlier than usual this year.
• An increase in all other program expenses of $8.3 million, including items such as disaster relief support for tornado damage in Essex County and monsoon flooding in Pakistan.

Interest on Debt expense, at $9,715 million, is $246.2 million lower than forecast in the 2010 Budget. This reduction primarily reflects lower interest rates than those projected at the time of the Budget.

Section C: 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 measures.

Table 4
Summary of Medium-Term Revenue Outlook
($ Billions)

	Actual	Projected Outlook
Revenue	2009–10	2010–11	2011–12	2012–13
Taxation Revenue	64.9	72.5	75.2	79.2
Government of Canada	18.6	23.8	21.1	21.1
Income from Government Business Enterprises	4.2	4.2	4.4	4.6
Other Non-Tax Revenue	8.0	7.2	6.9	6.9
Total Revenue	95.8	107.7	107.6	111.8

• Note: Numbers may not add due to rounding.

The medium-term Taxation Revenue outlook reflects current revenue information and projections for the Ontario economy.

The outlook for Government of Canada transfers reflects current federal-provincial funding arrangements.

The outlook for Income from Government Business Enterprises is unchanged from the 2010 Budget.

The forecast for Other Non-Tax Revenue is based on information provided by government ministries and provincial agencies.

MEDIUM-TERM REVENUE CHANGES SINCE THE 2010 BUDGET

Table 5
Summary of Medium-Term Revenue Changes since the Budget
($ Billions)

Source of Change	2010–11	2011–12	2012–13
Economic Growth Outlook	1.5	1	0.6
Lower 2009–10 Tax Base	(0.7)	(0.7)	(0.7)
Government of Canada	0.1	(0.4)	–
Other Non-Tax Revenue	(0.2)	(0.1)	(0.1)
Total Revenue Changes	0.8	(0.2)	(0.1)

• Note: Numbers may not add due to rounding.

The revenue outlook is up in 2010–11 due to stronger economic growth in 2010. The outlook for 2011–12 and 2012–13 remains close to the 2010 Budget outlook.

A stronger 2010 economic growth outlook increases taxation revenues in 2010–11. This increase diminishes over the 2011–12 and 2012–13 period due to weaker economic growth projected for those years.

A lower 2009–10 tax base is largely due to weaker Personal Income Tax revenues reported in the 2009–10 Public Accounts. This lowers the revenue base upon which projected growth is applied, resulting in lower revenues over the forecast period.

Changes to Government of Canada transfers in 2011–12 reflect updated estimates based on current agreements and funding arrangements with the federal government.

Other Non-Tax Revenue changes largely reflect updated information based on the current forecast.

MEDIUM-TERM EXPENSE OUTLOOK

A key element of the 2010 Budget plan to eliminate the deficit was a commitment to manage down expense while following through on policies that support jobs and growth to ensure future opportunity and prosperity. The government is committed to maintaining a prudent and responsible approach to managing growth in expense, while preserving public services.

The medium-term expense outlook is consistent with the 2010 Budget plan, and reflects the impact of the following adjustments:

• providing direct relief to eligible consumers through the proposed Ontario Clean Energy Benefit;
• a lower interest on debt forecast, as a result of lower interest rates than those projected in the Budget; and
• the measures the government is taking to manage spending and reduce costs.

The government remains committed to ongoing expenditure management and has a long track record of effectively realizing savings and efficiencies (for further details, see Chapter 1, Section B: Managing Responsibly). As outlined in the 2010 Budget, the government has continued its comprehensive review of all government programs and services. To date, this review has identified over $260 million in potential savings through both programming and administrative expenditure reductions. The government will continue to identify program efficiencies to ensure the rate of expense growth remains well below the rate of growth in revenue over the medium term.

MEDIUM-TERM FISCAL OUTLOOK

The Province is on track to meet the fiscal targets established in the 2010 Budget. Ontario's fiscal outlook includes steadily declining deficits of $18.7 billion in 2010–11, $17.3 billion in 2011–12 and $15.9 billion in 2012–13.

In recognition of the ongoing challenges in the global economy, such as sovereign debt concerns and trade imbalances, as well as the uncertain outlook for the U.S. economic recovery, the medium-term fiscal outlook continues to include a reserve of $1.0 billion in each of 2011–12 and 2012–13.

Table 6
Medium-Term Fiscal Plan and Outlook
($ Billions)

	Actual	Projected Outlook
	2009–10	2010–11	2011–12	2012–13
Total Revenue	95.8	107.7	107.6	111.8
Expense
Programs	106.3	115.9	113.1	114.5
Interest on Debt	8.7	9.7	10.8	12.2
Total Expense	115.1	125.6	123.9	126.7
Reserve	–	0.7	1.0	1.0
Surplus/(Deficit)	(19.3)	(18.7)	(17.3)	(15.9)

• Note: Numbers may not add due to rounding.

RISKS TO THE FISCAL OUTLOOK

Although economic recovery is underway in Ontario, significant risks remain that could cause variances to both the Province's revenue and expense outlooks.

Detailed information on revenue and expense risks and sensitivities can be found in Chapter II of the 2010 Budget.

Section D: Federal Partner

Through the recent global recession, Ontario and the federal government worked closely together to support the economy. Both levels of government coordinated investment in infrastructure, provided financial support to the auto industry and worked together on sales tax harmonization. The federal government also provided additional support for skills training.

The Province's Open Ontario plan will help Ontarians increase productivity and promote economic growth. The plan includes new investments in education and continuing investments in labour-market training and health care. During a time of continued economic uncertainty, the Province seeks the federal government's ongoing support in strengthening Ontario and Canada.

Ontario has been asking for fairness in all transfers and this should include programs and supports in the areas of immigration and labour-market training.

A NEED FOR IMMIGRANT SETTLEMENT AND SKILLS TRAINING SUPPORT

The Province looks to the federal government to provide adequate settlement and training support for new Canadians in Ontario. To date, the federal government has underspent its commitments through the Canada-Ontario Immigration Agreement by more than $200 million. The federal government must fulfill this commitment and flow this money to immigrant service agencies immediately. This is particularly important considering immigrants will account for a significant and rising share of labour-force growth in the coming years. Ontario is committed to supporting the success of its immigrants. To improve outcomes for immigrants who choose Ontario as their home, the federal government must immediately begin negotiations on a new agreement with Ontario — one that would give the Province greater policy control and full funding support for immigrant settlement and training.

In its 2009 budget, the federal government increased funding for labour-market programs through time-limited enhancements that provided much-needed assistance to workers affected by the recession. These enhancements, which will expire on March 31, 2011, provided additional support of approximately $314 million per year in 2009–10 and 2010–11. Ending this funding means that tens of thousands of Ontarians will lose the opportunity to develop labour-market skills that are crucial in the current economic climate. Ontario is asking the federal government to extend the labour-market training enhancements to provide Ontarians with greater opportunities to transition their skills to the new economy.

A NEED FOR RELIABLE LONG-TERM FUNDING SUPPORT

The federal government has used time-limited funding to support the delivery of provincial services. When federal support for provincial programs such as health care declines over time or ends, it leaves Ontario with significant financial pressures to continue delivering these much-needed services. Time-limited federal funding reflects a lack of commitment to the needs of Ontario families. This approach hurts the province's prospects for a stronger Ontario and a stronger Canada.

Provincial governments are working together to manage the cost of health care services, including work on the pan-Canadian procurement of drugs and medical equipment, and sharing of clinical best practices. To continue to deliver the quality services on which Ontarians rely, Ontario needs the federal government to renew its commitment to fund the reduction of health care wait times.

Provinces need a strong and sustained federal commitment beyond 2013–14 to help them plan to meet future demand for health care, postsecondary education and social services. The growth of major federal transfers in support of health, postsecondary education and social programs is currently set in federal legislation until the end of 2013–14. Ontario is encouraged that the federal fiscal plan provides for growth in major federal transfers at current legislated rates for an additional two years to 2015–16. The future of universal health care depends on the federal government providing adequate financial support to provinces and territories.

AN ONGOING PARTNERSHIP

The federal government and interested provinces and territories are working together to establish a Canadian Securities Regulator. In order to meet the needs of Canadian capital markets, the national regulator should be centred in Toronto, Canada's financial capital.

Ontario wants a federal partner that supports the initiatives the Province is implementing in response to new and emerging economic, demographic and social realities that will help with its long-term economic transformation. Ontario looks to the federal government for continued support to be a true partner in the areas of health care and postsecondary education, and to work with Ontario to support its immigrants as well as its economic plan going forward.

Section E: Details of Ontario's Finances

This section provides information on the Province's current fiscal outlook, historical financial performance and key fiscal indicators.

Table 7
Medium-Term Fiscal Plan and Outlook
($ Billions)

	Actual	Projected Outlook
	2009–10	2010–11	2011–12	2012–13
Revenue	95.8	107.7	107.6	111.8
Expense
Programs	106.3	115.9	113.1	114.5
Interest on Debt 1	8.7	9.7	10.8	12.2
Total Expense	115.1	125.6	123.9	126.7
Reserve	–	0.7	1.0	1.0
Surplus/(Deficit)	(19.3)	(18.7)	(17.3)	(15.9)
Net Debt 2	193.6	219.5	244.5	267.4
Accumulated Deficit 2	131.0	149.6	166.9	182.8

• ¹Interest on Debt expense is net of interest capitalized during construction of tangible capital assets of $0.1 billion in 2009–10, $0.2 billion in 2010–11, $0.2 billion in 2011–12 and $0.2 billion in 2012–13.
• ²Net 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 non-financial assets; and the change in the fair value of the Ontario Nuclear Funds. Accumulated Deficit is calculated as the difference between liabilities and total assets. 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.

Table 8
Revenue
($ Millions)

	2007–08	2008–09	Actual 2009–10	Current Outlook 2010–11
Taxation Revenue
Personal Income Tax	25,472	25,738	23,393	24,812
Sales Tax 1	16,745	17,021	17,059	19,463
Corporations Tax	12,990	6,748	5,615	8,086
Education Property Tax	5,754	5,696	5,626	5,698
Employer Health Tax	4,605	4,617	4,545	4,747
Ontario Health Premium	2,713	2,776	2,763	3,022
Gasoline Tax	2,360	2,323	2,336	2,378
Land Transfer Tax	1,363	1,013	1,015	1,149
Tobacco Tax	1,127	1,044	1,083	1,132
Fuel Tax	733	698	658	733
Beer and Wine Tax (replacing Fees)2	–	–	–	414
Electricity Payments-In-Lieu of Taxes	546	830	516	481
Other Taxes	481	352	322	368
	74,889	68,856	64,931	72,483
Government of Canada
Canada Health Transfer	8,487	8,942	9,791	10,217
Canada Social Transfer	3,778	4,079	4,204	4,327
Equalization	–	–	347	972
Infrastructure Programs	207	151	990	2,146
Labour Market Programs	664	797	1,253	1,207
Social Housing	525	520	498	487
Wait Times Reduction Fund	468	235	97	97
Other Federal Payments	2,468	1,867	1,440	4,306
	16,597	16,591	18,620	23,759
Government Business Enterprises
Ontario Lottery and Gaming Corporation	1,857	1,921	1,924	1,859
Liquor Control Board of Ontario	1,374	1,410	1,440	1,465
Ontario Power Generation Inc./Hydro One Inc.	1,214	713	854	844
Other Government Enterprises	(8)	(2)	(23)	(4)
	4,437	4,042	4,195	4,164
Other Non-Tax Revenue
Reimbursements	1,464	1,379	1,429	1,095
Vehicle and Driver Registration Fees	1,051	1,034	1,057	1,059
Electricity Debt Retirement Charge	982	970	907	916
Power Supply Contract Recoveries	929	953	1,409	1,385
Sales and Rentals	553	733	647	673
Other Fees and Licences	677	683	717	736
Beer and Wine Fees (replaced by Tax)2	466	459	451	115
Net Reduction of Power Purchase Contract Liability	398	373	348	339
Royalties	193	205	228	195
Miscellaneous Other Non-Tax Revenue	943	655	854	737
	7,656	7,444	8,047	7,250
Total Revenue	103,579	96,933	95,793	107,656

• ¹Sales Tax in 2010–11 includes Retail Sales Tax and Harmonized Sales Tax. Effective July 1, 2010, the Retail Sales Tax was replaced with a value-added tax and combined with the federal Goods and Services Tax to create a federally administered Harmonized Sales Tax.
• ²Beer and Wine Tax replaces reduced Beer and Wine Fees (-$343 million) and the reduced sales tax on alcohol (-$71 million). There is no net new revenue for the Province.

Table 9
Total Expense
($ Millions)

Ministry Expense	2007–08	2008–09	Actual 2009–10	Current Outlook 2010–11
				Aboriginal Affairs 1	33	55	67	71.0
Agriculture, Food and Rural Affairs 1	731	877	1,265	1,288.1
Attorney General	1,650	1,669	1,584	1,709.8
Board of Internal Economy	257	188	187	195.0
Children and Youth Services	3,733	4,069	4,430	4,666.5
Citizenship and Immigration	90	89	101	112.4
Community and Social Services	7,549	8,001	8,629	9,263.2
Community Safety and Correctional Services	1,982	2,121	2,201	2,690.6
Consumer Services	54	58	57	60.0
Economic Development and Trade 1	328	245	223	349.8
Education1	18,733	19,626	20,337	21,364.6
Energy and Infrastructure 1, 2	389	251	292	723.6
Environment 1	347	363	360	383.0
Executive Offices	36	35	34	34.9
Finance 1	380	602	491	651.7
Francophone Affairs, Office of	5	5	5	5.1
Government Services 1	916	939	1,106	1,102.4
Health and Long-Term Care	37,744	40,352	42,730	45,352.4
Health Promotion and Sport 1	364	382	381	408.7
Labour	170	177	179	192.2
Municipal Affairs and Housing 1	744	756	694	686.4
Natural Resources	629	621	639	666.2
Northern Development, Mines and Forestry	506	645	653	857.3
Research and Innovation 1	301	295	333	411.5
Revenue 1	641	635	1,129	1,008.1
Tourism and Culture 1	584	566	668	720.0
Training, Colleges and Universities 1	5,787	6,081	6,479	7,154.9
Transportation 1	1,892	2,038	2,097	2,294.6
Interest on Debt 3	8,914	8,566	8,719	9,715.0
Other Expense 1	7,490	3,035	8,985	12,646.5
Year-End Savings 4	–	–	–	(1,174.5)
Total Expense	102,979	103,342	115,055	125,611.1

• ¹Details on other ministry expense can be found in Table 10, Other Expense.
• ²Future updates will reflect the impact of previously announced ministry restructuring details
• ³Interest on debt is net of interest capitalized during construction of tangible capital assets of $148 million in 2009–10 and $212 million in 2010–11.
• ⁴As 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.

Table 10
Other Expense
($ Millions)

Ministry Expense	2007–08	2008–09	Actual 2009–10	Current Outlook 2010–11
Aboriginal Affairs
One-Time Expense for the First Nations Gaming Agreement	201	–	–	–
Agriculture, Food and Rural Affairs
One-Time Extraordinary Assistance	274	–	–	–
Time-Limited Investments in Infrastructure	–	–	618	1,898.00
Time-Limited Assistance	76	13	27	9.0
Economic Development and Trade
One-Time Investments	152	–	–	–
Education
Teachers' Pension Plan 1	342	50	255	525.0
Energy and Infrastructure
Capital Contingency Fund	–	–	–	200.0
One-Time Investments in Municipal Infrastructure	450	–	–	–
Ontario Clean Energy Benefit	–	–	–	300.0
Environment
One-Time Investments	–	68	37	–
Finance
One-Time Automotive Sector Support 2	–	75	3,022	–
Investing in Ontario Act Investments	1,149	–	–	–
Ontario Municipal Partnership Fund	907	905	781	645.5
Operating Contingency Fund	–	–	–	1,389.9
Pension Benefit Guarantee Fund	–	–	500	–
Power Supply Contract Costs	929	953	1,409	1,385.0
Government Services
Pension and Other Employee Future Benefits	531	971	949	1,102.0
Health Promotion and Sport
Time-Limited Investments in Infrastructure	–	–	48	345.1
Municipal Affairs and Housing
Time-Limited Investments in Municipal Social and Affordable Housing Stock	100	–	585	659.3
One-Time Assistance	–	–	–	1.0
Research and Innovation
One-Time Investments	87	–	5	–
Revenue
Harmonized Sales Tax Transitional Support	–	–	–	3,200.0
Tourism and Culture
One-Time Investments	57	–	–	29.0
Training, Colleges and Universities
Time-Limited Investments	699	–	559	957.7
Transportation
One-Time Transit and Infrastructure Investments	1,536	–	190	–
Total Other Expense	7,490	3,035	8,985	12,646.50

• ¹Numbers reflect PSAB pension expense. Ontario's matching contributions to the plan grow from $808 million in 2007–08 to $1,245 million in 2009–10 and $1,307 million in 2010–11.
• ²Reflects the fiscal impact of Ontario's $4.6 billion in support to the automotive industry.
• Note: Numbers may not add due to rounding

Table 11
2010–11 Infrastructure Expenditures
($ Millions)

Sector	Total Infrastructure Expenditures 2009–10 Actual	2010–11 Current Outlook
		Investment in Capital Assets	Transfers and Other Infrastructure Expenditures 1	Total Infrastructure Expenditures
Transportation
Transit	1,724	1,381	355	1,735
Highway Expansion/High-Occupancy Vehicle Lanes	1,020	1,018	–	1,018
Highway and Bridge Rehabilitation	771	1,017	–	1,017
Other Transportation 2	720	1,022	117	1,139
Health
Hospitals	2,541	2,065	10	2,075
Other Health	318	311	143	454
Education–School Boards	1,632	1,657	–	1,657
Postsecondary
Colleges	285	146	–	146
Universities	83	–	98	98
Water/Environment	500	41	306	348
Municipal and Local Infrastructure	448	34	493	527
Justice	220	641	29	670
Other	702	697	384	1,082
Short-Term Stimulus Investments	1,616	697	3,679	4,376
Subtotal	12,582	10,728	5,614	16,342
Less: Other Partner Funding 3	620	464	–	464
Total Excluding Partner Funding	11,961	10,264	5,614	15,878
Less: Flow-Throughs 4	1,133	487	2,179	2,666
Total Provincial Expenditure 5	10,829	9,776	3,435	13,212

• ¹Mainly 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 9.
• ²Other Transportation includes planning activities, property acquisition, highway service centres and other infrastructure programs (e.g., municipal/local roads, remote airports).
• ³Third-party contributions to capital investment in the consolidated sectors (schools, colleges and hospitals).
• ⁴Mostly federal government transfers for capital investments.
• ⁵Total Provincial Infrastructure Expenditure includes acquisitions of tangible capital assets by the Province and consolidated sectors (schools, colleges and hospitals). The share of 2009–10 Total Provincial Expenditure attributable to Investment in Capital Assets is $8.3 billion.
• Note: Numbers may not add due to rounding.

Table 12
Ten-Year Review of Selected Financial and Economic Statistics ¹
($ Millions)

	2001–02	2002–032	2003–04	2004–05	2005–06 3	2006–07	2007–08	2008–09	Actual 2009–10 2	Current Outlook 2010–11
Financial Transactions
Revenue	72,307	74,675	74,269	83,861	90,305	96,640	103,579	96,933	95,793	107,656
Expense
Programs	61,595	64,864	70,148	76,048	80,988	85,540	94,065	94,776	106,336	115,896
Interest on Debt 4	10,337	9,694	9,604	9,368	9,019	8,831	8,914	8,566	8,719	9,715
Total Expense	71,932	74,558	79,752	85,416	90,007	94,371	102,979	103,342	115,055	125,611
Reserve	–	–	–	–	–	–	–	–	–	700
Surplus/(Deficit)	375	117	(5,483)	(1,555)	298	2,269	600	(6,409)	(19,262)	(18,656)
Net Debt 5 6	132,121	132,647	138,816	140,921	152,702	153,742	156,616	169,585	193,589	219,462
Accumulated Deficit 7	132,121	118,705	124,188	125,743	109,155	106,776	105,617	113,238	130,957	149,613
Gross Domestic Product (GDP) at Market Prices	453,701	477,763	493,081	516,106	537,383	560,576	583,946	584,460	578,183	610,561
Personal Income	361,187	369,420	381,127	400,994	419,457	442,736	466,051	478,696	477,641	493,881
Population — July (000s)	11,897	12,091	12,242	12,391	12,528	12,665	12,793	12,932	13,065	13,211
Net Debt per Capita (dollars)	11,106	10,971	11,339	11,373	12,188	12,139	12,242	13,113	14,817	16,612
Personal Income per Capita (dollars)	30,360	30,553	31,132	32,363	33,480	34,956	36,430	37,016	36,559	37,385
Interest on Debt as a per cent of Revenue	14.3	13.0	12.9	11.2	10.0	9.1	8.6	8.8	9.1	9.0
Net Debt as a per cent of GDP	29.1	27.8	28.2	27.3	28.4	27.4	26.8	29.0	33.5	35.9
Accumulated Deficit as a per cent of GDP	29.1	24.8	25.2	24.4	20.3	19.0	18.1	19.4	22.6	24.5

• ¹Revenue and expense have been restated to reflect a fiscally neutral accounting change for the revised presentation of education property taxes, as described in the 2010 Ontario Budget.
• ²Starting 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 were capitalized and amortized to expense. All capital assets owned by consolidated organizations are being accounted for in a similar manner.
• ³Starting in 2005–06, the Province's financial reporting was expanded to include hospitals, school boards and colleges. Total expense prior to 2005–06 has not been restated to reflect expanded reporting.
• ⁴Interest on Debt is net of interest capitalized during construction of tangible capital assets of $148 million in 2009–10 and $212 million in 2010–11.
• ⁵Net 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 non-financial assets and, effective April 1, 2007, the change in the fair value of the Ontario Nuclear Funds.
• ⁶Starting in 2009–10, Net Debt includes the net debt of hospitals, school boards and colleges consistent with Public Sector Accounting Board standards. For comparative purposes, Net Debt has been restated from 2005–06 to 2008–09 to conform with this revised presentation. Net Debt has also been 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.
• ⁷Accumulated Deficit is calculated as the difference between liabilities and total assets. 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 further information, visit http://www.fin.gov.on.ca/en/budget/paccts/2010.
• Sources: Ontario Ministry of Finance and Statistics Canada.